Swedish Government launches €27 billion rescue plan for its economy

epa08296126 Sweden's Prime Minister Stefan Lofven speaks during a news conference on the Coronavirus situation at the government headquarters in Stockholm, Sweden, 15 March 2020. Several European countries have closed borders, schools as well as public facilities, and have cancelled most major sports and entertainment events in order to prevent the spread of the SARS-CoV-2 coronavirus causing the Covid-19 disease. EPA-EFE/JANERIK HENRIKSSON SWEDEN OUT

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The Swedish government on Monday presented a package of measures worth more than 300 billion Swedish crowns ($30.94 billion) to support the economy in the face of the coronavirus pandemic.

The package included measures such as the central government assuming the full cost for sick leave from companies through the months of April and May, as well as the brunt of the cost for temporary redundancies due to the crisis.

Reuters reports that “the biggest cost will come from allowing companies to put off paying tax and VAT for up to a year – retroactive to the start of 2020 – which Finance Minister Magdalena Andersson said by itself could cost up to 300 billion crowns in the short term.”

“We want this decision to mean that as many companies as possible get through this crisis so that we can protect Swedish companies and Swedish jobs.”

Andersson said that Sweden was in a strong position to bear the financial costs of the outbreak with strong government finances and government debt at its lowest since the late 1970s.

Sweden has already announced extra cash for local authorities to help fight the coronavirus outbreak while the central bank has provided up to 500 billion Swedish crowns in loans to companies through the banking system.

The Swedish Central Bank lent up to 500 billion kroner ($51 billion) to banks to maintain the supply of credit to companies. The measure “should be regarded as a form of insurance that enables Swedish companies –- particularly small and medium-sized enterprises –- to feel secure that the credit supply will not fail,” said Governor Stefan Ingves.

 

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