11. The Policy Watch

The Policy Watch is a weekly update which aims to provide concise insights into the current policy landscape. Tailored for our members and individuals interested in international affairs, this update offers a brief yet comprehensive summary of key developments affecting policy decisions and political trends in the UK, Sweden, and the EU.

GOVERNMENT PRESENT ITS SPRING BUDGET

On Wednesday, The Chancellor of the Exchequer, Jeremy Hunt, presented the UK Government’s Spring Budget to the Parliament. The Budget focuses on the various economic challenges the UK is facing, and the implementation of policies outlined in its 2023 goals, such as reducing inflation, bolstering growth, and decreasing debt. A summary on our website has more.

ZALUSHNY SET TO BECOME NEW UKRAINIAN AMBASSADOR TO THE UK

The former Ukrainian Commander-in-Chief, Valery Zaluzhny, is set to become Kyiv’s new ambassador to the UK, as a formal request of approval has been sent to the UK Government. Ukrainian President Zelenskyy stated that he and Zaluzhny have spoken on a potential diplomatic posting following the controversial removal of Zaluzhny as the top military commander.

SWEDEN IS THE 32ND MEMBER OF NATO

Sweden is now formally a member of NATO, as Prime Minister Ulf Kristersson handed over the Swedish accession documents to U.S. Secretary of State Antony Blinken in Washington on Thursday.

The Swedish Flag was raised at the NATO HQ in Brussels and at NATO commands during a Ceremony in Brussels on Monday, 11 March.

GOVERNMENT ALLOCATES £6 BILLION TO HEALTHCARE AMID ECONOMIC CHALLENGES

In response to the deteriorating economic outlook for regional healthcare, the governing parties and the Sweden Democrats have announced an additional 6 billion SEK in financial aid to prevent widespread layoffs in the healthcare sector and safeguard patients from the temporary economic strain on regions.

The funds, directed specifically towards health services, come as part of a comprehensive effort by the government to address inflationary pressures and increased pension costs affecting the regions’ finances. The initiative also includes the establishment of an efficiency delegation, a regional audit function, and intensified efforts to create a national healthcare referral system, aiming to enhance the overall effectiveness and accessibility of the healthcare system.

SWEDEN’S EU DEFORESTATION COMPLIANCE RISKS EU COURT ACTION

Director General for The Swedish Forest Agency Herman Sundqvist warns that Sweden could end up in the EU Court of Justice if it doesn’t properly enforce the new EU Deforestation Regulation. The Swedish Forest Agency, responsible for preventing Swedish trade with deforestation-contributing goods, is seeking a budget increase over three years to handle the increased workload following the introduction of the new EU Law.

Without adequate resources, Sundqvist warns of negative impacts on confidence in Swedish forestry and challenges in supervisory tasks, especially concerning species protection and intensive supervision.

GREEN ENERGY GRIDLOCK: SWEDISH SOLAR PROJECTS STALLED BY BUREAUCRATIC HURDLES

Planned solar parks in Sweden, with an electricity output equivalent to two nuclear reactors, await approval from county administrations, raising concerns among investors about the viability of their plans, according to DI. Despite Sweden’s reputation for green energy initiatives, the sluggish administrative processes in southern Sweden are hindering progress. The review of permit applications reveals that while 451 facilities received approval since 2019, projects with higher production potential are frequently rejected, resulting in 364 pending notifications at the start of the year, anticipating an electricity production of 11.8 TWh.

SWEDISH COMPANIES EMBRACE “RESHORING” TREND AMID GLOBAL SUPPLY CHAIN SHAKE-UP

Di delves into Sweden’s adoption of “reshoring”, a growing trend where businesses relocate production from abroad back to Sweden, sparked by pandemic-induced disruptions in global supply chains. Professor Jan Olhagen from Lund University highlights risk management, shorter supply routes, automatisation, and sustainability as key drivers behind this strategic shift in production logistics. A study reveals that over half of Swedish companies that previously outsourced production abroad between 2010-2015 have since returned part of their operations to Sweden, citing supply chain interruptions and enhanced flexibility as significant factors in their decision-making.

COMMISSION UNVEILS NEW EUROPEAN DEFENCE INDUSTRIAL PACKAGE

The European Commission and the High Representative introduced on Tuesday the European Defence Industrial Strategy (EDIS) today, alongside a legislative proposal for a comprehensive European Defence Industry Programme (EDIP) to bolster the competitiveness and preparedness of the EU’s defence sector.

In response to Russia’s ongoing aggression against Ukraine, the EDIS sets out a clear vision for long-term industrial readiness in the EU, urging Member States to invest collectively and support a more efficient defence procurement process. The EDIP, with a budget of €1.5 billion over 2025-2027, will support these efforts through financial incentives and regulatory frameworks to bolster Europe’s defence capabilities and industrial cooperation.

TRILOUGE REACH PROVISIONAL AGREEMENTS ON CYBER SECURITY

The Council and the Parliament reached provisional agreements on two pieces of new cybersecurity legislation, The Cyber Solidarity Act and amendments to the Cybersecurity Act. The Cyber Solidarity Act aims to bolster Europe’s resilience against cyber threats through mechanisms like a pan-European cyber security alert system and a cybersecurity emergency mechanism.

The amendments to the 2019 Cybersecurity Act focus on enabling European certification schemes for managed security services to enhance cyber resilience. The provisional agreement clarifies definitions, aligns security objectives, and includes modifications to ensure conformity assessment bodies meet specified requirements, emphasising timely consultation and regular briefings to co-legislators.

PROVISIONAL AGREEMENT REACHED ON BANNING FORCED LABOUR PRODUCTS

The Council and the European Parliament have reached a provisional agreement on the regulation on prohibiting products made with forced labour on the Union market. This deal supports the proposal’s main objective but introduces substantial modifications clarifying the Commission’s and national authorities’ roles in the investigation and decision-making process.