The post-war world order is disintegrating, and Sweden – and Europe – must see to their own house. This through the upgrading of defense and critical infrastructure at a cost of hundreds of billions of kronor.
Swedish upgrading can initially be financed through borrowing, but in the long run, it's about "ongoing resource consumption, which should be financed with ongoing revenues", according to Eklund and Sterte. This means tax increases and cuts in the public sector.
The core of welfare – healthcare, education, and care – should be protected as far as possible, the economists believe. So should neglected areas such as transport and energy sectors, where resource needs are large and increasing.
The tax on labor, where Sweden is internationally high, wants to avoid, and instead consider reviewing reduced VAT, interest deductions, and property tax, where Sweden is low.
"Sweden has for too long chosen to ignore the approaching storm clouds. And when facts change, one must change policy. If we mean business about wanting to help Ukraine and build new security in Europe, we must discuss even the difficult questions".
