Response to interpellation 2024/25:402 on bankruptcies
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
1 M argues that the government is actively working to boost the economy through an expansive budget, lowered taxes, and investments in infrastructure and research 1 2 3. M believes that Sweden stands on a stable foundation with good public finances and that priority has been given to bringing down inflation 1 2 3. M considers the policy to be good because it benefits education and extra work 4. M argues that the fiscal policy is doing what needs to be done and that Sweden is well-equipped despite uncertainties 4. 5 S argues that the government is passive and that the policy is not working since Sweden has records in unemployment, bankruptcies, and debts 5 6 7. 6 S argues that instead, one should invest in housing construction, industry, and an active labor market policy 6 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! Linus Sköld has asked me how I intend to act so that the Swedish economy will recover. He has also wondered how I, within my area of responsibility, intend to act to stop the wave of bankruptcies that continues to sweep across the country.
When the government took office, inflation was at around 10 percent. Families and companies were hit hard by the price increases, and the government's most important economic priority was therefore to bring down the high inflation. Now inflation has gone down to around 2 percent, but many still have it tough. Sweden's economy is still in a recession, even though several forecasts are now beginning to show light at the end of the tunnel and that a recovery is on the way.
The government's focus has therefore been to build a wealthier Sweden. It is about supporting the economy, among other things by strengthening the work line here and now, but also about strengthening Sweden in the longer term. The government supports the economic recovery with, among other things, reduced tax on work and fuels. But we are also making investments that will increase growth in the longer term. Better conditions for entrepreneurship, the largest research and innovation initiative ever, and historically large investments in infrastructure – these are important initiatives that both support the economy here and now and create growth over the coming decades.
The government is closely monitoring the economic situation, the bankruptcies, and the effect of the investments. Thanks to a responsible fiscal policy, Sweden has strong economic muscles to further support the recovery if needed.
Linus Sköld (S)
Mr. Speaker! Elisabeth Svantesson is palpably satisfied in her answer. I would say that the answer key for a Minister for Finance, or that which one evaluates one's performance on as Minister for Finance, should be the state of the Swedish economy.
Now inflation is turning upwards again. The first increases in interest rates have begun to arrive after a short period of reductions. Unemployment is the highest in decades. It is a record in indebtedness to the Enforcement Authority; Swedes' debts to the Enforcement Authority increased by 52 million per day last year.
The growth figures are at the bottom of Europe. Another not-so-flattering record is that of bankruptcies during the previous year. Over 10,000 companies went bankrupt last year. I took my starting point in the statistics for my home county, namely Norrbotten, when I submitted the interpellation. At that time, there was only statistics up to the month of January. Last year, Norrbotten had the highest bankruptcy figure in at least a decade. 160 companies that together turned over 567 million and employed 306 people went bankrupt during 2024. And this year has not started any better; so far this year, 21 companies have gone bankrupt.
On top of this, the largest bankruptcy to have hit the Swedish labor market in a very long time has occurred, namely Northvolt's bankruptcy in Skellefteå. It also concerns other places in the country, but in Skellefteå, this affects 4,000 employees. Yesterday, news came that yet another large industrial employer in the north is laying off 40 employees.
The outlook for the Swedish economy and for the number of jobs in Sweden and thus for the Swedish labor market is therefore not so good at the moment. Therefore, I find it surprising, Mr. Speaker, that Elisabeth Svantesson stands here in the speaker's chair and seems so satisfied.
For my part, I would think that more of the same does not work, and that should also be the Finance Minister's conclusion. Continuing to burn billions to lower the taxes for society's richest while simultaneously making the poorest poorer is not a good answer to what Svantesson should do about the wave of bankruptcies sweeping across the country. In any case, there is not a single sign in the economy that suggests her policy is working. As I said: We have record unemployment, we have record debts at the Enforcement Authority, and we have record bankruptcies. I would not be so satisfied when I evaluated my own contribution if this were the result of it.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! Thank you, Member Linus Sköld, for the interpellation!
Sweden is in a prolonged recession. Previous economic cycles, for example during the pandemic or the financial crisis, have been very deep but quite fast to recover. Now it is a completely different type of economic cycle.
Why is that? Sweden is an interest-sensitive country. There are very many Swedes who are highly indebted and who at the same time have short interest rate binding periods. In the USA, it is significantly more – I believe it is upwards of 80 percent – who bind their loans for up to 30 years. When the interest rate rises quickly, they are then not as affected as one is in Sweden.
