Local Regions Get More Money
The centre-right government has announced it intends to boost Sweden's municipalities and councils with some $US 810 million in order to combat recession. The leaders of the four-party-coalition revealed their plan on Monday afternoon during a press conference held in a school outside Stockholm.
The situation seems to be critical. When the Swedish Association of Local Authorities and Regions cried for help this spring, they demanded the government grant them some 680 million dollars as an extra-payment to ease the effects of the recession. But on Monday, the leaders of the four governing parties announced they intended to boost the municipalities’ and county councils’ shaky economies with an extra 810 million dollars – additional to the general payments local governments receive on a yearly basis. More than half of the money will be paid this year, the rest of the sum will be remitted over the next four years, according to the government.
Even though the Association of Local Authorities and Regions has conceded that the shortfall in taxes actually turned out less severe than feared, everyone expects the number of citizens relying on social welfare benefits to rise in the coming years.
Another more or less unforeseeable item on the bill is the preparations concerning a possible epidemic outbreak of the swine flu. Two weeks ago, the government had already signalized that local regions will get an extra 135 million dollars to vaccinate the population against the H1N1 virus that has already caused fatalities in Sweden.
At a press conference held in a school in Sollentuna, north of Stockholm, Prime Minister and head of the conservative Moderates, Fredrik Reinfeldt, and the other three coalition party leaders expressed their confidence that this budget proposal – in Sweden widely called the autumn budget (“höstbudget”) - will enable the state’s bodies on whatever level to cope with the national recession. The payments assessed would equate to some 13,000 jobs, the four party leaders explained which otherwise would have vanished due to the ailing economies of many cities and local councils.
In a first reaction, one of the three opposition parties, the Greens, welcomed the government’s plans. But, as the party’s economic spokesperson Mikaela Valtersson points out, the additional money should have come earlier to lower the burden for regions and municipalities. Many schools and hospitals might not have laid off staff, Valtersson criticized.
The head of the Association of Local Authorities and Regions, Anders Knape, also welcomed the budget proposal calling it a helpful means to avoid layoffs.
The centre-right government finds itself in a delicate situation. With only 12 months to go until the general election takes place, the approval rate of Prime Minister Fredrik Reinfeldt and his cabinet is fairly high. In recent polls, 60 percent of the Swedish electorate wants to see Reinfeldt as the country’s prime minister whereas merely 20 percent prefer his Social Democratic opponent Mona Sahlin.
At the same time, the Social Democrats along with the Greens and the Left Party would have a majority in the parliament if elections were held today. And with the unemployment rate expected to rise to some 11 percent next year, more and more voters could start to blame the centre-right government for the impacts of the recession. It remains to be seen if Monday’s budget proposal can avert a centre-right defeat in September 2010.