1 00:00:00,920 --> 00:00:19,880 Speaker 1: Hello, Hello, and welcome to Stephanomics, the podcast that brings 2 00:00:19,960 --> 00:00:23,400 Speaker 1: the COVID global economy to you. And the sound you 3 00:00:23,520 --> 00:00:26,400 Speaker 1: just heard was the sound of lockdown lifting. In Madrid, 4 00:00:27,440 --> 00:00:29,840 Speaker 1: Spain had one of the toughest lockdowns in Europe. A 5 00:00:29,840 --> 00:00:31,760 Speaker 1: friend of mine tried to take a walk in week 6 00:00:31,800 --> 00:00:35,040 Speaker 1: one without a dog. She was quickly escorted home by 7 00:00:35,080 --> 00:00:39,080 Speaker 1: a shouty police drone. Now the restrictions are starting to 8 00:00:39,080 --> 00:00:41,159 Speaker 1: be lifted, and we have a great report for you 9 00:00:41,200 --> 00:00:44,560 Speaker 1: from our Spanish economy reporter Janette Newman as she reunites 10 00:00:44,600 --> 00:00:47,320 Speaker 1: with friends and finds out whether her local restaurants can 11 00:00:47,360 --> 00:00:50,120 Speaker 1: possibly stay in business serving a fraction of the usual 12 00:00:50,200 --> 00:00:54,520 Speaker 1: number of customers at tables two ms apart. We're also 13 00:00:54,560 --> 00:00:57,320 Speaker 1: going to hear from our Nordic economist Johanna Jeanson in 14 00:00:57,400 --> 00:01:00,880 Speaker 1: Stockholm about the very different approach that Sweden has taken 15 00:01:00,920 --> 00:01:05,160 Speaker 1: to COVID nineteen. This week, the main architect of Sweden's 16 00:01:05,280 --> 00:01:08,959 Speaker 1: lighter lockdown policy admitted the death toll in his country 17 00:01:08,959 --> 00:01:11,600 Speaker 1: had been too high. If he were facing the same 18 00:01:11,640 --> 00:01:14,840 Speaker 1: crisis today, he told Swedish radio he would take a 19 00:01:14,880 --> 00:01:19,160 Speaker 1: tougher line, whether it was right or wrong. Johanna says 20 00:01:19,240 --> 00:01:21,840 Speaker 1: it's not true that Sweden acted as it did to 21 00:01:21,959 --> 00:01:25,240 Speaker 1: protect its domestic economy. You can decide what you think 22 00:01:25,600 --> 00:01:28,959 Speaker 1: in a few minutes, but first, here's Jeannette with the 23 00:01:29,000 --> 00:01:33,080 Speaker 1: sound of Madrid reopening, and please do not adjust your set. 24 00:01:46,959 --> 00:01:50,560 Speaker 1: I cursed that sound every morning for about six years, 25 00:01:51,280 --> 00:01:54,400 Speaker 1: a nearby shop owner rolling up the metal shutters covering 26 00:01:54,440 --> 00:01:59,280 Speaker 1: his storefront a screeching start to every day. But for 27 00:01:59,360 --> 00:02:01,360 Speaker 1: two months or in the confinement in the center of 28 00:02:01,400 --> 00:02:05,600 Speaker 1: Madrid where I live, the mornings were silent, so we're 29 00:02:05,640 --> 00:02:10,799 Speaker 1: the afternoons and evenings. The screeching started again about two 30 00:02:10,800 --> 00:02:15,200 Speaker 1: weeks ago. The sound still grates on me, but I 31 00:02:15,240 --> 00:02:16,880 Speaker 1: have a bit of a soft spot for it. Now 32 00:02:18,440 --> 00:02:21,200 Speaker 1: it's become a daily reminder that the city and the 33 00:02:21,240 --> 00:02:30,400 Speaker 1: broader Spanish economy are coming back to life. Spain's government 34 00:02:30,480 --> 00:02:35,160 Speaker 1: is gradually lifting one of Europe's strictest lockdowns in four stages, 35 00:02:35,480 --> 00:02:39,680 Speaker 1: province by province, and in fourteen day increments. It's as 36 00:02:39,720 --> 00:02:42,040 Speaker 1: if those of us living in Spain had been forced 37 00:02:42,040 --> 00:02:44,520 Speaker 1: to go on a fast for two months, and now 38 00:02:44,560 --> 00:02:49,359 Speaker 1: we're slowly reintroducing some of life's pleasures. First, a bicycle 39 00:02:49,480 --> 00:02:53,920 Speaker 1: ride outside, then visits with friends and family, eating and 40 00:02:53,960 --> 00:02:58,799 Speaker 1: dining out. Eventually travel in Madrid were in the second 41 00:02:58,800 --> 00:03:02,520 Speaker 1: week of what's known as AS one. Most noticeably, that 42 00:03:02,560 --> 00:03:05,400 Speaker 1: means madri Lanos have been allowed to drink and dine 43 00:03:05,440 --> 00:03:09,080 Speaker 1: outside at bars and restaurants the first time since mid March. 