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Foreign postgrads caught in the middle of poor legislation

Sweden should make it easier for foreign PhD students to apply for residency, argue three representatives from two of Sweden's biggest academic associations.

Foreign postgrads caught in the middle of poor legislation
A university student in Sweden. Photo: Anders Wiklund/TT

Almost half of the country's 19,000 PhD candidates come from abroad. They are considered a significant resource for Swedish research and higher education, but still are subjected to unfair conditions because of flaws in legislation. As representatives from the country's two largest national associations for PhD candidates, we are concerned about the situtation of foreign PhD candidates facing difficulties when applying for permanent residency and citizenship.

PhD candidates are the only group in our society who are defined both as students and as employees. The majority of today's PhD candidates are university employees for at least four years, they pay taxes, and they contribute to the Swedish education and research community. But for a long time, foreign PhD candidates have been granted temporary residence permits based on student visas instead of work permits. In 2014 the law was amended so that PhD studies would be considered work, and that residence permits for four years of doctoral studies could result in a permanent residence permit.

Despite the recent change in law, the total period of time for PhD studies is not always considered as the basis for qualification for permanent residency. The Migration Agency only counts the qualifying period for permanent residency from the date when the first temporary residence permit for doctoral studies has been issued. PhD candidates who have had a residence permit based on other grounds need to wait until their existing permits expire and then apply for a residence permit based on their PhD studies. The same applies to those who have had residence permits based on family grounds (co-applicants) or another type of attachment. The time spent on the old residence permit is not included in the qualification criteria and is completely wasted. Therefore, the current interpretation of the law discriminates against those PhD candidates who have previously had residence permits based on other grounds.

READ ALSO: Fewer foreign graduates stay in Sweden to work

Issuing temporary residence permits is a very time-consuming process, both for PhD candidates and for the Swedish Migration Agency. Currently, PhD candidates must renew their residence permit every year. And those who receive residence permits shorter than a full year are not entitled to national registration. This means that they cannot apply for a social insurance number and could miss many important benefits and services to which members of Swedish society are entitled.

Moreover, while their applications for the extension of their residence permits are being processed, they cannot travel back to their home countries, attend conferences or take PhD courses abroad. The situation may, unfortunately, be even more difficult for those who have their family in Sweden. Taking parental leave is not always possible for these applicants while their residence permit application is being processed. Applicants who do not have a valid residence permit during their parental leave are not entitled to register for Insurance Agency services to receive child benefits and paid parental leave.

Applying for Swedish citizenship can be even more complicated. PhD candidates who want to become Swedish citizens must have lived in Sweden for at least five years and intend to stay here. Meanwhile, foreign students and PhD candidates must indicate in their initial applications when they are expected to leave Sweden. It can happen that this information is used against them several years later when they apply for citizenship, despite the fact that current legislation is clear that this information may not be used as the basis for issuing citizenship.

We believe that these conditions are not fair to foreign PhD candidates who have resided legally in Sweden for many years and who have contributed to the Swedish economy, research and higher education. The recent changes in the law that simplify the possibility of permanent residence are a very good foundation, but we still see ample opportunities for further improvements and thus suggest the following amendments:

1. Issue longer residence permits for foreign PhD candidates. Two-year residence permits are already the established practice for other groups of expatriates in Sweden. A practical solution is to issue longer residence permits for PhD candidates as well. We suggest issuing residence permits of two to four years instead of the present one-year permits. Such a simple change would save lots of time and resources for all parties involved.

2. Consider the qualifying period for permanent residence permits from the first day that the person is admitted to the corresponding PhD programme. Our proposal is that laws need to be amended in order to take into account the time of PhD studies as the qualifying period for permanent residency, regardless of what type of residence permit the person has been issued. Alternatively, the authorities should allow PhD candidates to renew their residence permits as soon as they are employed, rather than waiting until their current residence permits expire. The advantage is that the time they have had a residence permit based on other grounds would not be lost when they apply for permanent residency.

3. Citizenship must be granted based on fair and proper grounds. The current reading of the law by the Migration Agency is used against doctoral candidates who have previously mentioned in their application that they may intend to leave Sweden and is currently grounds for dismissing the right to citizenship for these applicants. But our experience based on contact with foreign doctoral candidates shows that this is not a fair practice. Facilitating the process of citizenship applications for foreign PhDs would enable them to apply for EU-funded research grants, participate in fundamental democratic processes (such as Swedish parliamentary elections and EU parliament elections) as well as to be able to travel abroad with a Swedish passport without the need to apply for visas to other countries.

We often meet foreign PhD candidates who are unsure whether they can or want to stay in Sweden after their graduation because of the complexities in the existing legislation. It is a great loss for both academia and Swedish society when such highly educated people leave the country. We need a better understanding and communication between the authorities involved to avoid different interpretations of the regulations concerning foreign PhD candidates.

We welcome all opportunities to establish a dialogue with the authorities and we encourage decision makers to review and improve the existing legislation so that foreign PhD candidates can be given fair opportunities to obtain permanent residency and citizenship in Sweden.

