Swedish bosses urge Europe not to waste opportunity from Covid-19

Europe’s leaders must use coronavirus to make the continent’s economy more sustainable and accelerate investments in much-needed technology, according to the heads of two of Sweden’s biggest companies.

The chief executives of Volvo Group and Swedbank told the Financial Times that, as policymakers grapple with how to reopen economies across Europe, they need to think about how best to use stimulus packages to achieve the future they want.

Jens Henriksson, chief executive of lender Swedbank, invoked the advice made by Rahm Emanuel, former chief of staff to US president Barack Obama, during the 2008 financial crash that “you never let a serious crisis go to waste”. Mr Henriksson said: “Let’s try to use it [the present crisis] to take a step forward . . . How can you now use the kick-start of the global economy to make sure it becomes a much more sustainable economy?”

Martin Lundstedt, chief executive of truckmaker Volvo, said in a separate interview: “As we go along, there has to be a move towards stimulus and confidence-building . . . For example, 5G [telecoms networks] — we know it’s a no-brainer, that Europe needs it to build a more competitive position. Why don’t we accelerate it?”

Authorities across Europe are struggling to plot a return to normal after locking down their economies to combat the Covid-19 pandemic. There is a growing worry among environmentalists and some business leaders that, in the rush to recover from the economic slowdown caused by coronavirus, governments may be prepared to scale back green measures.

Sweden is one of the few countries not to have had a strict lockdown although its more limited restrictions have still hit business hard with Volvo, for instance, closing all its factories worldwide for several weeks.

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Mr Lundstedt said the debate must not become about “health and safety versus finance and the economy”, as the former must always take precedence. But he added that it was important for leaders in all sectors to show what is coming next.

“We need to continue to keep our eyes on the ball as to what is important. There are some very important challenges in the long term that can serve as a way out,” he said, pointing to solutions such as more sustainable transport, renewable energy, and a permanent recycling infrastructure.

Volvo has gradually started reopening its factories and is testing out how the “very complex and in-depth value chains” in the automotive sector respond. Mr Lundstedt said that, after the initial test phase, the discussion “will rather quickly become about what demand will be” in each country and adapting manufacturing to fit that.

Mr Henriksson said that after a banking crisis in the 1990s — when he worked in Sweden’s finance ministry — the country used the opportunity to enact structural reforms and current leaders should consider emulating that ambition. He added that he was worried that measures would merely make the rich and educated better off while the “poor and uneducated will be left behind”.

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