24th June 19:19
Sweden = Another Potemkin Village
Sweden: IMF and OECD demand deeper social cuts
By Niall Green
29 August 2002
Recent International Monetary Fund (IMF) and Organisation for Economic
Co-operation and Development (OECD) reports on the Swedish economy have
called for a deepening of the decade-long assault on social redistribution.
With a general election on September 15, international and domestic capital
is signalling that there will be no let up in the drive to increase profits
at the expense of the living standards of broad sections of Swedish society.
An IMF report of August 7 states: "Structural reforms reinforced by EU
[European Union] membership have helped raise efficiency and [in] mitigating
distortions associated with Sweden's large welfare state." These sentiments
were already voiced by a June 28 OECD report which makes clear that
"structural reforms are needed to assure better medium term growth ...
Rigorous evaluation of performance in each area of public service would also
help to promote efficiency and identify low-return programmes."
Swedish Social Democratic Party (SAP) Minister of Finance, Bosse Ringholm,
welcomed the reports, saying that he shared many of their conclusions. The
SAP, propped up by their parliamentary allies the Left Party and the Greens
since 1998, has already been engaged in implementing large scale reductions
in government social spending.
Government spending has fallen from 66.6 percent of GDP in 1993 to 51.3
percent in 2001. Though still at a relatively high level compared to many
other Western countries, the SAP, who replaced the right wing Moderate
government in 1994, has presided over a period of social cutbacks on a scale
unseen anywhere else in Europe.
Two aspects of social spending that attract particular attention from the
IMF and OECD are sick pay and disability pensions. Increased pressure in the
workplace has forced tens of thousands more Swedes to withdraw from work
because of illness. The Swedish government spends 113 billion Skr ($12
billion) per year, or 16 percent of the national budget, on sickness and
disability payments. The IMF complains, "[a] surge in sickness absenteeism
and continued high levels of disability retirement have eroded the labour
supply." They acknowledge that the huge cuts in government spending have
been largely responsible for creating the health crisis among workers: "It
is possible that cuts in fiscal expenditures during the second half of the
1990s led to a rise in work-related stress, particularly in the health and
Those whom capital drives to ill health are no longer to be permitted a
ready means of escape from work-related pressures. The SAP plans to cut
central government spending on sickness and disability benefits in half by
2008 through a scheme called the "programme for a humane working life."
While this speaks of improving working conditions, the main thrust is to
make receipt of benefits more difficult. New eligibility criteria have been
introduced into the social insurance system. Under one proposal, sick
workers would be forced to resubmit to a further medical re-examination
after 60 days claiming sick pay. The more right-wing parties such as the
Moderates largely dispense with the SAP's humane rhetoric, attacking
government sickness spending as being too generous (workers receive 80
percent of their pay) and for encouraging "laziness".
Education and health provision also come under the microscope of the OECD
and the IMF. The Swedish government is urged to reduce the number of years
taken by students to obtain qualifications and to limit the duration for
which they receive financial assistance, and to require students to pay for
part of their tuition fees. Proposed individual learning accounts are
rejected by the OECD as "another example of a policy that would take people
away from their work ... for what may be uncertain economic returns on the
additional investment in their human capital."
In the area of healthcare, the OECD wants to see the extension of the
already existing policy of using internal and external markets, with the aim
of identifying the "scope for additional use of private sector
alternatives." Nor are the elderly to be spared from austerity measures, as
"the increasing proportion of elderly in coming years will put resources
under pressure ... Public funding allocated to this sector will need to be
weighed against the costs and benefits of meeting other public priorities
instead, especially given the well-established tendency towards
ever-increasing demand for health services when the patient bears virtually
none of the cost." In other words, unless the infirm elderly are able to
meet an ever-greater proportion of the costs of treatment themselves they
will be faced with a greatly diminished service.
Sweden still has one of Europe's more generous arrangements for paid leave
for parents and benefits to alleviate the financial costs of bringing up a
family. Naturally, this is also to be targeted. Under the heading "Could
Greater Value for Money be Achieved from Public Spending?", the OECD
chastise the government for recently extending parental leave claiming that
"prolonged leave, as well as having fiscal consequences, can lead to skills
loss and lower labour supply."
While for most of the post-war era Sweden was hailed as a shining example of
"good capitalism", a folkhemmet, (people's home) praised for its
egalitarianism, from the start of the 1990s fundamental economic changes
have transformed Sweden's social and political physiognomy. In 1990 Sweden
entered into a recession that lasted until the middle of the decade.
Problems faced by Swedish capital in competing on a global stage were
compounded by the collapsing Soviet economy with which Sweden had developed
significant links. The economic crisis saw unemployment triple to 14 percent
and GDP fall by 6 percent between 1991 and 1993. Youth, immigrants and
single parents were worst hit, bearing the brunt of cutbacks in employment
The 1994 victory of the Social Democrats over the previous Conservative
Moderate-led Bildt administration saw the government deepen public spending
cuts at the behest of Swedish capital, ably assisted by their partners in
the trade union confederation (the LO). Aiming to improve competitiveness on
the world economic stage by curtailing measures of social redistribution,
the government launched attacks on welfare, including pensions, health
insurance and child allowances.
While the economic upturn of the late 1990s resulted in some limited
reversals of the attacks on welfare provision, alterations to the national
economy mean that the social model of the post-war period has been dealt a
deathblow. Sweden's generous social provision was made possible by the
existence of several globally significant companies recycling profits
through the Swedish economy. However, in the last decade, many of the most
notable of these-Volvo, Saab, Ericsson, ABB-have either merged or been
bought out by foreign based companies, or have emerged as global players in
their own right. Either way, the drive by Swedish capital to survive in the
global economy has destroyed the national economic basis that funded
previous high levels of social expenditure. Yet still the OECD warns that
"the profit share continues to decline and is now lower than at its previous
trough in 1990, suggesting that more vigorous productivity growth or lower
wage inflation will be needed in order to substantially align the increases
in the business sector's costs and revenues."
In addition to this, Sweden's 1995 entry into the European Union has
necessitated major cutbacks in public spending in order to meet entry
The OECD makes plain that whichever party goes on to form a government after
September 15 must press ahead with the budget cutting agenda of big
business: "Although many reforms to public services have been made since the
budgetary crisis in the early 1990s, further reforms are needed both to
improve the remaining weak spots and to continue pursuing performance
enhancement and greater efficiency across the board."
26th June 04:22
Sweden = Another Potemkin Village
DameCULOS, tu eres el animal aqui. Read it stupid and read it correctly.
The government makes cuts and the people get the shits and get the blue flu!
The IMF complains, "[a] surge in sickness absenteeism (In Sweden) and
continued high levels of disability retirement have eroded the labour
They acknowledge that the huge cuts in government spending have been largely
responsible for creating the health crisis among workers:
"It is possible that cuts in fiscal expenditures during the second half of
the 1990s led to a rise in work-related stress, particularly in the health
and education sectors."
You stupid twat.
26th June 04:22
Sweden = Another Potemkin Village
Fartworm, PNP Vruuto, you also obviously have a very low comprehension
level . . . it's not "blue flu" it's "work-related stress" as you quote
below, can you be more stupid? So stress is leading people to misss work
and they have less health benefits which compounds the problem of
Yes, . . .