44 00:03:10,120 --> 00:03:18,919 Speaker 1: The sounds of the city are slowly returning. That's this 45 00:03:19,040 --> 00:03:23,240 Speaker 1: Sunday before we entered Phase one. It's PM on the 46 00:03:23,280 --> 00:03:27,440 Speaker 1: Plasa Santana, a square in central Madrid. And this is 47 00:03:27,480 --> 00:03:30,240 Speaker 1: the next night in the same spot at the same time, 48 00:03:30,840 --> 00:03:35,200 Speaker 1: but now with outdoor seating on the terraces at fifty papacity. 49 00:03:39,920 --> 00:03:42,120 Speaker 1: We're also allowed to gather with up to ten people 50 00:03:42,160 --> 00:03:45,080 Speaker 1: at home. That's meant reunions with friends for the first 51 00:03:45,120 --> 00:03:48,560 Speaker 1: time in months. I visited friends for dinner on Friday, 52 00:03:48,840 --> 00:03:56,640 Speaker 1: our first gathering since March. Hello, Hello, I get that 53 00:03:59,280 --> 00:04:02,000 Speaker 1: the shared meills have been a welcome respite after the 54 00:04:02,040 --> 00:04:15,400 Speaker 1: long confinement. This is a celebration. The overpowering feeling, though, 55 00:04:15,840 --> 00:04:19,719 Speaker 1: is one of whiplash. Spain is a national mourning for 56 00:04:19,760 --> 00:04:22,560 Speaker 1: the more than twenty seven thousand people who have died 57 00:04:22,640 --> 00:04:26,000 Speaker 1: during the pandemic, and the country along with the rest 58 00:04:26,000 --> 00:04:29,320 Speaker 1: of the world is emerging into the most severe downturn 59 00:04:29,520 --> 00:04:34,000 Speaker 1: in living memory. Bloomberg Economics expects Spain and Italy to 60 00:04:34,080 --> 00:04:36,599 Speaker 1: be among the hardest hit countries in the world this year, 61 00:04:36,920 --> 00:04:42,960 Speaker 1: suffering economic contractions of eleven and respectively. That's fueled anger 62 00:04:43,000 --> 00:04:46,560 Speaker 1: and despair. Some in Spain have channeled their frustration into 63 00:04:46,560 --> 00:04:50,280 Speaker 1: a nightly cacophony that's known as a castro lada. That's 64 00:04:50,279 --> 00:04:53,240 Speaker 1: the banging together of pots and pans, a common form 65 00:04:53,240 --> 00:04:56,560 Speaker 1: of protest here. Every night for the past several weeks, 66 00:04:56,760 --> 00:04:59,880 Speaker 1: people have been making noise from their windows, balconies and 67 00:05:00,040 --> 00:05:04,400 Speaker 1: local plus us at nine pm. They're demonstrating against Spain's government, 68 00:05:04,560 --> 00:05:07,480 Speaker 1: a coalition between the center left Socialists and the far 69 00:05:07,560 --> 00:05:20,120 Speaker 1: left PODE. Most party protesters say the government responded slowly 70 00:05:20,160 --> 00:05:22,880 Speaker 1: to the onset of the pandemic and that the emergency 71 00:05:22,880 --> 00:05:26,919 Speaker 1: economic measures have been too little, too late. Now that 72 00:05:26,960 --> 00:05:29,680 Speaker 1: we're allowed to gather with friends, many people seem to 73 00:05:29,680 --> 00:05:32,520 Speaker 1: prefer to be outside their homes in the evening, So 74 00:05:32,560 --> 00:05:35,600 Speaker 1: the intensity of the castro ladas has eased in recent days, 75 00:05:36,200 --> 00:05:44,039 Speaker 1: but the frustrations and worries haven't. I have like a 76 00:05:44,120 --> 00:05:47,839 Speaker 1: hundred messages that I have to tell. It's like two 77 00:05:47,880 --> 00:05:52,320 Speaker 1: hours and then it's like it's better enough. Ophelia Marine 78 00:05:52,480 --> 00:05:55,200 Speaker 1: opened three of her seven restaurants in Madrid last week. 79 00:05:55,720 --> 00:05:58,839 Speaker 1: At this stage, only outdoor seating is allowed, and only 80 00:05:58,880 --> 00:06:03,040 Speaker 1: at fifty capath city. She says the authorities are focusing 81 00:06:03,120 --> 00:06:06,440 Speaker 1: too much on the minutia. They're missing the existential threat 82 00:06:06,560 --> 00:06:10,200 Speaker 1: facing many of Madrid's restaurants and bars. We spoke at 83 00:06:10,240 --> 00:06:14,560 Speaker 1: one of her restaurants, Lamul Cartman. In one of the locations, 84 00:06:14,600 --> 00:06:19,880 Speaker 1: we had um twenty three tables. Okay, so now you 85 00:06:19,960 --> 00:06:24,640 Speaker 1: have two cuts by half, twenty three by half, it's 86 00:06:24,680 --> 00:06:27,880 Speaker 1: eleven and a half. So okay, we said we're gonna 87 00:06:27,880 --> 00:06:32,520 Speaker 1: put twelve. You know, it's a big exactly, it's a 88 00:06:32,520 --> 00:06:36,839 Speaker 1: big platfor we have space, it's beautiful. Not many cars, 89 00:06:36,880 --> 00:06:40,440 Speaker 1: not many people. So the police comes and they removed 90 00:06:40,720 --> 00:06:43,720 Speaker 1: one of them. So they had they had definitely counted 91 00:06:43,800 --> 00:06:47,960 Speaker 1: exactly how many. Yes, yes, but doesn't make any sense 92 00:06:48,040 --> 00:06:53,360 Speaker 1: for who what good that makes. Spain also requires restaurants 93 00:06:53,400 --> 00:06:57,159 Speaker 1: to keep tables a socially distanced two apart that's about 94 00:06:57,160 --> 00:07:01,040 Speaker 1: six and a half feet. Ophelia says. The number seems arbitrary. 