Confusing time ahead for the economy

It’s good for Sweden that the Sweden Democrats did not become even bigger. This opinion is shared by Pär Nuder, the former Minister for Finance (Social Democrats), and Anna Kinberg Batra, former leader of the Moderate Party.

“The weeks or months ahead will be a confusing time for the economy after this election,” said Pär Nuder the morning after the election at a meeting arranged by IVA’s Business Executives Council.

He thinks that the election results will mean unpredictability in terms of policies in the immediate future – not only at the national level, but also in many municipalities and counties.

“It’s good for Sweden that the Sweden Democrats didn’t get even bigger, but a lot of people voted for them so the other parties need to eat some humble pie.”

He also sees the Sweden Democrats’ success as a failure on the part of both the Social Democrats and the Moderate Party.

Nuder pointed out that deadlocked block politics is not all bad and that the election results may very well force the parties to find party-neutral solutions in order to ensure a functioning government.

“Block politics has become a mantra that people are hanging onto to the point of absurdity. But the extreme parties at both ends of the spectrum will not increase their influence. The question of who will govern Sweden will be solved by a concerted effort in the centre,” he said.

Nuder thinks that Stefan Löfven will stay on as Prime Minister, at least until it it time to vote on the issue in the Riksdag (parliament).

“There are many options for government. The test for a new government will come when it’s time to vote on the next budget. Which constellation of parties will manage to move their budget through parliament?”

He has a more positive view of other agreements across party lines. A tax reform with broad support during the upcoming term is fairly likely.

Anna Kinberg Batra shared Pär Nuder’s view that it was a good thing the Sweden Democrats did not get more votes.

“But if Stefan Löfven stays on as Prime Minister he will be defeated and Ulf Kristersson will take over,” she said.

She pointed out that the past term, which is soon over, was turbulent.

“Many parties have switched their leaders and Brexit, Trump, #metoo and immigration have shaken politics and society. It’s surprising after all this that we have two blocks of equal size.”

There was too much focus on the Sweden Democrats during the election process and too little emphasis on Sweden’s future.

“The election should have been about how Sweden can be more competitive. But economic policy was not discussed. It was all about the Sweden Democrats.”

Kinberg Batra pointed out that right-wing populism is an international phenomenon and now it has reached Sweden, making it difficult to form a government.

“I had to resign because I said we need to talk to everyone. SD shouldn’t get the role as martyr.”

Kinberg Batra thinks the economy is facing enormous challenges.

“Sweden is a small country and we rely on our foreign trade. Right now the economy is strong and the Government has stepped on the accelerator. Household debt has increased. But stronger policies are needed.”

She stressed the need for reforms to encourage, among other things, effective construction.

“If the pressure on the parties is strong there will be reforms,” she said.