Closed borders trigger unemployment in Sweden

In Strömstad, one of the most attractive cities along the Swedish west coast, large shops and streets are empty.

“This is like a Greek island in November,” says Kent Hansson, chairman of the municipal council (Social Democrats).

He is deeply worried about how the city is affected by the pandemic and the closed border with Norway. The place is usually crammed with shoppers and overnight tourists from Easter to autumn, and most of them come from Norway. 

The big supermarkets’ usual annual turnover is 7.5 to 8 billion Swedish kronor (€700m - €760m). Now they are empty and their takings are down by more than 95%. Hotels and campsites are hit too. In a normal year, Strömstad’s hotels and campsites host 800,000 travellers each year, but so far this year they have been largely empty.

Everyone in Strömstad – from the shrimp fisher to the hotel receptionist – is hit by the fact that the border between Norway and Sweden remains closed. Photo: Strömstad municipality.

“We are among those who have been the hardest hit by the closed borders. Trade and tourism are our most important income streams, and they are now both blocked,” he says.

This has had a severe impact on the labour market. Between 30% and 35% of the city’s working-age people have been furloughed or let go.

“Businesses are desperate and if the border remains closed all summer many will fail. Many of them rely on the summer for their entire annual income,” says Kent Hansson.

Cooperation between border municipalities

When the Scandinavian and Finnish borders were closed, the border municipalities lost in an instant what had for decades been a common market for both goods and labour. One of these areas is Årjäng in Värmland County. 

“Much of our labour market is hit by the fact that cross-border trade has ceased to exist. This is like a town losing a major company, like the Stora Enso sawmill in Gruvön,” says Daniel Schützer, the Social Democrat chairman of the Årjäng municipal council.

Daniel Schützer, chairman of the Årjäng municipal council, has got attention from the other side of the border – he wants to take Norway to court for maintaining its quarantine rules for Norwegians who have visited Sweden.

Politicians in the worst hit municipalities have different ways of helping businesses. Municipalities have eased, or postponed, municipal fees. They have lobbied their governors to bring the issue of closed borders up to a higher level in the Nordic cooperation.    

They have worked with political colleagues on the other side of the closed borders and with each other. The chairs of municipalities in Eda, Strömstad and Årjäng, for instance, wrote to the government coordinator in late April to ask for cash support for struggling businesses. They also appealed for the reopening of the borders.

“I hope we at least can get a regional reopening. After all, there is no more Covid-19 here than on the other side of the border,” says Daniel Schützer. 

Årjäng is in western Värmland and has seen people and goods flow across the border for centuries. 18.7% of workers in Årjäng municipality commute to Norway. Many of them work in the health and care sectors and in construction, and many have been able to continue their work on the other side of the border thanks to special work permits. They are, however, under strict instruction to go directly to their workplace and not stop anywhere during their commute. 

The border is a line on the map

The large shops near the border, which usually see many thousands of Norwegians travel to Sweden to shop, are now closed like those in Strömstad. Many employees have been furloughed. Many of the municipality’s other businesses are also aimed at and dependent on Norwegian customers, for instance car garages.

"Sweets" was one of the answers Norwegian radio P4 got when asking people what they associated with Sweden. Above, a sweet shop in the Töcksfors shopping centre.

Årjäng is not far from Karlstad and also close to the Oslo region. Along with other municipalities along the border, it usually has access to a multi-million people market. Daniel Schützer calls the area culturally united and says the border is no more than a line on the map. 

This all changed when the pandemic closed the border between Norway and Sweden. In an instance, the conditions for work, trade and business completely changed. The Swedish Trade Association says many of the shops along the 1,600 kilometres long border between Sweden and Norway have lost 80% to 95% of their turnover.

“The closing of the border became a border obstacle of gigantic proportions, especially for the shopping centres near the border, which emptied out from day one. The larger shop owners will probably manage to recoup their losses somewhere else. It is harder for the smaller companies that are also dependent on Norwegians. Their life’s work is at risk,” he says.

Critical to the closure of job centre

Unemployment has risen, but so far not dramatically in Årjäng due to a diversified business community. Unemployment there has risen by 1.3% to 6.3% on last year, yet Daniel Schützer is worried about the figures for the month of May. The fact that the local job centre has been closed does not help matters.

“I am very critical of the politicians who made that decision. In the long run, this will have consequences for those who are furthest from the labour market and for those who struggle to travel to places that still have an open job centre.”

Årjäng municipality has, like many other border municipalities, introduced a range of measures to support local businesses. They have suspended water and waste payments, scrapped planning permission fees to stimulate construction and have given local companies advantages during procurement processes. Money has also been set aside to create summer jobs for students.

A Strömstad that is safe to visit

Measures are also introduced to make Strömstad a safe place to visit. "Corona guards" are being employed to make sure safe distances are kept in all areas where people gather. Extra cleaning and hygiene measures are being introduced as well. 

“We want to show that we take the fear of infection very seriously, even though we hardly have any infection here,” says Kent Hansson.