It has been some tough years for Sweden and for many other countries in the EU. When it comes to Sweden and the economic situation we are in and the one I see ahead, I am not satisfied until Sweden and the households emerge from the economic situation stronger.
The budget that we now placed on the Riksdag's table and which began to apply just a few months ago is an expansive budget. In economic downturns, fiscal policy is usually used to jump-start the economy. For the first two years, we held back somewhat because we did not want to contribute to continued high inflation. It was 10 percent when I got this job, and it was completely devastating. If costs were to continue to increase at that rate, households, companies, and the economy of society would be hit very hard.
Now the IMF and other forecasters predict that Sweden will have a decent growth this year, among the better of the Western economies. It remains to be seen. It is about two things. It is naturally about consumption getting started, but with the uncertainty and unpredictability that exists in our global environment, it is not surprising that many consumers are holding back. The second part is precisely what happens in the global environment.
We have the foundations to manage this. We have a strong economy and strong public finances. We can use that strength to do more if required. But it is also about what is happening in the USA, in Germany, in France, and in various places around the world with partners and trading partners that we are dependent on.
I have spoken many times about the German economy. It has stuttered quite significantly over a few years. Now a new government is coming into place. I hope that it can create stability and that it can also accelerate that which Germany so badly needs.
What am I trying to say with all of this? Yes, that Sweden stands on a stable foundation but is in a recession. We see now that a recovery began at the end of last year, but we are still in a recession. The budget that has just begun to take effect is expansive to get the wheels turning, together with the Riksbank's interest rate cuts.
But the world around us has never been as uncertain as it is now. We have said that almost every day for five years now, it might feel like that, but it is uncertain. Therefore, things can happen in our world around us that cause Sweden's recovery to take longer. But we stand strong, and what I see ahead of me is that the bankruptcies in January this year were somewhat fewer than in January last year. We see a recovery. It might be too early to shout that the light at the end of the tunnel is bright, but I believe it. I make that assessment. On the way, however, a lot can happen.
I will not be proud until we have gotten ourselves out of this, the Swedish economy is growing significantly more than it is today and the Swedes have better purchasing power.
Linus Sköld (S)
Mr. Speaker! Thank you, Elisabeth Svantesson, for a somewhat more nuanced answer, even though I think it is noticeably passive to state that Sweden "finds itself" in a prolonged recession. It may be true, but if one formulates it in that way when explaining what is happening in the Swedish economy, it is as if one is placing the responsibility for one's own policy outside of oneself – as if the policy that the Minister for Finance is responsible for would not play any role in whether we emerge strongly from this recession or not.
If one were to present an expansive state budget in this situation, one could include measures that expand more than just the margins for the country's richest. One could, for example, present stimuli to ensure that housing construction is maintained or perhaps even increased. It would be the exact opposite of what the Finance Minister has done. When housing construction stalled as a result of increased material costs resulting from events in the outside world, what did the Finance Minister choose to do then? Yes, she removed the stimuli for housing construction that existed. That is what one could invest in to maintain the construction.
Then perhaps the largest bankruptcy in Norrbotten had not occurred last year, namely when a construction company in Haparanda with 60 employees went bankrupt. The Finance Minister's policy might have been able to remedy that if she had not simply coldly stated that we "find ourselves" in a recession, as if it were something she had no power over.
One could invest in real research and not just claim that one is making the largest investment in research ever. The difference between this year's resources for research and last year's resources for research happens to coincide almost exactly to the penny with what the government itself assesses is required for price and wage adjustments in that sector. It is therefore not an expansion; it is just about securing the value of existing levels of research funds.
One could invest in Industriklivet or in education policy when people become unemployed so that there were places for education. Both labor market training, folk high school, adult education and academy are being cut with this government's policy.
One could opt to invest in the welfare system. That would mean more people would get jobs and the welfare system would deliver better service. But the Finance Minister is only expanding the purchasing power for society's wealthiest and thinks that will be enough. Then she hopes that it will go well – it will pass soon.
I think the Finance Minister should evaluate his own policy based on its results. At the moment, as has been said, there are record levels of unemployment, record bankruptcies, and record debts to the Enforcement Authority.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I perhaps should not set such high demands that the members of the Riksdag should read our budgets. I will now tell Member Sköld what the budget contains.
