Sweden’s Left Party Calls for New Riksbank Employment Target

Sweden’s Left Party wants the Riksbank to broaden its target to include employment when it sets interest rates.

The party, which supports the opposition Social Democrats leading in most polls ahead of September elections, also advocated for looser budget rules to cut joblessness in the largest Nordic economy.

The jobs objective should complement the bank’s 2 percent inflation target, Jonas Sjoestedt, leader of the Left Party, told reporters today in Stockholm. The party will also move to scrap the 1 percent budget surplus target and aim for balanced budget rules, he said.

“With our policies we would get higher investments, we would get bigger investments, we would get higher employment and still have very stable public finances,” he said. “We’re certain that there will be a discussion after the election.”

The Left Party is part of a three-party opposition that polls suggest will unseat the ruling Conservative-led government in elections in September. Sjoestedt, 49, said he would seek to form a coalition with the larger Social Democrat and Green parties.

The Left Party, formerly communist, will only support a Social Democratic government if it bans private companies that use public funds to supply welfare services from pocketing profits, Sjoestedt said. We “won’t help a government that we’re not a part of, but we will, of course, neither pave the way for a government with Fredrik Reinfeldt,” he said.

Welfare Goals

Prime Minister Reinfeldt’s four-party minority government is trailing with support from just 38.2 percent of voters, compared with 51.5 percent for the three-party opposition, according to a March poll by Ipsos for Dagens Nyheter. The Sweden Democrats, shunned by all other parties because of its restrictive views on immigration, had backing from 7.8 percent.

The Left is seen advancing to 7.6 percent in the poll from 5.6 percent in the 2010 elections. The party is pushing for tax increases on banks and on those with the highest salaries. It plans to use the extra revenue to raise spending on welfare and education.

The government is heading for defeat as unemployment remains above 8 percent. It was below 7 percent when Reinfeldt took power in 2006 after promising to cut unemployment.

The central bank has also been criticized for not doing enough to lower unemployment and focusing instead of private debt growth.

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