This is am English version of an opinion piece first published in Swedish by UNT

It was written by Benny (Behbood) Borghei, member of the board at SULF's (the Swedish Association of University Teachers and Researchers) Association of Doctoral Candidates; Anna Ilar, chair of SULF's Assocation of Doctoral Candidates; and Ulrica Lundström, chair of the Swedish National Union of Students-Doctoral Committee.

For members

EUROPEAN UNION

Should Sweden abandon a weak krona for the euro?

With the 20th anniversary of Sweden's euro referendum this month, the weak krona has revived the long dormant debate over Swedish membership. We look at why joining the single currency looks more attractive today.

Should Sweden abandon a weak krona for the euro?

The krona hitting rock bottom has reawakened a debate that had been dead for twenty years.

Hedge fund manager Christer Gardell kickstarted the debate before the New Year, when he said Sweden should abandon the krona, which was now “a shitty little currency”. In January, the Moderate Party grandee Gunnar Hökmark, chief of the Frivärld think-tank and long-term euro advocate, argued that Sweden should join.

Veteran economist Lars Calmfors, who chaired the government inquiry which in 1999 recommended that Sweden stay outside, made a similar call shortly afterwards. Carl Hammer, chief strategist at SEB, who had voted against joining in the 2003 referendum wrote in May that he, too, was now “leaning towards a ‘yes'” on euro membership. 

Now one of Sweden’s three government parties has started to campaign on the issue. The Liberal Party, long in theory in favour of euro membership, on September 4th called for a new government inquiry on joining the currency. 

“We can quite simply no longer afford to stay outside [the euro],” the party’s leader Johan Pehrson wrote in the Aftonbladet newspaper. “Let’s upgrade our EU membership from ‘basic’ to ‘premium’. Let’s bring in the euro now!'” 

Is it a hot topic? 

According to Calmfors and Hammer, the debate is raging in the circles they move in, but has yet to really spread to the general public. 

“Between 2010 and the end of last year, I don’t think I was asked even once to speak about Sweden and the euro. But now I have two or three invitations each week, and in fact six this week when we are approaching the 20th anniversary of the referendum.” 

“I see a lot of academic and business seminars on the weak krona,” Hammer agreed.

For both of them, the revival in interest has come about mainly due to the weakness of the krona, which Calmfors complained had been trading as if Sweden were a “banana republic”. And unlike during the 1999 internet crash or the 2007 financial crisis, when a drop in the krona helped bolster Sweden’s economy, this time the weak currency was causing problems. 

“Earlier it has benefitted us,” Calmfors said. “The krona depreciated and firms could gain market share. It helped stabilise output and employment,” he explained. “But this time, it’s different. Now, the depreciation of the krona counteracts the efforts of the Riksbank to get inflation down and reduce aggregate demand. So this time, it is a problem.” 

For Hammer, the weakness of the krona was more understandable, reflecting a flight to strong currencies in reaction to the war in Ukraine.

“Had we not had Ukraine, and had we not had other global issues, I think the krona would have been stronger,” he said.

Calmfors isn’t so certain about this, pointing out that the Swiss Franc, another small floating currency, has not been similarly weak. He does, however, see the invasion of Ukrainian as the second big reason why the euro debate has revived. 

“The war in Ukraine has made Swedes recalibrate our view of our position in the world,” he said. “The application for Nato membership is the most obvious evidence for this, but I think it spills over to the euro issue as well.”

Lars Calmfors, Professor Emeritus in Economics at Stockholm University. Photo: Anders Wiklund/TT

HOW HAVE THE FUNDAMENTALS CHANGED? 

1. Sweden’s government finances are much stronger

While the weak krona is the catalyst for the debate, for Calmfors, the improvement in Sweden’s government finances is a much better reason for sceptics to change their minds. 

When he submitted his report in 1999, his committee’s main argument against joining was the risk of a country-specific economic shock which would affect Sweden, but not other EU countries. Such a shock would be hard to combat if Sweden no longer had the freedom to set its own interest rates or devalue its currency. 

“We argued that (…) it’s good to have your own monetary policy, an exchange rate that can change,” he said. 

At that time, Sweden’s national debt was at 70-75 percent of GDP, well above the 60 percent that is the (increasingly theoretical) maximum for countries signed up to the EU’s Stability and Growth Pact.

“This was very important in the 1990s, because we had a sovereign debt crisis in Sweden, so fiscal policy could not be used as a substitute for monetary policy,” he remembered. 

Now, Sweden’s national debt is just 35 percent of GDP, well below that of France at 98 percent or Germany at 60 percent and, for Calmfors, this removes the biggest obstacle to joining, as Sweden’s government would be able to spend its way out of any country-specific shock.

“That’s very low in an international context, so we have a lot of fiscal firepower. No one would argue with us if we had an expansionary fiscal policy.” 

Hammer, arguing along the same lines, pointed out that in the years before and since the euro referendum, Sweden had never in fact suffered the sort of country-specific shock that Calmfors and his committee had worried about. The Riksbank, meanwhile, had always run a monetary policy in line with that of the European Central Bank. 

“For the past 30 years, Sweden has been living with a floating exchange rate but living as if we’ve had a fixed exchange rate,” he said. 

