To finance its military spending, Sweden will tax its banks
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With the intensification of Russian military activities in its immediate environment, Sweden has relaunched its defense effort.
Thus, this country has restored military service, remilitarized the island of Götland, took over the defense industry, returned to military exercises and brought up to date its concept of total defense.
At the same time, the debate on whether to join NATO has gained momentum in the country. But, for the moment, Stockholm has especially strengthened its military cooperation with its neighbors and has created others, particularly with the United Kingdom and the United States. And Sweden will soon join the European Initiative Initiative [IEI] launched by France to develop a European strategic culture.
Obviously, this policy is accompanied by an increase in the budget allocated to the Swedish armed forces. And there is talk of increasing the latter by 5 billion crowns [463 million euros] by 2022 and another 5 billion a year between 2022 and 2025.
To finance this effort, the Swedish government had an idea, which could be emulated elsewhere in Europe: taxing banks.
“Banks must now participate in strengthening the country’s defense capabilities,” said Swedish Defense Minister Peter Hultqvist at a press conference.
His finance counterpart, Magdalena Andersson, explained that a bank tax would be put in place. “Banks make big profits and can contribute more than they do now,” she said. “It is reasonable for banks to participate and pay because the financial sector can cause serious damage to the economy. We saw this in 2008,” she added.
Some economists explain, as Gunther Capelle-Blancard did in the columns of Challenges in 2013, that a “hypertrophied financial sector no longer contributes to growth” because “it exposes to crises whose economic and social consequences are heavy.”
Moreover, apart from the bankers, no one should oppose this tax. At least, this is what the two ministers affirmed, who felt that “the public opinion is in favor of greater taxation of the financial sector. Regulating the financial sector while financing an important budgetary effort for the armed forces makes sense.”