Social Democrats accuse government of reckless borrowing in spring budget debate

Sweden’s opposition Social Democrats have accused the centre-right government of pursuing “irresponsible financial policy” after it proposed borrowing an additional 7.7 billion kronor to fund tax cuts in its spring budget, SVT Nyheter reports.

Finance Minister Elisabeth Svantesson (Moderate Party) defended the plan, arguing that borrowing was necessary to “get the wheels turning” amid economic downturns linked to global crises, including the war in the Middle East. “In tough times, you invest to kickstart the economy, and in better times, you save for the bad ones—that’s the whole point,” she said in a debate on SVT’s Aktuellt.

But Mikael Damberg, the Social Democrats’ economic policy spokesperson, warned the budget would leave Sweden with “exploding deficits in public finances.” He claimed the government was borrowing to fund tax cuts “for the highest earners,” risking long-term financial instability.

“We’ve had four years of weaker growth than before, higher unemployment, and now a ballooning public deficit,” Damberg said. He added that Swedish consumers could end up “paying twice”—once through higher fuel costs due to failed climate policies and again through future austerity measures.

The government and its coalition partner, the Sweden Democrats, submitted the spring amendment budget to parliament on Monday. Key proposals include temporary cuts to fuel taxes and electricity subsidies to ease household costs. While the Social Democrats support the fuel tax reduction, Damberg criticised the lack of a broader strategy to reduce oil dependence.

Svantesson dismissed the opposition’s criticism as “hypocrisy,” noting that the Social Democrats had also run deficits. “I’d take Damberg seriously if his own party had ever balanced a budget,” she said. Both sides agreed on the need for borrowing to fund defence upgrades and aid to Ukraine, but Damberg argued the government had gone too far with unfunded tax cuts.