Swedish government to extend measures for companies hit by COVID-19 - reports

STOCKHOLM, Nov 9 (Reuters) - Sweden’s government will extend wage support and income compensation for companies hit by the coronavirus pandemic and measures to halt its spread, Swedish media reported on Monday.

While Sweden has opted against the kind of strict lockdowns seen across much of Europe, businesses have still been badly hit as people work from home, stop travelling and avoid crowds.

The economy, which contracted 8.3% in the second quarter, has started to rebound, but a wave of infections across Europe and a rise in new cases in Sweden have put the recovery under threat.

The government will extend by six months a furlough scheme that pays a proportion of wages of employees who are on shorter hours, Swedish radio reported, without naming any sources.

The scheme was due to run out at the end of the year.

The minority coalition will also retroactively extend support to companies which saw significant revenue falls as a result of the pandemic through to the end of October, news agency TT reported, citing Mats Persson, economic spokesman for the Liberal Party.

The Liberal party is not part of the government, but supports the ruling minority coalition’s budgets.

Sweden has seen a surge in new cases of COVID-19 in recent weeks with infections passing the peaks set in spring. The government has not imposed a lockdown, but has tightened recommendations on social distancing across much of the country.

Reporting by Simon Johnson, editing by Ed Osmond