No mask requirement, open shops and restaurants and no lockdown – Sweden is following a special path in the corona pandemic from the beginning, which is being watched with excitement internationally. There are hardly any restrictions, the government relies on recommendations instead of bans. While many countries are temporarily in lockdown, life in the Nordic country continues comparatively normally.
The corona pandemic is also hitting Sweden hard. According to the European Center for Disease Prevention and Control (ECDC), the country has reported more than 320,000 infections so far – in relation to the number of inhabitants, that is almost twice as many infections as in Germany. Sweden is also not doing well when it comes to the death rate: According to the ECDC, 73.45 people die per 100,000 inhabitants in connection with Covid. In Germany it is 26.47.
If you look at Sweden’s direct neighbors Norway and Finland, an even more drastic difference becomes apparent: While there are more than 3000 sick people per 100,000 inhabitants in Sweden, there are only a little more than 750 in Norway, in Finland a little over 550. The number of Corona Meanwhile, deaths per 100,000 inhabitants in Norway is around ten times lower than in Sweden. Both Norway and Finland are taking significantly stricter measures than Sweden: Both governments imposed a lockdown early on.
With a view to the high number of infections and deaths, the Swedish King Carl XVI. Gustaf recently approved the Swedish strategy for “failed” – a significant signal, because such a political statement by the royal family is rare. The Swedish Corona Commission recently passed a similar harsh judgment: Sweden did not manage to protect older people from the virus. Nursing homes for the elderly were poorly prepared for the pandemic. According to the Corona Commission, 90 percent of corona deaths in Sweden are over 70 years old, and half of them lived in care facilities.
In view of the second corona wave, there are also increasing restrictions in Sweden: Public gatherings with more than eight people are currently prohibited, as is the serving of alcohol after 10 p.m.
GDP shrank comparatively little
On the other hand, Sweden has come through the Corona crisis relatively well economically. In the second quarter, in which the pandemic also showed its economic consequences in large parts of Europe, Swedish gross domestic product only collapsed by 7.7 percent, according to Eurostat. This means that the slump in Sweden is somewhat stronger than in the neighboring countries of Norway and Finland, but it is still well below the EU average of 13.9 percent. For comparison: In Germany, the gross domestic product fell by 11.2 percent. The Swedish Ministry of Finance expects GDP to decline by 2.9 percent in 2020. Swedish Finance Minister Magdalena Andersson stated that the fall recovery was stronger than expected.
“Against this background, the mood in the country is currently rather confident, even if not in all industries,” says Valle Wigers, press spokesman for the German-Swedish Chamber of Commerce. For areas such as the hotel, gastronomy, tourism, trade fairs and events, an end to the crisis is not yet in sight. In bilateral trade between Sweden and Germany, a decline of around eight percent is expected this year.
“Compared to other countries, Sweden has not been hit so hard economically,” says Lars Calmfors, economist and professor at the Institute for International Economic Studies at Stockholm University. But it is difficult to say to what extent this is solely related to the Swedish strategy. “Many other factors play a role here: economic structures, fiscal support measures, the spread of the virus,” he says. The areas of the economy that require direct contact, such as tourism, the event industry and gastronomy, are particularly affected. The industry, however, is doing better after a slump in spring and online trading has also grown significantly. With a view to the high number of infections and deaths, however, he points out: “We may have won something economically, but the price for it was very high in view of the loss of human life.”
Would a lockdown be better for the economy?
Calmfors is one of the critics of the Swedish government’s corona strategy and pleads for stronger restrictions – also in the interests of the economy: “I think if we had a strict lockdown for a few weeks, the economy would suffer during this period, we would in the long term but benefit, ”he says. In this way, the number of infections can be reduced and fewer spontaneous interventions are required. Calmfors is certain that the conflict between business and health would not have existed at an earlier stage. “It would have been enough, for example, to issue quarantine rules, restrict public gatherings and expand tests. That would have been good for containing the pandemic and for the economy. “
There is disagreement in Sweden as to whether the law even allows a lockdown. In the spring, during the first wave of the pandemic, there was a special pandemic law that would have allowed the government to impose a lockdown. However, that ran out in the summer. Now a new law should come quickly. However, it will take until March for this to come into effect – too long to bring the second wave under control quickly. There is also a debate among experts as to whether the Swedish law allows a lockdown, according to Calmfors. “I think we should act now. And we could act within a week if there was the political will, ”he says. “I am very critical of the government for not doing this. It’s like we’re always running a bit behind. “
On one important point, Calmfors agrees with the Swedish strategy: “It was right to leave elementary schools and daycare centers open,” he says. “The economic consequences of children who cannot learn are high and have a long-term effect.”
Benefits for resident companies
The fact that there has not yet been a lockdown in Sweden has an impact on companies located there: “Unlike in many other countries, factories, offices, shops and restaurants in Sweden could remain open with certain restrictions,” says Wigers. “Basically, companies are certainly grateful to have a bit of normalcy in everyday business.” The government merely appeals to companies to let as many employees as possible work from home.
Sweden’s position as a pioneer in digitization is of great importance here. Sweden ranks second after Finland in the EU Commission’s Digital Economy and Society Index. “For the vast majority of companies, switching to home office wasn’t a major challenge,” says Wigers. The situation is more difficult for retailers and restaurants because there would be no corresponding full state funding without a lockdown.
Comprehensive economic aid
The Swedish government has launched a comprehensive aid package to cushion the economic effects of the Corona crisis. The introduction of short-time working, which is used by many companies, is considered a successful measure, according to Wigers from the German-Swedish Chamber of Commerce, which supports German companies in Sweden in getting help. Employees receive up to 90 percent of their original salary, with a reduction in working hours of 20, 40, 60 or temporarily 80 percent. “The government measures have been very effective,” says Wigers.
A survey by the EU Parliament shows: Swedes see their personal income significantly less threatened by the corona pandemic than the EU average. According to the survey, 38 percent of Swedes think that Corona will not have any impact on their income – the EU average is only 27 percent.
Calmfors also considers the government’s economic aid to be effective so far. Should there be a lockdown, further measures would have to be added, but Sweden is in a very good position here. The debt ratio was comparatively low and increased more slowly than expected. “So we could really afford to compensate companies for the economic consequences of a lockdown.” The Swedish debt ratio is a little over 40 percent, the German a little over 60 percent.
A controversial way
The Swedish special route is discussed internationally. Some consider it a positive example of how one can protect the economy in the Corona crisis, others strictly reject it with a view to the infection numbers. “It’s too early to take stock,” says Valle Wigers. Which strategy works best will only be known when the pandemic is over.
In Sweden, too, not everyone agrees which path is the right one. The Swedish special route polarizes society, says Calmfors. “We are experiencing a divided Sweden, similar to the polarization between Democrats and Republicans in the US,” he says. There are no demonstrations and a broad consensus in politics, but not in the population.
“There are voices in Sweden who say that the economic consequences are more severe than the health consequences because it affects people over the age of 70,” says Calmfors. “That shakes me a lot. As if we shouldn’t count people just because they’re over a certain age limit. This puts you on very thin ice. “
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