‘They will not win’: Sweden’s finance minister insists Ukraine cannot lose the war

I mean the Swedish economy is in good shape, but we have this recession that we meet now it’s because of course the Swedish households are quite in depth and adjustable rates is the most common. It’s very common for Swedish households. So when you know the interest rate cut up, the consumers really held back and also we see of course the investment in in construction is is very low. So we’ll see this year and a bit in next year we’ll be in a mild recession, but then we will turn up again. As you talk about the pressure on households, last year the Ricks Bank was sounding more hawkish than others as it tried to shield the battered currency. And this year we have witnessed even more greenback resilience. As we talk about potential policy divergent, how concerned are you about the the weakness in your currency? I mean that it’s troubling of course and but I think it will get stronger because it’s I think it’s underestimated and it will get stronger. But you know Sweden have own currency not very big economy. So it’s a bit, I mean it’s a bit shaky and so I’m not that surprised but I’m surprised that it has been so weak for for a bit too long. Policy actions to the upside by central banks have been slow to to take hold. But when we talk about Sweden a very different makeup here and a lot of households having variable mortgages. Does that mean when the rate cuts gallop pace that the relief comes much quicker to the Swedish economy? Yeah I what we see, we see we will be in a recession this year and next year. But I I think it’s you’re on to something because it’s also like hopeful now because inflation is has really come down. When I got this job 18 months ago it was my first priority to keep have restrained the budget even though we had a bad recession restrained the budget to get the inflation down and now when we see that and the the Riksbank the central banks is also saying we will yeah you know we will take the the rates down that’s people feel some bit spring feeling I I’ve said we have we’ve had an economic winter but now we’re turning to more of a a spring inflation is at 2.2% in the latest metrics in March. How far along the road do you think you are in terms of battling inflation. I think I usually say we we’re not on the final round but but very close but we know we can now and in the Middle East we can. I mean the oil prices the the the shipping costs and so on can I mean it can be like traveling when it comes to the supply side. So and we keep our eyes on that of course. But I I’m quite confident that we really have won the the battle of inflation. Let me just get a little bit more detail on that because the events over the weekend, Iran’s direct attack on Israel no longer using proxies. To some Middle East watchers, that is a scary turn of events. Markets didn’t necessarily react the same way, but there’s still potential that that could happen. What would the worst case scenario be for you around the Middle East? I mean the worst case. This is continuing, of course. I mean that’s about human suffering first of all. But when it comes to economy, of course this can be really problematic. I mean we have Ukraine, it has affected Russians. Russia’s war in Ukraine and and against Ukraine has affected the economy very much and this can do too. So we have to be calm of course when it comes to to what what kind of fiscal policy we need farther along along the road. But right now if it’s doesn’t get too the conflict doesn’t get bigger, I think we can be quite sure that we will have a better economy coming years more in Ukraine continues and again more calls and more needs that need to be met. On funding, we’ve seen it expressed through the United States with difficulty in finding enough political support in Europe. Some member nations too are pushing back against accession for for Ukraine, imports of farm goods from the country. When it comes to the support in Europe, how would you describe it? Do you think it’s waning? I actually, when I’m here, I see as my absolute most important task to talk about Ukraine because I mean we’re not doing that just for Ukraine. We’re doing it for Europe and we do it again for of course for Sweden. I mean because Putin and Russians they are not. They are not they can go on for a long time and it can it can be much wider this war. So and I I’m worried that some European countries and also around the world is getting a bit more hesitant when it comes to to support. That makes me it makes me sad but also determined to to convince them we have to keep on support Ukraine because if they lose, we all lose. If they start to lose, if the optics start to change here what does that do for investor sentiment in Europe. I mean I mean we have first of all what I think first of all if they they they can’t lose. We can’t. We we must help Ukraine. So like I don’t lose. So that’s not really in my mind because I mean if Russia wins here we will have much trouble years ahead. So no, they will not win. Can I ask you about Sweden’s accession to NATO and how that’s changed? I mean from the previously neutral stance, what’s been the impact at home and changing thinking, changing investment in certain industries, What are the consequences being pretty quickly. I mean we’re some of our parties have been pro NATO for many years but then the the one of the biggest bigger parties was negative but then came Russia’s war in Ukraine. So from that point things shifted very quickly especially since Phil also shifted and and we wanted to go the whole Rd. together of course. So now we have like a very, very broad majority in the Swedish parliament. Foreign native membership and Swedes are very prone now because we all realize this is coming very close. We can’t stand all on our own. We have to do this together with others and I’m very proud that as a Ministry of Finance we have a bit over 2% of when it comes to the NATO standard of of GDP. So we are growing our defence together with others and it’s it’s a good opinion, yeah.