The country, he explained, had had strict limitations on government spending, a surplus target, a very coordinated and orderly wage bargaining process, and a fully funded pension system. “So if any country would have the room and possibility to live with a fixed exchange rate, it’s Sweden.”  

2. Businesses don’t use the krona anyway 

For Hammer, the biggest new argument against the krona is not so much improved government finances as the fact that Sweden’s big companies now barely use it.

And the same goes for Sweden’s pension funds.

“Large corporations don’t want to deal in the krona – they prefer to make transactions and trade in euros and dollars – and we channel a huge part of our surplus or excess savings into foreign asset markets,” he said. “So, we’ve already to some extent adopted foreign currencies, but we’ve also kept the krona, which from my perspective makes the arguments for having it less strong.”

It is this which has pushed him towards a “yes” despite continuing to believe that the euro is “a suboptimal currency union”.  

“I’m leaning towards voting yes if we were to have a new referendum on the basis that the foundation for the currency has been undermined by the fact that we’re so dependent on foreign currency,” he said. “From that perspective, I think, you can make a case for joining the euro on the grounds of greater financial stability.” 

3. After Brexit Sweden looks more and more alone

With the UK leaving the European Union altogether, Croatia joining the euro this year, Bulgaria scheduled to join in 2025, and Romania in 2026, the number of countries who are in the EU but not the eurozone is falling. 

“If you ask people, like Swedish commissioners in the EU or people that have been doing negotiations in in the EU, they have the view that we have lost out by not belonging to the core,” Calmfors said. “The risk that we will lose out probably becomes bigger, the greater the share of EU countries that adopt the euro.”

Carl Hammer, chief strategist at Sweden’s SEB Bank. Photo: SEB

WHAT ARE THE STRONGEST ARGUMENTS NOT TO JOIN?

1. The risk of country-specific shocks is real 

Just because Sweden has more fiscal firepower to deal with a country specific shock does not mean the risk of such shocks is not a major drawback to euro membership. 

Finland suffered one when Nokia, far and away the country’s biggest company, mismanaged its reaction to the launch of the iPhone and exited to the mobile phone business. Between 2008 and 2022 its debt to GDP ratio more than doubled from 33 percent to 74 percent. 

Greece, Italy, Spain and Portugal arguably suffered from the issue during the European banking crisis.

As Sweden’s economy is unusually sensitive to interest rates, with much higher private debt and a high share of variable rate mortgages, the ECB could easily set an interest rate that, while right for most eurozone countries, would be too high for Sweden. 

“That could be a problem, but it’s also a problem that could be dealt with by using fiscal policy,” Calmfors argues. 

2. The risk of bank bailouts and country bailouts remains 

The other big argument against joining the euro, which was clearly demonstrated during the European debt crisis from 2009 until about 2014, is that Sweden would have to help bail out countries, such as Italy and Greece, which have been less disciplined in the management of their government finances. 

Joining the euro would also mean joining the European Banking Union, which means that Sweden might also have to participate in rescuing banks in countries with less well-functioning financial supervision.

Calmfors acknowledged that this was still a risk, but argued that members of the European Union who are not part of the eurozone were increasingly being asked to contribute to rescue packages anyway. 

“If you look at the support after the Covid crisis and during the Covid crisis, we had to pay that as well, even though we were not a member of the monetary union,” he said. 

And when it came to bank bailouts, Sweden was, he argued, as likely to benefit as to lose out, given the high indebtedness of Sweden’s citizens. 

“We might end up having to pay for bank crises in other countries. But on the other hand, we would also be helped if we had a financial crisis, which of course is not something we can rule out,” he said. 

Also, he said there might be an advantage in having banks and other financial services regulated by the European Central Bank and other European regulators, as a European regulator might have more expertise, there are many cross-border links between banks, and there would be less of a risk of a cosy relationship building up between local banks and the regulator.   

HOW HAVE THE ADVANTAGES OF EURO MEMBERSHIP CHANGED?

Calmfors argues that while the negative risks of adopting the euro have diminished, the advantages remain more or less the same. 

“The biggest benefit is of course that having different currencies is a kind of trade impediment and that would be eliminated, which would mean more trade, which would mean that we use our resources more efficiently, so it would give slightly higher growth over a long period, which, even if small each year, would accumulate to quite a lot in the long term.” 

Recent research suggested, he added, that this effect might be more significant than people previously thought. 

“Studies seem to point to much bigger effects than we expected in the 1990s. We’re talking about a 10 to 20 percent increase in trade, not from one year to another, but over a number of years,” he said. 

The problem with the debate over euro membership had always been, he concluded, that the benefits and risks were of such a different character. 

“You can’t really make an economic calculation, because you are comparing different things: We are comparing small, but certain positive gains – because there will be more trade that we will get slowly over years – with a risk of big macroeconomic shocks that can have huge effects over a few years.”

This makes it hard for economists to reach a firm conclusion. 

“You can’t really say what is right and wrong, but I think what you can say is that the balance has shifted in the direction of being a more positive calculation for being a member today than there was 25 years ago.” 

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