Sweden Says Deficits Should Be Tolerated in Race to Cut CO2

Sweden’s finance minister, Magdalena Andersson, said it should be acceptable to use budget deficits to pay for the economic shift needed to fight climate change.

The country’s strict fiscal policy framework, with its surplus target and debt anchor, should be softened to allow for urgent investments to save the planet, she said on Thursday. Countries like Sweden need greater fiscal freedom to invest in the kind of infrastructure that will be needed in a hotter world.

The deficit Sweden has now is already a form of “borrowing for climate investments,” Andersson said. “I have for a long time thought ...