Mundus Brief: May 2020 in Review

“You ask, what is our policy? I will say: It is to wage war, by sea, land and air, with all our might and with all the strength that God can give us; to wage war against a monstrous tyranny, never surpassed in the dark and lamentable catalogue of human crime. That is our policy.”

Winston Churchill, 1940

In May 1940, Churchill addressed the British Parliament. His fighting spirit could not stop the almost immediate military catastrophe as Britain’s army was defeated on the continent and it was forced to evacuate from Dunkirk. The military situation improved little for Britain over the next two years, until eventually turning around in 1943.

Eighty years later, Stefan Löfven described Sweden’s corona strategy.

“We have chosen a strategy of trying to flatten the curve and not get too dramatic a process, because then the healthcare system probably will not cope. But it also means that we will have more seriously ill people who need intensive care, we will have significantly more deaths. We will count the dead in thousands.”

Stefan Löfven, 2020

Later in the same interview he was asked whether he had ever doubted that Sweden has chosen the right strategy? Löfven responded,” The strategy to minimize the spread of infection is right … We must also dampen the consequences for jobs and the economy … To limit the spread of infection and do the other parts of the strategy [jobs, economy, industry] – that’s right and I feel that is right.”

Each leader spoke with earnest seriousness about an imminent life-threatening challenge to their country, and each was to be challenged immediately by calamitous events that cast doubt on the credibility of their strategy. For Churchill it was the military failure that let to Dunkirk. Löfven has had to deal with the catastrophic situation in Sweden’s nursing homes. Each will have to wait for years to know if they got it right.

It is perhaps unfair to make the comparison between the two examples, but it helps to draw the distinction between Sweden’s corona strategy and events. Whereas Churchill had just one single aim, “Victory at all costs”, Löfven allows for a trade-off between health and the economy. While Sweden (and many Swedes) accepts that it has made mistakes in implementation, the government does not believe that it has had the wrong strategy. Nevertheless, there will now be an inquiry to establish facts.  

Mundus News has followed closely what international media has been reporting about Sweden. There has been intense focus on Sweden’s corona strategy, some of it genuine interest in the results, some hoping to prove a point. As an example, on June 4, the Guardian, BBC, Bloomberg, Financial Times, Reuters, AFP and Politico all reported that Tegnell said that too many had died in Sweden. That is a lot of coverage for the words of a mid-level official. There is a risk for Sweden that a narrative develops that equates individual failures this an acceptance that the strategy was wrong. These risks amplified in May, as the results of the wide-scale testing in Stockholm indicated much lower prevalence of antibodies than Tegnell and the Public Health Authority had been expecting, as we discussed in our blog. An unintended consequence of this for Sweden was that it suffered the ignominy of being left out of a Nordic travel bubble, which was not just an embarrassment for Sweden that its closest neighbours have safety concerns about contact with Swedes, but also has a harsh effect on local economies, such as Skåne and those along the Norwegian border.

But one battle doesn’t have to define a war. Tegnell said that the nursing home failure “does not disqualify our strategy as a whole”.  Sadly, it is less well publicized that Professor Neil Fergusson from the UK, who has previously argued with Sweden’s epidemiologists, recently said that Sweden had achieved similar health outcomes to the UK without locking down its economy.  

The blog post then assesses the economic outcomes of Sweden’s corona strategy. In relative terms, Sweden’s economy is holding up better, a point that the IMF made this week. As Sweden went into the shutdown in relatively strong economic shape, even though 1Q20 was a shock, the final GDP growth result was still positive in the first quarter (0.1% up from the preliminary figure of -0.3% stated in the blog). High-frequency economic data such as that from Google and credit card transactions demonstrate that Sweden also has higher economic activity than many other countries in 2Q20, and consequently it could be expected that second quarter GDP will not be as bad as in other countries. However, we underline that there is a balance between domestic economic activity which is less affected by a more flexible shutdown than a hard lockdown and exports, which are primarily determined by the economic performance in destination markets. As Sweden’s economy has a very high share of exports it is more exposed, which could mean that 2Q20 (and 3Q20) is very weak.

Longer term, we believe that macro-economic decisions now being taken by the EU – the European Green Deal and a push towards a more digital an innovative Europe – are likely to be very positive for Sweden’s economy, as we explore in a separate post in the Mundus Blog.

In the June edition of the Monthly Policy Review

Corona is no longer the only show in town, with a number of other major policy decisions now forcing their way onto the agenda. Our first story, Next Generation EU looks at the Commission’s proposed pandemic recovery financing plan. Although the context is in response to the corona crisis, the issues were defined well in advance. Sweden is resisting demands for more of its cash, and has formed an alliance with the Frugal Four – Netherlands, Austria and Denmark – seeking to avoid giving grants or taking on large loan liabilities from southern countries.


➢ Mundus is currently monitoring Swedish media for EU budget stories. If you would like to receive complimentary daily newsletters with the stories contact sean@mundus-international.com


Stefan Löfven faces another political fight over Swedish Labour Law – our second story. The issue, one of the most critical parts of the negotiations in the January Agreement, surges to prominence with the report by a special investigator into how redundancies can be made. Löfven agreed to make changes, and has little wiggle room under the January Agreement. But the unions are against the proposals, and are currently negotiating with employees to see if they can come up with a more preferred scheme. If that fails, a massive fight is likely, with the potential to unseat the Löfven government.

Our third story takes a closer look at Gothenburg, Sweden’s major port and home to much of its vehicle industry. The city has had a rollercoaster existence. Left in tatters after the Financial Crisis it rebounded shortly afterwards by embracing change. Where is its future leading?

The final story, The pandemic and the Threat to the Defence Agreement, looks at the politics surrounding Sweden’s buildup of its defences. Even if all parties seemed to be in agreement about the needs for defence, prioritisation of funding remains a major sticking point.

In the latest Finland Monthly Brief

The Finland Monthly Brief begins with a brief review of policy news. We report on the economy, Finland’s reopening and the news that Finland’s universities are world-leaders in delivering value for money. Our first in-depth story, Nuclear power as part of Finnish energy solution, looks at the political future for nuclear power in Finland. Finland’s nuclear industry retains popular appeal and the government hopes to build new reactors as part of the country’s economic greening. Our second story, The success behind Finland’s education system, looks at Finland’s outstanding PISA results, and how the government has attempted to build both a national brand and an export industry out of it.

Sean is responsible for Mundus’ strategy and commercial activities. He began his career in the oil industry Australia. After working internationally in commercial roles with BP in South Africa, the UK and Singapore he moved to Sweden with his family in 2009. He worked in business development and then as the Strategy and Growth Director for NASDAQ Commodities from 2009 to 2015. Sean holds an engineering degree from Adelaide University and an MBA from the Darden Business School at the University of Virginia.