EU budget: Sweden, part of the 'frugal' camp, is about to turn even more hawkish

The leader of Sweden's Social Democratic Party, Magdalena Andersson, is set to become the country's next prime minister. But her centre-left credentials won't make her any less of a "frugal" hardliner in the upcoming EU budget negotiations.

The Swedish Social Democratic Party (S) is on course to win the 13 September election, currently polling at 32%, well ahead of the national-conservative Sweden Democrats on 20% and the centre-right Moderate Party of current Prime Minister Ulf Kristersson on 17%, according to the latest data.

That would make Sweden one of the few EU countries turning towards a progressive government, as centre-left executives now remain only in Spain, Denmark and Malta, with electoral trends elsewhere in Europe generally favouring the radical right.

But anyone expecting Stockholm's next government to soften its stance in the EU's sensitive long-term budget talks will be disappointed, as Andersson's administration is shaping up to be even more hawkish than the current one.

"The next Swedish government is likely to be much tougher," a Swedish official told Euronews, speaking on condition of anonymity as they were not authorised to comment publicly. "During the parliamentary hearings they always ask why the current government is not doing more to oppose the budget proposal."

Sweden belongs to the so-called "frugal" bloc, alongside Germany and the Netherlands — net contributors that pay far more into the EU budget than they get back.

Stockholm has been particularly hostile to the scale of the European Commission's €2 trillion proposal, even in the reduced form put forward by the Cypriot presidency, and is pushing to keep the overall budget down to limit the impact on Swedish taxpayers.

Swedish officials estimate the Commission's original proposal would increase the country's contribution by around 60%, just as public finances are already strained by surging defence spending and military aid to Ukraine.

At a March hearing of the Committee on EU Affairs, Social Democrat MP Matilda Ernkrans said the current government had depleted the country's finances, severely limiting the scope for reform in the next mandate.

"Against this background, an increase in the EU fee of the magnitude now being discussed is completely unacceptable," she said, pointing in particular to the need to maintain the so-called rebate: a discount Sweden secured in the previous budget negotiations.

Andersson served as Sweden's finance minister from 2014 to 2021 — spanning the negotiations of the previous seven-year budget — when she personally secured an annual rebate of more than €1bn, one she now appears determined to preserve.

"The Social Democrats are focused on domestic policies and do not want to sacrifice their social agenda to Brussels," the Swedish official said, adding that some form of rebate will likely be necessary to reach a final agreement.

This push to shrink the EU budget in order to protect fiscal space for domestic social policy puts Sweden's Social Democrats at odds with their centre-left peers in the Socialists and Democrats (S&D) group in the European Parliament, where they are regularly sidelined in budget discussions.

The S&D has also backed extending common borrowing at EU level, following the model of NextGenerationEU, Europe's post-pandemic recovery fund. Andersson, by contrast, initially opposed the scheme while in office, even though her government ultimately signed up to it.

On EU-level debt more broadly, her position has shifted: she has backed joint borrowing to build up Europe's defence and support Ukraine militarily, arguing "this needs to happen at a furious pace and all countries must do it, even those with worse economic conditions," as she said in 2025.

Still, Stockholm is set to remain wary of EU-level borrowing, since the interest rates involved are higher than Sweden's own borrowing costs — making it economically unattractive.

"Sweden has long adhered to the mantra of being 'the most frugal in Europe'. This negotiating position yielded particularly good results in the negotiations on the EU's joint pandemic recovery fund," reads an S-sponsored report on the EU budget.

"Sweden succeeded in limiting the level of grants to member states, securing a Swedish rebate of around 11 billion Swedish krona per year and establishing a conditionality mechanism based on the principles of the rule of law," the report continues.

Finally, the future Swedish government is unlikely to shift the country's sceptical stance towards EU "own resources" — Europe-wide taxes to directly finance Brussels — with the report noting "there is a traditionally critical attitude on the part of Sweden towards the introduction of new own resources."

Reporting from euronews contributed to this story.