Published 16.23
Riksbank Governor Erik Thedéen sees a tendency for politicians to thumb their noses at the fiscal policy framework. Something that worries him.
– You have to warn in time, he says.
Thedéen says that it is “an enormous position of strength” that Sweden has a low national debt, order in the state’s finances and a fiscal policy framework that all parties stand behind.
– We still have that, but now a number of deviations have been made, he says, referring, among other things, to the fact that Sweden has borrowed for the modernization of the defence.
He thinks the politicians have “started thumbing their noses” at the framework and therefore wants to warn against too many and too long deviations from it.
– If you do that, we risk getting worse state finances.
– The important thing is that international investors continue to see Sweden as a country that has its state finances in order.
Worse international trust would mean that Sweden would have to pay higher interest rates on the national debt. It would hit the entire economy.
– We see a number of examples of countries with high national debts that get into big problems, we are far from ending up there, but it is important to warn in time.
– Now we borrow more than 2 percent of GDP this year and next year, that’s quite a lot of money. If you do it for many years in a row and then perhaps have an economic downturn, then you are in a bad situation.
