• Sweden edition
 

Ministers tout 'Swedish model' to solve European debt crisis

Published: 12 Oct 2011 17:13 GMT+02:00
Updated: 12 Oct 2011 17:13 GMT+02:00

"We learned then the importance of restoring confidence and that capital injections are vital -- if necessary with government money," the pair wrote in a comment piece.

Following years of crazed property speculation and deregulation of the Scandinavian country's credit markets, Sweden's banking and financial service bubble burst in the early 1990s amid a global economic slowdown, landing it in its deepest economic crisis since the 1930s.

The Swedish government took control of its struggling banks in exchange for emergency aid, thus making the taxpayer footing the bill owners of the ultimately valuable assets.

Once the crisis was over, the Swedish state sold off nearly all of the nationalised bank investments, getting back most of the money that had been pumped into the sector.

Sweden also cut public sector jobs, slashed pension and unemployment benefits, sold off publicly-owned companies and hiked union membership fees as part of efforts to stabilise the economy and its public finances.

AFP/The Local (news@thelocal.se)

Your comments about this article

21:57 October 12, 2011 by storstark
sorry, was this an article? it seems to be missing something...

maybe the author thought it was a good idea to tout Sweden's remedy for success, before realising the pitfalls halfway through and quickly giving up on the idea..

the "getting back most of the money" line infers that european governments should be quite content to bail out banks with tax money, nationalise them, and sell them back at a later date for less than they invested...

perhaps rather than following this line, Finance Minister Anders Borg and Foreign Minister Carl Bildt should instead visit a pawn shop or two and see what business model they use to ensure their businesses continue to tread water...
18:45 October 14, 2011 by SuperTulle
Nobody would do it. Sure it might save the economy, but when you cut jobs, raise the taxes and lower unemployment benefits and pensions, people won't like you very much after that. And since they're already rioting in Greece, Spain and so on, no one knows what they might do after that.

They're simply too scared!
10:39 October 17, 2011 by Great Scott
Finance Minister Anders Borg and Foreign Minister Carl Bildt

Incompetents speaks again, wasn't it Carl Bildt that run the country into the ground at the time they are speaking about, he was prime minister then.
20:51 October 18, 2011 by MichaelM
Well Sweden didn't have zombie banks and it was the investors that took the haircut. Sweden bounced back fairly quickly... contrast with Japan...

Looks like it might be 2008 all over again... This time the banks will be nationalized...
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