Sweden

III - Changes to Constitutional Law

Nature national instruments      
III.1
What is the character of the legal instruments adopted at national level to implement Euro-crisis law (constitutional amendment, organic laws, ordinary legislation, etc)?

Changes have so far only been made to ordinary legislation. The procedure and arguments for using that procedure has been described under Question V.2 and Question IX.2.

Constitutional amendment   
III.2    
Have there been any constitutional amendments in response to the Euro-crisis or related to Euro-crisis law? Or have any amendments been proposed?

There have been no constitutional amendments and no amendments have been formally proposed by the Government.

Constitutional context
III.3
If national constitutional law already contained relevant elements, such as a balanced budget rule or independent budgetary councils, before the crisis that are now part of Euro-crisis law, what is the background of these rules?

It should first of all be pointed out that most of the relevant rules are not provided in constitutional law, but in ordinary legislation and practice.

As previously explained, Sweden has not suffered badly by the euro-crisis. As explained by Boije, Kainelainen and Norlin[1] :

“Even though the financial crisis affected Sweden similarly to other countries in terms of loss of GDP, the effect on the public finances has, largely, been less severe. Deficits have been modest, even though Sweden has pursued among the most active contra-cyclical policies during the crisis. This combination was made possible by the large pre-crisis net lending surpluses. Each year since 2000, Sweden has abided by the numerical rules in the SGP and is one of the few EU member countries that have managed to also abide by the rules during the current crisis. The financial markets also seem to have confidence in the sustainability of the Swedish public finances; the interest spread to Germany is close to zero, unlike the case for many other EU countries. This has been important for the effectiveness of the stabilization policy measures taken to combat the crisis.”

How can this then be explained? Why did Sweden do so well in the euro-crisis? According to Boije, Kainelainen and Norlin, one explanation is found in the Swedish fiscal policy framework, which contains many of the elements now introduced by euro-crisis law:

“The relatively favourable development of Sweden’s public finances can probably, to a large extent, be attributed to the introduction in 1997–2000 of a well-defined national fiscal policy framework, consisting of a surplus target for general government, an expenditure ceiling for central government (combined with a stringent top-down budget process), and a budget-balance requirement on local governments. It also reflects a strong political commitment to adhere to this framework. Since 2007, a Fiscal Policy Council has played a central role in the external monitoring of this framework.”[2]

The background to many of these rules is the severe financial and economic crisis that Sweden faced in the early 1990s. There was a sharp recession and the banking system nearly collapsed. In the beginning of the 1990s, Sweden’s deficit was 11 % of GDP and the debt was about 70 % of GDP. This required a government rescue and the implementation of a consolidation programme adopted by a broad support from the political parties. Following the crisis, Sweden established strict budget rules. For example, Sweden already has independent budgetary councils (Question VII.5), balanced budgetary rule for local government (Question IX.4), and MTOs even more ambitious than what is now introduced on the EU level (Question VII.11).

Purpose constitutional amendment 
III.4
What is the purpose of the constitutional amendment and what is its position in the constitution?

No amendments made, and no amendments proposed.

Relationship with EU law        
III.5
Is the constitutional amendment seen as changing the relationship between national and European constitutional law?

No constitutional amendments.

Organic law      
III.6
Have there been changes to organic laws or other types of legislation that are of a different nature or level than ordinary legislation, in relation to Euro-crisis law or the budgetary process?

No.

Constitutional amendment and ordinary law       
III.7
If ordinary legislation was adopted in conjunction with a constitutional amendment, what is the relationship between the two?

No constitutional amendments.

Perception source of legal change   
III.8
In the public and political discussions on the adoption of ordinary legislation, what was the perception on the appropriate legal framework? Was the ordinary legislation seen as implementing national constitutional law, or Euro-crisis law?

There have been no objections raised to the choice of appropriate legal framework. There has been no such debate.

Miscellaneous
III.9
What other information is relevant with regard to Sweden and to changes to national (constitutional) law?

No other relevant information.

[1] Robert Boije, Albin Kainelainen and Jonas Norlin, ‘The Swedish fiscal policy framework’, Nordic Economic Policy Review, Number 1/ 2010, p 201.

[2] Ibid.