95 00:07:01,560 --> 00:07:05,120 Speaker 1: In France, social distances one meter. In Italy it's one 96 00:07:05,160 --> 00:07:07,720 Speaker 1: meter in some regions and one point eight in others. 97 00:07:07,880 --> 00:07:11,440 Speaker 1: In Germany one point five meters, the World Health Organization 98 00:07:11,640 --> 00:07:16,040 Speaker 1: says one. Spain's government says the restrictions on occupancy and 99 00:07:16,120 --> 00:07:19,760 Speaker 1: distance between patrons are necessary to ensure the country avoids 100 00:07:19,760 --> 00:07:24,400 Speaker 1: new outbreaks. Restaurant managers say they support safety measures, but 101 00:07:24,440 --> 00:07:27,400 Speaker 1: they say the current restrictions make it impossible to generate 102 00:07:27,480 --> 00:07:31,240 Speaker 1: enough revenue to cover the cost of reopening. That's one 103 00:07:31,280 --> 00:07:33,280 Speaker 1: of the reasons that more than two thirds of the 104 00:07:33,280 --> 00:07:35,640 Speaker 1: bars and restaurants in Madrid that are allowed to open 105 00:07:35,680 --> 00:07:42,520 Speaker 1: their outdoor terraces have remained shuttered. The average bar size 106 00:07:42,520 --> 00:07:45,480 Speaker 1: in Spain is around a hundred square meters roughly a 107 00:07:45,520 --> 00:07:49,960 Speaker 1: thousand square feet. The country's small, intimate eateries are part 108 00:07:50,040 --> 00:07:53,600 Speaker 1: of its Old World charm, but there are distinct disadvantage 109 00:07:53,680 --> 00:07:57,600 Speaker 1: in a socially distanced economy. Ophelia says she's worried that 110 00:07:57,640 --> 00:08:01,560 Speaker 1: even when Madrid's restaurants can start serving inside, revenue will 111 00:08:01,560 --> 00:08:04,240 Speaker 1: still suffer social distance. I think it's going to be 112 00:08:05,040 --> 00:08:10,600 Speaker 1: till you know phase three four. Who knows but social distance. 113 00:08:10,680 --> 00:08:13,960 Speaker 1: I think it's gonna stay for a while and which 114 00:08:14,000 --> 00:08:17,200 Speaker 1: that kills us. One option would be to step up 115 00:08:17,240 --> 00:08:20,200 Speaker 1: online food deliveries, but that's not as common in Spain 116 00:08:20,240 --> 00:08:23,320 Speaker 1: as in some other countries. Some restaurants have tried to 117 00:08:23,320 --> 00:08:26,480 Speaker 1: pivot quickly to eat commerce, only to realize the commissions 118 00:08:26,520 --> 00:08:30,760 Speaker 1: on existing platforms can be as much as thirty That's 119 00:08:30,880 --> 00:08:34,200 Speaker 1: untenable in an industry where margins are on average around 120 00:08:41,000 --> 00:08:44,120 Speaker 1: Madrid's Restaurant Association estimates that one in ten of the 121 00:08:44,160 --> 00:08:47,600 Speaker 1: city's twenty bars and restaurants could go under by the 122 00:08:47,679 --> 00:08:51,440 Speaker 1: end of the year. That's a big deal in Spain's economy. 123 00:08:52,080 --> 00:08:55,720 Speaker 1: Discretionary spending is a portion of economic output, meaning what 124 00:08:55,800 --> 00:08:59,520 Speaker 1: people spend on food, drink and other leisure activities, is 125 00:08:59,600 --> 00:09:03,320 Speaker 1: higher er than most other major economies. Also, restaurants and 126 00:09:03,320 --> 00:09:06,200 Speaker 1: bars employ more people in Spain than in any other 127 00:09:06,200 --> 00:09:10,240 Speaker 1: country in the European Union except Greece. That reflects, in 128 00:09:10,320 --> 00:09:13,440 Speaker 1: part the vital role tourism plays in the economy. Spain 129 00:09:13,520 --> 00:09:16,360 Speaker 1: was the second most visited country in the world last year. 130 00:09:17,320 --> 00:09:20,720 Speaker 1: Visitors are able to return starting in July, but hotel 131 00:09:20,760 --> 00:09:22,760 Speaker 1: managers say they don't expect to get back to the 132 00:09:22,800 --> 00:09:27,120 Speaker 1: glory days for at least several years. Spain's islands and 133 00:09:27,160 --> 00:09:31,640 Speaker 1: beachside resorts are already receiving reservations for the truncated summer season. 