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When the pandemic began in earnest in early March last year, it became a fatal blow not only to public health but also to many businesses. The stock market crashed, restaurants and stores emptied, and hotel rooms were suddenly empty.
During the first weeks, the government and support parties introduced the Center Party and the Liberals, among other things, support for short-term work, various credit guarantees, and lower employer contributions. Since then, the support has been expanded and restocked.
According to the latest quote, the sum of money that has been set aside so far for various crisis measures amounts to 389 billion SEK. This corresponds to more than a third of the state’s revenue for a full year. In comparison, the defense costs around 60 billion per year and the entire judiciary 50 billion.
It’s still very early to say what long-term consequences the pandemic will have for the Swedish economy and business. So far, bankruptcies have not increased in the country on average, although some industries have had it much more difficult than others.
– The big picture is that the aid has served its purpose and that we have been able to avoid a much worse crisis. If we hadn’t had these kinds of measures, we would have had many more bankruptcies and layoffs, says Jonas Frycklund, deputy chief economist at the Confederation of Swedish Business.
Jonas Frycklund, Deputy Chief Economist at the Swedish Business Confederation.
Photo: Ernst Henry
Swedish business believes that the design of the support measures that the government has implemented against companies is good: short-term layoffs, support for adjustment and tax credits. However, there are many details that could have been better. Businesses have ended between presidents, the rules have sometimes been unclear, and there has been too great a difference between how quickly different authorities handled requests.
– Much of it falls on politics. Then there are certainly explanations about the EU approvals and other things that have taken time, but if the government had acted faster, it would have done so too.
This spring, there was a climate of crisis that made the government act faster. During the second wave, it has been slower to get shots.
Jonas Frycklund also sees a clear difference between how the government handled the crisis during the first wave and how it looked during the fall.
– In the spring, there was a climate of crisis that made the government act faster. During the second wave, it has been slower to get shots. They weren’t really prepared when the spread of the infection accelerated again in the fall and further action was needed, he says.
The biggest item in the government support package there are short-term layoffs. The current assessment is that such support alone will cost SEK 52 billion for 2020 and 2021. But it is not yet clear how the final bill will arrive. When the government first launched the system, the cost was estimated at 2 billion, later during the pandemic, Finance Minister Magdalena Andersson (S) estimated that the cost of short-term layoffs could be as high as 95 billion. .
The same uncertainty applies to several other support measures, such as reductions in employer contributions or support for sole proprietorships. So far, the government has set aside more money than has been paid.
LO Castle in Stockholm.
Photo: Magnus Hallgren
LO also gives a lot all the government a good rating for the support measures that have been implemented.
What has worked particularly well is short-term work, temporary improvements to the unemployment insurance fund, and resources for welfare and the education system, says LO chief economist Ola Pettersson.
At the same time, he would have liked to see a more generous dismissal system for those who cannot work at home.
– It is still LO groups that have maintained this during the pandemic, such as auxiliary nurses, bus drivers and sanitation. We need a system for short-term jobs that works for all industries, says Ola Pettersson.
He believes that the most important When the pandemic subsides, it will be to strengthen insurance systems, among other things by permanently increasing the temporary increase in the unemployment insurance fund.
– It is strange that the government first claims that the unemployment insurance fund and health insurance are not up to par during a crisis and then only make temporary changes. It would be better to tell employees that we made a mistake, we have too weak insurance coverage and now we are doing it again, says Ola Pettersson.
Read more:
Magdalena Andersson: There is a lot to learn
