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Is Sweden's government ready to bring in 'a modern war economy'?

The overarching theme of the ruling Moderate Party's annual congress for local politicians over the weekend was defence, and more specifically how to pay for it. "It is sometimes said that freedom is priceless, and that's true," Sweden's prime minister Ulf Kristersson declared in his speech launching the congress on Friday. "But it is equally true that freedom comes at a price." He made no mention of US President Donald Trump's embrace of Russia and its president, Vladimir Putin. But the 143 billion kronor the government had only a few months ago decided to pump into defence in 2025 ‒ double what it spent only a couple of years back ‒ would now "not be enough", he said. He had, he announced, instructed Finance Minister Elisabeth Svantesson and Defence Minister Pål Jonsson to prepare for a much bigger increase in defence spending in time for the extra amendment budget in the spring. The next day, Svantesson went further still in preparing people for the coming bill to be paid. "What I say might sound a little drastic, but I see a modern war economy ahead of me," she said in her speech. They're not alone. German MPs on Tuesday voted to exempt defence spending from the country's strict debt rules and to set up a 500-billion-euro fund for infrastructure investments, a move incoming Chancellor Frederik Merz described as "nothing less than the first major step towards a new European defence community". Denmark's government, meanwhile, has allocated 50 billion kroner to a new defence fund . Advertisement The jury is out, though, on whether Sweden's government is willing to back its tough rhetoric on defence spending with unpopular decisions. "Stronger defence is going to require some prioritising," Kristersson warned, but then immediately promised that the increase would not be funded either by "damaging taxes" or by cuts to healthcare, schools and elderly care. Svantesson, meanwhile, backtracked on her 'war economy' rhetoric, joking that no one should expect WW2-style ration cards or to be forced to drink 'coffee substitute', promising instead a streamlining of government spending, with "fewer press officers". She also promised an increase in borrowing. "We are going to need to borrow money to quickly reach the level of spending required." The opposition Social Democrats were willing to go further. The party's leader, Magdalena Andersson, and its finance spokesperson, Mikael Damberg, preempted the Moderates' conference, calling on Thursday for a 250 billion kronor defence fund. The fund would be debt-financed and would help cover defence spending over the next ten years. "This needs to happen at a furious tempo," Andersson said. Advertisement Unlike the Moderates, the Social Democrats want defence spending to be partly funded by higher taxes, with the party repeating calls for a beredskapsskatt or 'preparedness tax', which would be levied on top earners. Both the former communist Left Party and left-wingers within the Social Democrats welcomed what they saw as Andersson's abandonment of the balanced budget target she agreed with the government parties last year. The Left Party's leader Nooshi Dadgostar claimed that Andersson's proposal essentially spelled the end of the target, and opened up instead to the deficit financing the Left Party has long called for. "This is about loaning to invest," she said. "That's the whole point of taking away the brakes on investment and that is what the Social Democrats are now proposing," she said. Daniel Suhonen, part of the Reformisterna left-wing group of Social Democrats, also congratulated Andersson, writing on X that it was "a milestone" in the party's development, as did Lisa Nåbo, chair of the party's youth wing, who said that the decision to use deficit financing would allow Sweden to catch up with long-delayed but necessary investment in infrastructure. Advertisement Andersson, however, denied that she was abandoning her commitment to balanced budgets. "Our judgement is that it should be plus and minus in the government finances in the long term. That is a good thing that gives us strong finances," she said. "But exceptional times require exceptional measures and we are in an exceptionally dangerous security situation right now." These are the first moves of what promises to be the big political debate in Sweden, as in other European countries, over the next few years: should defence spending be funded by cuts to welfare and public services, hikes to taxes, or ‒ most likely ‒ both? It remains to be seen how bold each side is willing to be. Advertisement What else has been happening in Swedish politics? Centre party finance spokesperson in the ring for leadership Martin Ådahl, the Centre Party's finance spokesperson, has declared himself open to joining the race to become the party's next leader, while stopping just short of throwing his hat into the ring. Ådahl said the party should refuse to choose sides between the two blocks before the votes are counted in the 2026 election, and should stick with a promise not to join a government dependent on the Sweden Democrats. Instead, he said, the party should focus on jobs, enterprise, spurring growth and investing in roads, railways, healthcare, schools, and the green transition. Ådahl said he couldn't yet confirm if he would be a contender, but was "honoured that he had received the question from members". The MP Elisabeth Thand Ringqvist and the head of the farmers' union, Anna-Karin Hatt, have also refused to rule themselves out. Environment minister snubs climate council report release Sweden's environment minister Romina Pourmokhtari has decided not to attend the release of the Swedish Climate Policy Council's annual report on whether the government is doing enough to put the country on track to meet its climate goals at a press conference on Thursday. Daniel Helldén, joint leader of the Green Party described her no-show as " otroligt anmärkningsvärt", or literally "unbelievably worthy of note". This may sound mild when translated into English but in Swedish it's relatively harsh. "This shows that the government really isn't prioritising the climate issue. I've never heard anything like it."