134 00:09:32,440 --> 00:09:35,480 Speaker 1: Many hotel managers in Madrid, though, say they're likely to 135 00:09:35,480 --> 00:09:38,959 Speaker 1: remain shuttered through September. They won't be able to fill 136 00:09:39,000 --> 00:09:42,439 Speaker 1: their rooms without the conferences and business meetings that normally 137 00:09:42,440 --> 00:09:46,240 Speaker 1: bring people in July and August. Juan Luis de Lucas 138 00:09:46,240 --> 00:09:49,560 Speaker 1: Martin is an exception. The Hotel claud Age that he 139 00:09:49,600 --> 00:09:53,760 Speaker 1: manages is among the few open in the city. Prince 140 00:09:53,840 --> 00:09:59,280 Speaker 1: has been okay, Occupancy has been well horrible. Spaniards still 141 00:09:59,320 --> 00:10:03,160 Speaker 1: aren't allowed to travel between provinces, with some exceptions. Those 142 00:10:03,200 --> 00:10:04,959 Speaker 1: who have booked rooms at the cloud Edge have come 143 00:10:05,000 --> 00:10:07,800 Speaker 1: to Madrid to see their doctors or lawyers, or in 144 00:10:07,840 --> 00:10:11,960 Speaker 1: some cases meet up with a loved one. I understand 145 00:10:11,960 --> 00:10:13,920 Speaker 1: all my colleagues. We have decided not to open until 146 00:10:13,960 --> 00:10:17,040 Speaker 1: September because there will be nothing we're opening. Nearly all 147 00:10:17,120 --> 00:10:19,240 Speaker 1: the adults in Madrid are closed, and our records on 148 00:10:19,280 --> 00:10:22,480 Speaker 1: the best day as Albin eighteen rooms booked. If Mortel 149 00:10:22,520 --> 00:10:26,760 Speaker 1: were open, it would be absolute disaster. Because there's no demand. 150 00:10:28,440 --> 00:10:31,840 Speaker 1: That's eighteen out of a hundred and fourteen total rooms. 151 00:10:32,600 --> 00:10:35,080 Speaker 1: A lot of workers in the restaurant and hotel sectors 152 00:10:35,120 --> 00:10:38,240 Speaker 1: are expected to lose their jobs this year. That's one 153 00:10:38,280 --> 00:10:41,120 Speaker 1: reason that Spain Central Bank expects the unemployment rate to 154 00:10:41,200 --> 00:10:45,880 Speaker 1: hit around from an already high fourteen percent before the pandemic. 155 00:10:52,040 --> 00:10:54,480 Speaker 1: The sudden loss of so many jobs has led the 156 00:10:54,520 --> 00:10:59,080 Speaker 1: long lines at food banks around Madrid. Yolanda Waters Barsonia 157 00:10:59,320 --> 00:11:01,680 Speaker 1: helps organize, is the one in her neighborhood of a Luche. 158 00:11:02,600 --> 00:11:06,440 Speaker 1: When the virus came then it was just disastrous. All 159 00:11:06,520 --> 00:11:11,600 Speaker 1: this very precarious and very unstable job was gone completely. 160 00:11:11,760 --> 00:11:16,480 Speaker 1: You land another volunteers feed around families each week. All 161 00:11:16,480 --> 00:11:18,960 Speaker 1: of a sudden, we had people coming in saying, you 162 00:11:19,040 --> 00:11:21,320 Speaker 1: know what, I have no job, I have nothing to eat, 163 00:11:21,840 --> 00:11:24,680 Speaker 1: no money to pay the rent, no money to nothing. 164 00:11:25,000 --> 00:11:27,720 Speaker 1: Many who show up worked as part time waiters, cleaning 165 00:11:27,760 --> 00:11:31,760 Speaker 1: homes or taking care of the elderly, but some neighbors 166 00:11:31,760 --> 00:11:33,959 Speaker 1: are too embarrassed to join the queue for the bags 167 00:11:34,000 --> 00:11:37,920 Speaker 1: of food. One day we saw somebody picking some fruit 168 00:11:38,000 --> 00:11:40,880 Speaker 1: from that that's been behind this fruit shop here, and 169 00:11:41,000 --> 00:11:43,280 Speaker 1: we told this man why don't you come, we have 170 00:11:43,400 --> 00:11:45,640 Speaker 1: so much food and said, no, my wife doesn't want 171 00:11:45,679 --> 00:11:47,680 Speaker 1: me to be there on the queue. We don't want 172 00:11:47,720 --> 00:11:50,160 Speaker 1: we we can we we live here all our life. 173 00:11:50,160 --> 00:11:53,160 Speaker 1: How can we be on that queue? So it's really humiliating, 174 00:11:53,440 --> 00:11:55,840 Speaker 1: really really. Some of the waiters and other workers have 175 00:11:55,920 --> 00:11:59,000 Speaker 1: been temporarily laid off, but they still haven't received their 176 00:11:59,000 --> 00:12:03,280 Speaker 1: furlough payments, so they can't pay their bills. Spain's furlough 177 00:12:03,280 --> 00:12:08,559 Speaker 1: and unemployment system has been overwhelmed during the crisis. As 178 00:12:08,600 --> 00:12:12,599 Speaker 1: the virus has slowed, it spread and Spain's economy slowly reopens, 179 00:12:13,080 --> 00:12:15,400 Speaker 1: Yolanda says the number of new people queuing at the 180 00:12:15,440 --> 00:12:19,559 Speaker 1: food bank has also slowed, but the future still remains 181 00:12:19,600 --> 00:12:24,320 Speaker 1: bleak for many. Ninfa Sanchez Diaz had been working thirty 182 00:12:24,360 --> 00:12:27,040 Speaker 1: hours a week taking care of elderly people in their homes. 