Now, the Swedish defense costs approximately 138 billion kronor per year and accounts for 2.4 percent of GDP. But this summer, NATO is expected to set a target of 3.5 percent of GDP for member countries – which would mean an additional 65 billion kronor for Sweden's part.
The question is how this will be financed.
It's too early to say, but it's obvious that we need to do more, says Finance Minister Elisabeth Svantesson (The Moderate Party) in SVT's program Agenda.
Lars Heikensten, chairman of the Fiscal Policy Council, talks about the need for higher taxes.
Svantesson says that nothing should be ruled out, but she is skeptical:
Raising taxes ... it's not on my favorite list. For there's a risk that you'll reduce the pressure on growth and competitiveness.
She talks about how GDP growth can release billions, about prioritizing state expenditures, and that the new balance target in the state budget from 2027 can provide defense billions.
Other proposals are to borrow, but Svantesson is also hesitant about that. If it's going to happen, it must be a one-time loan, she says.
At the same time, the Finance Minister exudes confidence and points out that Sweden has a unique political consensus on the main direction and has very strong public finances.
We stand on an incredibly strong and stable foundation.