I note that Sweden is in a recession. Contrary to what the member said, we are however active, not passive. When one faces a recession, one can see, among other things, that household consumption has decreased, and then fiscal policy can be active. Now it can be so to an even greater extent because inflation is lower than it was a couple of years ago. We have therefore, as I said earlier, presented an expansive budget and are now ensuring that taxes are lowered for everyone who works, who has a pension, and who saves in an ISK. We have also lowered the tax on fuels.
But we are also presenting an infrastructure bill with historically high appropriations. We are now going to pay off much of the maintenance debt that previous governments of various colors have left behind. We are making a major investment in research. We ensure that we improve the expert rules so that we get people who want to work here in Sweden in our highly qualified companies. We change the 3:12 rules, and we do much more.
We do this to boost the economy in the short and long term. I am convinced that one must be able to meet the challenges here and now, that is to say, do what can be done to get the wheels turning – and then taxes are not so bad, I should say, even if Member Sköld seems to think so – and furthermore, make different types of investments.
And to say the obvious: In recent years, this government has allocated great resources to welfare, which made it possible to manage the large hump of expensive pension costs. This year, the municipalities' and regions' pension costs are 50 billion lower because inflation has come down. Combating inflation and simultaneously supporting welfare so that there would not be mass layoffs there was important. The same applied to supporting households.
I see, Mr. Speaker, that Sweden has good conditions. When I meet my colleagues from other parts of the EU cooperation, I hear that many struggle with enormously high debt, low growth, poor productivity, and messy political situations. In Sweden, Mr. Speaker, we have stability in our economy and in politics, a majority behind the budget and furthermore a large majority behind the framework. We even have a totally unanimous majority behind the defense decision.
Linus Sköld (S)
Mr. Speaker! I return to my amazement over how palpably satisfied Elisabeth Svantesson is. Now, for the third time, she said that municipalities and regions have the money they need and that it is therefore not necessary to increase the general government grants. In fact, there is exactly zero increase from the state to municipalities and regions from 2024 to 2025. The Finance Minister knows this very well. She says what she says about pension expenditures because she is not delivering when it comes to the state's grants to municipalities and regions.
The inflation, which the Finance Minister is so pleased has gone down, is now turning upwards again. The first increases in mortgage rates have been announced. Unemployment is the highest in decades. Record after record of bad signs in the economy are now arriving. It is a record in debts to the Enforcement Authority, there was a record in the number of bankruptcies last year, and there are dismal growth figures, at the bottom of Europe. As I mentioned, 160 Norrbotnian companies went under last year, and Elisabeth Svantesson has responded that she will continue to lower the tax for high-income earners; then everything will be solved.
There is nothing that indicates this. What should be done instead is to invest in things that would provide growth, that would provide more jobs, and an active labor market policy that can take people from unemployment to the jobs that would grow if one were to pursue such a policy. But then one must dare to invest in housing construction, in industry, in labor market policy, in education policy, and truly in research – not just burn billions on lowering taxes for society's wealthiest.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I often hear assessments of my emotional level, what I think and feel, as well as what I express, which are not anywhere near how I myself experience things and express myself.
Let me be clear: It is a priority to get the economy moving. The fiscal policy is now doing what the fiscal policy should do. It is expansionary, lowers taxes and invests in infrastructure and research, and ensures that companies can meet the recovery and see increased demand.
We are well-equipped. That being said, the uncertainties are enormous. It sounds as if, according to Linus Sköld, it just depends on Sweden's government what happens in Sweden, and it is good that Linus Sköld gives us such a mandate.
So, things are happening in our world right now that also affect Sweden. What happens in Germany affects Sweden, and what could happen with the tariffs, as in the USA, affects Sweden. All of this affects Sweden. These were two things, but the list can be long.
One must know in these restless times that we are quite united in the Swedish Riksdag on the important matters, and that is something I am glad about. Our public finances are world-class. This means in practical terms that we can use the strength we have if the economic cycle were to deepen or be prolonged. Then we can make additional efforts, in addition to what we have done in this budget, to give momentum to the economy in the short and long term.
I will not be ashamed that we are actually approaching the goal from the 90s, namely that one should be able to keep at least the 50-lappen of a hundred – now there are hardly any 50-lappers left, so I feel old – but it is, therefore, about keeping 50 percent of what one earns. I do not think it is a bad policy, but I believe it is a good policy that encourages one to study, educate oneself and take an extra shift.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.