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Political Brief Sweden April 2020

Coronavirus Pandemic Causes Political Reorientation

The coronavirus crises will change the political landscape. The primary crisis is the spread of the virus and the resulting health consequences. The secondary crisis is the economic blow caused by the restrictions necessary to curtail the spread of the virus. The third, not yet present and still avoidable, crisis could be political, if the public loses trust in the crisis measures put in place by the government and political parties.

Cooperation expected

The political challenges in this present crisis are new. They not only present the parties with a chance to reorient themselves, but are actually driving the change. The parties will be able to and need to revisit policies, cooperation and even conflicts of the past. They are being given a chance to reflect and to reduce the level of conflict in Swedish politics, since parties and political leaders are expected to cooperate during a crisis. They are also pushing very different political issues, namely healthcare and economic policy, into focus.

The right-wing populist Sweden Democrats, who have put such pressure on the major parties are presently void of answers. Public trust in the Prime Minister and the Social Democratic Party has increased. People gather behind political leaders during difficult times. The Moderate Party, of the opposition, is focusing on launching crisis mitigating proposals of their own. At this time, there is very little criticism of the government’s crisis management measures.

Proposals to counter economic difficulties

The government has put forward four sets of proposals to counter the economic effects of the coronavirus pandemic. They aim to support the liquidity of companies and help them cope with this sudden and extreme lack of demand. They also aim to support the people left unemployed as hard hit companies are forced to reduce their staff.

No expense will be spared, and this sets of proposals will be followed by additional ones. Since public debt is very low, Sweden is in a favourable position to meet a weakened business cycle through increased public spending.

A defining factor in the implementation and success of these measures is how long the coronavirus crisis will last. Short-term restrictions on public life and businesses to mitigate the spread of the infection are difficult, but a crisis that drags out in time will be an entirely different challenge. Many companies might be able to hold on with assistance from government programs in the short-term, but would not be able to persevere in the long-term. A rapid fall in GDP during the spring could be followed by fairly rapid recovery, but a dragged-out stand-still of the economy would be very hard to handle.

Should either the healthcare system or the economy take significant hits, trust in politicians would be at risk.

A deepened relationship

So far, it appears that the coronavirus crisis has helped the red-green government, consisting of the Social Democratic Party and the Green Party, and its cooperating partners, the Liberal Party and the Centre Party, to come closer together and deliver crisis mitigating measures.

The 73-point program, the basis for the four-party cooperation, was an answer to how to manage the result of the last general election. However, the parties would soon have been forced to start considering how to win the next general election. That could have led to the broad-based political cooperation either being shut down or the opposite: a deepened four-party cooperation with a common offer to voters. The least likely scenario would have been a continuation of the status quo. Now, the coronavirus crisis has changed the political landscape and there are now signs of a deepening cooperation.

The coronavirus crisis is, however, still young. There is a possibility that the government and the cooperation will be put under severe pressure if the medical and economic effects on society become more obvious and severe. Many difficult decisions will then need to be taken.

Role of the opposition

The role of the opposition is difficult. The parties cannot be too critical of the government since that would be negatively perceived as an attempt to obstruct ongoing crisis management at a critical time. To be relevant, the parties of the opposition instead need to propose reforms and crisis measures which are complementary to those introduced by the government, and also constructive and relevant. There will be a time for evaluation of how the crisis was handled, but now is not that time.

In just a few weeks, the political debate has seen a complete shift of focus. The formerly dominating fields of policy (migration and crime) have completely faded to the background. The only issue presently discussed is the coronavirus pandemic and its medical and economic effects. It is likely to remain that way for the duration of the crisis, which may benefit the Social Democratic Party and the Moderate Party.

Companies and organisations must seek dialogue

Since we, including the government and political parties, are in unchartered waters, it is very important for companies and organisations to follow the political debate. It is even more important to contribute to identifying political decisions that will be necessary to prevent an economic downturn. Close dialogue with stakeholders based on well-analysed positions will be key to preventing some sectors from being left out of future proposals to mitigate the crisis. Companies and organisations are well advised to assess how they can be of assistance to society during these difficult times.

In response to crises, political processes and the government work much more rapidly than usual. No actor can wait to be called upon. They need to be proactive. Actors being constructive and lending a helping hand to society stand to benefit in the long run. Actors seen as neglecting to step up when needed stand to lose significantly.

Voters will be searching for leadership, both in politics and civil society.