183 00:12:27,840 --> 00:12:31,040 Speaker 1: Since the pandemic, she's been working half at and isn't 184 00:12:31,080 --> 00:12:34,640 Speaker 1: earning enough money to pay rent or feed her family. Well, 185 00:12:35,440 --> 00:12:39,400 Speaker 1: the future looks green if we have more quarant times 186 00:12:39,520 --> 00:12:44,120 Speaker 1: and with social distancing, and with the number of elderly 187 00:12:44,160 --> 00:12:47,480 Speaker 1: people who have died. I don't know what kind of 188 00:12:47,720 --> 00:12:52,400 Speaker 1: hiring or firing or jobs will be available. I don't 189 00:12:52,400 --> 00:12:56,439 Speaker 1: know what's going to happen. We'll live for today and tomorrow. 190 00:12:56,840 --> 00:13:01,800 Speaker 1: We'll see. Amid so many and certainties, one thing seems clear. 191 00:13:02,360 --> 00:13:05,400 Speaker 1: The V shaped recovery that economists had anticipated from many 192 00:13:05,440 --> 00:13:10,040 Speaker 1: countries now seems unlikely. In Spain and elsewhere. It will 193 00:13:10,080 --> 00:13:13,559 Speaker 1: be more of a slog than a snap back. Jeanette 194 00:13:13,559 --> 00:13:34,800 Speaker 1: Newman bloombergs so, Spain is one example of a European 195 00:13:34,880 --> 00:13:39,960 Speaker 1: country now starting to emerge from from lockdown. But of 196 00:13:39,960 --> 00:13:43,000 Speaker 1: course we know in Europe that Sweden has taken a 197 00:13:43,120 --> 00:13:45,120 Speaker 1: very different approach, and I thought it was about time 198 00:13:45,120 --> 00:13:48,800 Speaker 1: that Stephanomics found out a bit more about that from 199 00:13:48,800 --> 00:13:53,200 Speaker 1: our Nordic economist, Johannah Janson. Johannah, very nice to have 200 00:13:53,200 --> 00:13:56,480 Speaker 1: you back on Stephanomics. Tell us a bit about Sweden. 201 00:13:56,480 --> 00:13:58,120 Speaker 1: I mean, I think we are all familiar now with 202 00:13:58,160 --> 00:14:02,240 Speaker 1: the idea that Sweden has had a looser approach to 203 00:14:02,640 --> 00:14:06,320 Speaker 1: locking down the economy. That does seem to have helped 204 00:14:06,520 --> 00:14:09,760 Speaker 1: sustain economic growth, at least in the first few months 205 00:14:09,800 --> 00:14:11,960 Speaker 1: of the year. But how are things looking now, Yes, 206 00:14:12,040 --> 00:14:14,880 Speaker 1: that's right, I mean, it's it's it's really true that 207 00:14:14,880 --> 00:14:17,559 Speaker 1: Swede has had a different approach, and the main difference 208 00:14:17,600 --> 00:14:19,840 Speaker 1: I think is that a lot of the measures that 209 00:14:19,920 --> 00:14:23,280 Speaker 1: are that are imposed here are voluntary, and I think 210 00:14:23,320 --> 00:14:26,120 Speaker 1: that means that it may look a bit more lax 211 00:14:26,520 --> 00:14:30,160 Speaker 1: seen from the outside than what we are experiencing here. 212 00:14:30,480 --> 00:14:33,560 Speaker 1: But it is true that it is less strict than 213 00:14:33,720 --> 00:14:35,800 Speaker 1: than in most countries. If we look at, for example, 214 00:14:35,880 --> 00:14:41,920 Speaker 1: that stringency index that Oxford Oxford University has compiled. Uh 215 00:14:42,200 --> 00:14:46,600 Speaker 1: that index is around fifty in Sweden and it's eighty 216 00:14:46,640 --> 00:14:50,080 Speaker 1: in other European countries. So so for sure that's less strict. 