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In-Depth Information
sweeping western Europe did not pass Sweden by. Unemployment hit a postwar
record and in autumn 1992 - as the British pound and Italian lira collapsed on the
international money markets - the krona came under severe pressure. In an attempt
to steady nerves, Prime Minister Bildt and Carlsson, leader of the Social Democratic
opposition, made the astonishing announcement that they would ignore party lines
and work together for the good of Sweden - and then proceeded with drastic public
expenditure cuts .
The fat was trimmed off the welfare state - benefits were cut, health care was opened
up to private competition, and education was given a painful shake-up. But it was too
little, too late. Sweden was gripped by its worst recession since the 1930s and
unemployment had reached record levels of fourteen percent - the days of a jobless rate
of one or two percent were well and truly gone. Poor economic growth coupled with
generous welfare benefits, runaway speculation by Swedish firms on foreign real estate
and the world recession all contributed to Sweden's economic woes.
The return of the Social Democrats
A feeling of nostalgia for the good old days of Social Democracy swept through the
country in September 1994, and Carl Bildt's minority Conservative government was
booted out. Swedes voted in massive numbers to return the country's biggest party to
power, headed by Ingvar Carlsson . He formed a government of whom half the ministers
were women.
During 1994, negotiations on Sweden's planned membership of the European
Union were completed and the issue was put to a referendum, which succeeded in
splitting Swedish public opinion right down the middle. The Ja till EU lobby
argued that little Sweden would have a bigger voice in Europe and would be able
to influence pan-European decisions if it joined. Nej till EU warned that Sweden
would be forced to lower its standards to those of other EU countries,
unemployment would rise, drug trafficking would increase, and democracy would
be watered down. But in November of that year, the Swedes followed the Austrians
and the Finns in voting for membership from 1 January 1995 - by the narrowest of
margins, just five percent.
Following membership the krona fell to new lows as money-market fears grew that
the minority government wouldn't be able to persuade parliament to approve cuts in
state spending. However, the cuts were duly introduced - the welfare state was
trimmed back further and new taxes were announced to try to rein in the spiralling
debt. Unemployment benefit was cut to 75 percent of previous earnings, benefits for
sick leave were reduced, and lower state pension payments also came into force; a
new tax was also slapped on newspapers. To try to keep public support on his side,
Finance Minister Göran Persson reduced the tax on food from a staggering 21
percent to just 12 percent.
Just when everything appeared under control, Carlsson resigned to be replaced by the
bossy Persson, known to friends and enemies alike as HSB - short for han som
bestämmer , he who decides. As the new millennium approached, the Swedish
government concentrated its efforts on turning the economy round and experts argue
this quiet period was necessary to muster strength to face the challenges to come.
2002
2003
2003
Sámi officially recognized as
minority language
Foreign Minister Anna Lindh
murdered
Referendum vote rejects membership of
the euro
 
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