Thedéen says it is “an enormous position of strength” that Sweden has low national debt, order in the state’s finances, and a fiscal policy framework supported by all parties.
We still have that, but now a number of deviations have been made, he says, referring, among other things, to Sweden’s borrowing for the rearmament of the armed forces.
He believes politicians have “started to ignore” the framework and therefore wants to warn against too many or prolonged deviations from it.
If we do that, we risk having worse state finances.
The important thing is that international investors continue to see Sweden as a country with its public finances in order.
A decline in international confidence would mean that Sweden would have to pay higher interest rates on its national debt. This would hit the entire economy.
We see a number of examples of countries with high government debt that are experiencing major problems. We are far from ending up there, but it is important to warn in time.
Now we are borrowing more than 2 percent of GDP this year and next year. That’s quite a lot of money. If you do that for many years in a row and then have an economic downturn, you are in a bad situation.