217 00:14:50,440 --> 00:14:53,800 Speaker 1: And yes, you're right, Stephanie, it's been we've had less 218 00:14:53,800 --> 00:14:56,560 Speaker 1: of a hit to the economy in the first quarter, 219 00:14:56,600 --> 00:15:00,280 Speaker 1: when when most all the Nordics, Norway, Finland and also 220 00:15:00,320 --> 00:15:03,720 Speaker 1: the euro Area countries took a large hit somewhere down 221 00:15:03,760 --> 00:15:08,320 Speaker 1: to percent quardroom quarter, Sweden actually managed to eke out 222 00:15:09,120 --> 00:15:12,680 Speaker 1: point one percent growth. But but will we will take 223 00:15:12,680 --> 00:15:15,600 Speaker 1: a hit in the second quarter, I'm sure of that, 224 00:15:15,720 --> 00:15:21,600 Speaker 1: but it will probably be less less deep than we're 225 00:15:21,640 --> 00:15:26,000 Speaker 1: seeing in in other European countries. And just thinking about 226 00:15:26,000 --> 00:15:28,640 Speaker 1: global markets, I mean, we know that Sweden is a 227 00:15:28,800 --> 00:15:34,680 Speaker 1: very exposed economy, very involved in global trade, has been 228 00:15:34,720 --> 00:15:38,640 Speaker 1: affected by the downturn in the global economy. When you 229 00:15:38,720 --> 00:15:40,920 Speaker 1: look at these sort of high frequency things, are you 230 00:15:40,960 --> 00:15:44,840 Speaker 1: starting to see some some green shoots in terms of 231 00:15:44,840 --> 00:15:49,080 Speaker 1: the external activity or is it too soon? I think no, 232 00:15:49,320 --> 00:15:52,760 Speaker 1: not in terms of the external activity. Actually, if we 233 00:15:52,880 --> 00:15:55,840 Speaker 1: look at the when we look at those high frequency indicators, 234 00:15:55,880 --> 00:15:59,520 Speaker 1: it's mainly that they've turned for the better. Firstly in 235 00:15:59,640 --> 00:16:02,680 Speaker 1: terms of the number of new cases. We're seeing a 236 00:16:02,720 --> 00:16:07,880 Speaker 1: slight downturn there. Secondly in terms of mobility domestic mobility, 237 00:16:08,000 --> 00:16:11,880 Speaker 1: that people are daring to go to the store which 238 00:16:11,920 --> 00:16:14,480 Speaker 1: they didn't do before, or they they're starting to take 239 00:16:14,600 --> 00:16:19,240 Speaker 1: their car to work. Um, they're still not h taking 240 00:16:19,280 --> 00:16:21,400 Speaker 1: the subway, but they're taking their car to work. And 241 00:16:21,400 --> 00:16:26,080 Speaker 1: we're seeing less financial stress. So these are the main 242 00:16:26,160 --> 00:16:30,720 Speaker 1: three green shoots. But no, not in terms of external demand, 243 00:16:30,720 --> 00:16:33,680 Speaker 1: and I think those effects will linger for longer. If 244 00:16:33,720 --> 00:16:36,920 Speaker 1: we look at UM it's not high frequency indicators, but 245 00:16:37,000 --> 00:16:41,400 Speaker 1: it's relatively fast indecurations in terms of purchasing managers index 246 00:16:41,480 --> 00:16:45,160 Speaker 1: for for the export sector, for example, we're seeing small 247 00:16:45,200 --> 00:16:50,960 Speaker 1: fish hooks uh slight slight recovery, but quite an unimpressive 248 00:16:51,840 --> 00:16:55,920 Speaker 1: recovery in the last figures, So there's still a worsening 249 00:16:56,920 --> 00:16:59,640 Speaker 1: in terms of they're more companies seeing a worsening of 250 00:16:59,720 --> 00:17:04,840 Speaker 1: them and worsening of order intake. But the worsening has 251 00:17:05,160 --> 00:17:08,320 Speaker 1: um has slowed down. That's where we are in terms 252 00:17:08,400 --> 00:17:12,760 Speaker 1: of export demand. And not wanting to stray too far 253 00:17:12,880 --> 00:17:18,000 Speaker 1: off economics, but I'm interested in how you and your 254 00:17:18,840 --> 00:17:22,760 Speaker 1: friends and family have have thought about the so called 255 00:17:22,800 --> 00:17:28,920 Speaker 1: Swedish experiment. Are people sitting in Sweden thinking, yeah, our 256 00:17:29,600 --> 00:17:33,080 Speaker 1: government was very smart and very brave and they've taken 257 00:17:33,119 --> 00:17:35,320 Speaker 1: the right decision, or or are there are there a 258 00:17:35,320 --> 00:17:37,479 Speaker 1: lot of worries because obviously there has been a much 259 00:17:37,560 --> 00:17:40,920 Speaker 1: higher mortality rate and a lot, no more cases than 260 00:17:40,960 --> 00:17:45,080 Speaker 1: in your Nordic neighbors. Yes, definitely. I mean I think 261 00:17:45,160 --> 00:17:48,800 Speaker 1: in all countries there's been a debate on what to 262 00:17:48,920 --> 00:17:51,679 Speaker 1: do and what not to do. And because this pandemic 263 00:17:51,800 --> 00:17:57,199 Speaker 1: mixes economic reasoning with fear and worries about family and relatives, 264 00:17:57,240 --> 00:18:00,480 Speaker 1: so there's been a lot of debate amongst sciences here 265 00:18:00,520 --> 00:18:06,600 Speaker 1: and among citizens. But I think