While some countries, such as France, are announcing drastic budget cuts in an attempt to reduce their ever-increasing public deficits, Sweden is taking the opposite approach. On Thursday, October 17, six of the eight parties represented in Parliament – the Conservatives, the Christian Democrats, the Liberals and the far-right Sweden Democrats, who make up the majority, and the opposition Social Democrats and Centrists – announced that they had agreed to abandon, once and for all, the "budget surplus target" adopted 25 years ago, in the wake of the economic and financial crisis that struck the kingdom in the early 1990s.

Under this rule, the Swedish government, regardless of political stripe, must present a budget in surplus, to the tune of 0.33 % of gross domestic product (GDP). A complementary mechanism requires governing parties to keep public debt below 35% of GDP for the foreseeable future. By 2023, it stood at 31.5% of GDP, one of the lowest levels in the European Union.

As a reminder, in 1996, the public deficit stood at 11% of GDP, and public debt had reached almost 70% of GDP, compared with 37.8% six years earlier. From 1999 onwards, successive governments were forced to present a surplus budget of 2% of GDP, then 1%, from 2007, and 0.33% since 2019.

For a long time, consensus prevailed. The trauma caused by the disastrous state of public finances at the end of the 1990s crisis left its mark on a whole generation of political leaders, for whom budgetary orthodoxy was the only way forward. But in recent years, this sacrosanct principle has begun to be challenged. First, by the far left and trade unions. Then, by economists, some right-wing parties and even employers who worry that reducing debt at any cost will result in huge investment delays.

In a report published in June 2022, the Confederation of Swedish Enterprise estimated that road renovation and rail system development required at least SEK 70 billion (€6.14 billion). If investments were delayed, that sum would double by 2033. And that isn't all, given that the defense budget more than doubled between 2020 and 2024 and is set to increase by a further 50% by 2030, while electricity production will have to be at least doubled by 2050.

Hence the proposal to abolish the budget surplus target, replacing it with the balanced budget rule. According to Hans Lindberg, president of the committee responsible for making proposals to the Swedish parliament's finance committee, such a reform would generate "25 billion [kroner] a year."

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