the reasons for Sweden's 266 00:18:06,680 --> 00:18:11,080 Speaker 1: lacks approach has not been I mean, herd immunity has 267 00:18:11,119 --> 00:18:16,800 Speaker 1: not been the main reason. Neither has economics. It's more 268 00:18:16,880 --> 00:18:20,680 Speaker 1: been an effect of the Sweden's constitution, which says that 269 00:18:20,920 --> 00:18:23,640 Speaker 1: the government is not in charge here, it's the public 270 00:18:23,680 --> 00:18:28,760 Speaker 1: health authority and they've they've taken the decisions. So and 271 00:18:28,880 --> 00:18:31,399 Speaker 1: so that's been the thing, and also I guess a 272 00:18:31,440 --> 00:18:36,160 Speaker 1: cultural thing that Swedes are. We're not We're not used 273 00:18:36,200 --> 00:18:40,880 Speaker 1: to we're not imposing laws when it comes to containment measures. 274 00:18:40,920 --> 00:18:44,320 Speaker 1: We're instead we're asked to work from home, we're asked 275 00:18:44,320 --> 00:18:49,879 Speaker 1: not to travel too far from our domicile. So and 276 00:18:50,160 --> 00:18:54,120 Speaker 1: people seem to be adhering to those advice. But you're right, 277 00:18:54,400 --> 00:18:58,520 Speaker 1: mortality has been higher. The last numbers show that mortality 278 00:18:58,600 --> 00:19:02,240 Speaker 1: per million inhabitants here is around four hund and forty, 279 00:19:02,320 --> 00:19:05,480 Speaker 1: which is four times higher than in Germany. It's less 280 00:19:05,480 --> 00:19:07,760 Speaker 1: than in the UK, and it's less than in Italy 281 00:19:07,840 --> 00:19:11,119 Speaker 1: for example, but much higher than in the Nordic neighbors 282 00:19:11,200 --> 00:19:14,240 Speaker 1: and in Germany for example. So and that's been that's 283 00:19:14,280 --> 00:19:16,439 Speaker 1: also part of the debate. And in fact, now that 284 00:19:16,720 --> 00:19:22,959 Speaker 1: the government has just said that they will open an 285 00:19:23,040 --> 00:19:27,400 Speaker 1: inquiry into how this COVID nineteen pandemic has been handled, 286 00:19:28,000 --> 00:19:31,040 Speaker 1: so the debate will continue. I'm sure that's very interesting. 287 00:19:31,040 --> 00:19:32,520 Speaker 1: You said something I have to be I didn't know, 288 00:19:32,680 --> 00:19:34,959 Speaker 1: which is that this is partly about because the public 289 00:19:34,960 --> 00:19:38,760 Speaker 1: health authorities have been the ones constitutionally in charge. Yes, 290 00:19:38,920 --> 00:19:44,040 Speaker 1: So I think the outside, the perception and possibly particularly 291 00:19:44,080 --> 00:19:46,800 Speaker 1: among people who thought that other countries should have taken 292 00:19:46,840 --> 00:19:50,080 Speaker 1: this approach, was that Sweden had been very cool and 293 00:19:50,119 --> 00:19:54,159 Speaker 1: calculated and was putting a long term view of the 294 00:19:54,200 --> 00:20:00,280 Speaker 1: economy ahead of the short term human consequences, or very 295 00:20:00,359 --> 00:20:03,680 Speaker 1: least weighing the two things in the short term somewhat differently. 296 00:20:04,080 --> 00:20:06,240 Speaker 1: But the suggestion from what you're saying is this was 297 00:20:06,280 --> 00:20:10,400 Speaker 1: actually taken. This was a decision based on the long 298 00:20:10,640 --> 00:20:16,600 Speaker 1: term yest public health costs and benefits. Absolutely, and I 299 00:20:16,640 --> 00:20:18,560 Speaker 1: think a lot of this I mean, as I said, 300 00:20:18,600 --> 00:20:21,119 Speaker 1: economics has never been cited as a reason for this 301 00:20:21,280 --> 00:20:26,760 Speaker 1: more relaxed lockdown. Ah. And the Swedish constitution prevents the 302 00:20:26,800 --> 00:20:30,840 Speaker 1: government from interfering in the strategy of independent administrative bodies 303 00:20:30,880 --> 00:20:33,600 Speaker 1: that could be the RIX Bank, now it's the public 304 00:20:33,640 --> 00:20:38,960 Speaker 1: health authority. So yes, and it's also one the main 305 00:20:39,119 --> 00:20:42,919 Speaker 1: argument i'd say is, as you say, the overall public 306 00:20:42,920 --> 00:20:48,240 Speaker 1: health but also the egalitarian approach. For example, a Swedish schools. 307 00:20:48,280 --> 00:20:50,960 Speaker 1: Primary schools have been kept open. Secondary schools have been 308 00:20:50,960 --> 00:20:54,280 Speaker 1: closed in universities have been closed, but primary schools have 309 00:20:54,320 --> 00:20:57,320 Speaker 1: been kept open. And the argument there is that it's 310 00:20:57,600 --> 00:21:02,359 Speaker 1: much tougher for households are less well off to care 311 00:21:02,440 --> 00:21:06,440 Speaker 1: for children at home and keep them get them back 312 00:21:06,480 --> 00:21:09,360 Speaker 1: into the schooling mode. One school is open again, and 313 00:21:09,680 --> 00:21:13,880 Speaker 1: so that's been an important argument throughout this crisis. I'm 314 00:21:13,920 --> 00:21:15,640 Speaker 1: slightly worried that we're going to come to the same 315 00:21:15,680 --> 00:21:18,480 Speaker 1: conclusion that we always come to about, particularly about Sweden 316 00:21:18,520 --> 00:21:21,800 Speaker 1: but also sometimes the other Nordic economies, that they do 317 00:21:21,920 --> 00:21:24,080 Speaker 1: things better than we do, but we wouldn't be able 318 00:21:24,119 --> 00:21:28,520 Speaker 1: to do the same thing that they may be. So yes, well, 319 00:21:28,560 --> 00:21:30,840 Speaker 1: I mean, because the conclusion you might draw is that, 320 00:21:31,320 --> 00:21:35,720 Speaker 1: as usual, Sweden has turned out to be quite shrewd 321 00:21:36,160 --> 00:21:39,159 Speaker 1: and smart in its approach, as well as having in 322 00:21:39,240 --> 00:21:44,399 Speaker 1: quite a inclusive attitude to its citizens worrying about the 323 00:21:44,440 --> 00:21:47,639 Speaker 1: welfare of citizens. But it does rely, as you mentioned 324 00:21:47,640 --> 00:21:50,359 Speaker 1: at the start, on people not only having that sense 325 00:21:50,359 --> 00:21:55,600 Speaker 1: of fellow feeling but also doing what they're voluntarily encouraged 326 00:21:55,640 --> 00:21:58,199 Speaker 1: to do, as opposed to told being told, you know, 327 00:21:58,240 --> 00:22:01,600 Speaker 1: we can't help wondering that the voluntary approach to lockdown 328 00:22:01,600 --> 00:22:03,320 Speaker 1: in the US and the UK would have been a 329 00:22:03,320 --> 00:22:07,719 Speaker 1: bit less successful. Yes, one of my we may never know. 330 00:22:07,800 --> 00:22:10,840 Speaker 1: But also I think a worrying sign though, is that 331 00:22:11,000 --> 00:22:14,600 Speaker 1: high mortality rate. That's that's going to be. I think 332 00:22:15,359 --> 00:22:18,960 Speaker 1: once this year passes and once we see which countries 333 00:22:19,000 --> 00:22:21,800 Speaker 1: have fared in total mortality, that will be like the 334 00:22:21,880 --> 00:22:26,679 Speaker 1: final verdict over this how we've handled this pandemic, because 335 00:22:26,720 --> 00:22:29,800 Speaker 1: as it is, as it stands now, this this relatively 336 00:22:29,880 --> 00:22:33,040 Speaker 1: high mortality rate for Sweden must be seen as something 337 00:22:33,280 --> 00:22:37,600 Speaker 1: that's that's not a success in this in this pandemic. 338 00:22:38,400 --> 00:22:41,800 Speaker 1: I love the idea, Johanna, of the fish hook recovery. 339 00:22:41,840 --> 00:22:43,760 Speaker 1: You know, we've been talking about the bees and the ws, 340 00:22:43,760 --> 00:22:46,760 Speaker 1: but of course our Nordic, our Swedish economist talks to 341 00:22:46,840 --> 00:22:49,720 Speaker 1: us about fish hooks. I like it, Johanna, Thank you 342 00:22:49,800 --> 00:22:51,960 Speaker 1: very much. We will, as you say, we will need 343 00:22:52,000 --> 00:22:55,760 Speaker 1: to wait a year to see really, uh what how 344 00:22:55,840 --> 00:22:58,240 Speaker 1: things have panned out, but I suspect we'll have you 345 00:22:58,280 --> 00:23:03,040 Speaker 1: on the program before then. Thank you very much, Stephanie. 346 00:23:05,560 --> 00:23:08,000 Speaker 1: Thanks for listening to Stephanomics. We'll be back next week 347 00:23:08,080 --> 00:23:10,760 Speaker 1: with more on how COVID nineteen is turning the global 348 00:23:10,800 --> 00:23:14,080 Speaker 1: economy upside down, and remember you can always find us 349 00:23:14,200 --> 00:23:17,440 Speaker 1: on the Bloomberg Terminal, website, app, or wherever you get 350 00:23:17,480 --> 00:23:22,160 Speaker 1: your podcasts. This episode was produced by Magnus Hendrickson. Special 351 00:23:22,160 --> 00:23:27,439 Speaker 1: thanks to Jeanette Newman, Johanna Jeanson, Laura Milan, and Thomas Galtieri. 352 00:23:28,200 --> 00:23:31,280 Speaker 1: Lucy Meekin is the acting executive producer of Stephonomics and 353 00:23:31,320 --> 00:23:34,080 Speaker 1: the head of Bloomberg podcast is Francesca Levy.