• Sweden's news in English
 
almadalen_header

Sweden 'slimmest Nordic welfare state '

Published: 21 Jan 2014 07:33 GMT+01:00

The Nordic model, known for high taxes and its cradle-to-grave welfare system, is getting a radical makeover as nations find themselves cash-strapped. During the post-war period, the Scandinavian economies became famous for a "softer" version of capitalism that placed more importance on social equality than other western nations, such as Britain and the United States, did.

Then came globalization and an ideological shift to the right has led to a scaling back of the public sector.

In Sweden, visitors are sometimes surprised to learn about year-long waiting times for cancer patients, rioting in low-income neighbourhoods and train derailments amid lagging infrastructure investment.

READ ALSO: French ambassador Jean-Pierre Lacroix on myth-busting the image of "leftwing Sweden"

"The generosity of the system has declined," said Gothenburg University politics professor Jonas Hinnfors. "Much of this already started changing in the 1980s and especially in the 1990s." 

In the wake of a banking crisis in the early nineties, Stockholm scrapped housing subsidies, reformed the pension system and slashed the healthcare budget. A voucher-based system that allows publicly funded, privately managed free schools to compete with state schools was introduced, and has drawn attention from right-wing politicians elsewhere, including Britain's Conservative Party.

In 2006, conservative Prime Minister Fredrik Reinfeldt's government accelerated the pace of reform, tightening the criteria for unemployment benefits and sick pay while lowering taxes. Income tax in Sweden is now lower than in France, Belgium and Denmark, and public spending as a share of GDP has declined from a record 71.0 percent in 1993 to 53.3 percent last year.

Once the darling of progressives, Sweden has become a model for free-market-leaning thinkers including British weekly The Economist, which last year hailed the scaled-down Nordic model as "the next supermodel."

"They offer a blueprint of how to reform the public sector, making the state far more efficient," it wrote.

This month, the Wall Street Journal praised tax cuts and entitlement reforms in Sweden and Denmark that "are now discomfiting their big-government admirers overseas."

Although polls show strong support among Swedes for the income tax cuts of the past few years, the leftist opposition looks set to win this year's general election. The Social Democrats, in power for much of last century, have been boosted by a string of scandals in private elderly care homes involving degrading treatment of their residents, and by plummeting school results in international rankings.

READ ALSO: Unlikely dalliance to usher out Alliance? 

Critics wonder, however, how the workers party will inance an improvement of public services, having already pledged to keep the popular income tax cuts.

If Sweden is the Nordic country to have gone the furthest in shrinking its welfare state, Denmark has moved the fastest. When her Social Democratic government took power in 2011, there was little to suggest Prime Minister Helle Thorning-Schmidt would make any dramatic changes to the country's cherished welfare state -- funded by the world's highest tax burden.

After a centre-right government had raised the retirement age and reduced the unemployment benefits period from four to two years, "Gucci Helle" -- as she is known among her detractors -- went on to cut corporate taxes to 22 percent from 25 percent.
Other reforms have included requiring young people on benefits to undertake training, and withdrawing student aid to those taking too long to finish their studies.
It has left her deeply unpopular in some quarters. At last year's May Day speeches, she was met by jeers as audience members sprayed her with a water pistol, threw tomatoes at her, and even flashed their buttocks.

For some of Thorning-Schmidt's allies -- notably the leftist Red Green Alliance -- the reforms have been too much to stomach, and in November her minority government had to seek support from the main opposition parties to pass this year's budget. Denmark has been spurred into action by a persistently sluggish economy since a housing bubble imploded in 2007, leading to anaemic household spending.

Among Danes there is also a sense that the welfare state was ballooning out of control. In 2011, a TV report aiming to show what life was like for the poor in Denmark visited the home of a single mother on benefits, whose disposable income turned out to be 15,728 kroner (2,107 euros, $2,860) per month.

"Poor Carina", as she was later nicknamed, sparked a national debate on the level of unemployment benefits, with one pollster crediting her with fuelling a rise in the number of people who felt benefits were too high.

The next Nordic country to reform its welfare state is likely to be Finland, battered by a downturn in the two pillars of its economy: the forest industry and information technology. Helsinki responded to the crisis by announcing in August a slew of measures to put more Finns to work. Under the controversial plan, the retirement age is to go up, time spent at university will go down, and incentives to enter the job market will be boosted for the unemployed and young mothers.

Only Norway looks unlikely to reform entitlements anytime soon, bolstered by its oil wealth. The country is home to the world's largest sovereign wealth fund. Worth some 5,116 billion kroner (610 billion euros, $830 billion), each of the country's 5,096,000 inhabitants is -- at least on paper -- a millionaire.

New centre-right Prime Minister Erna Solberg has pledged to preserve the welfare state. 

Your comments about this article

Today's headlines
Almedalen 2015
BLOG: Sweden's political power forum - Day Four
Sweden Democrat leader Jimmie Åkesson, speaking on Wednesday. Photo: Henrik Montgomery/TT

BLOG: Sweden's political power forum - Day Four

The nationalist Sweden Democrat party's leader Jimmie Åkesson has told his nation's biggest political conference that he wants to create a better county for children and crack down on extremism. READ  

IN PICTURES
Thousands welcome home Sweden’s heroes

Thousands welcome home Sweden’s heroes

Stockholm’s Kungsträdgården park was packed with tens of thousands of Swedish football fans on Wednesday afternoon as they welcomed the country’s Under-21 team home after their historic European Championship win in Prague. READ  

The Local Travel
Scary taxis lure crime freaks to Stockholm
Stockholm by night. Scary? Photo: Helena Wahlman

Scary taxis lure crime freaks to Stockholm

A new crime tour of Stockholm offers a unique glimpse of Swedish crime history from the comfort of a taxi cab. But will the pricey ride really lure tourists? The Local’s Sophie Inge investigates. READ  

Mediterranean migrant crisis
Swedish ship rescues 104 migrants off Libya
Swedish coast guard ship Poseidon. Photo: Carmelo Imbesi/TT

Swedish ship rescues 104 migrants off Libya

UPDATED: The Swedish coast guard ship Poseidon has rescued dozens of migrants who were travelling in a rubber boat in waters off the coast of Libya’s capital Tripoli. READ  

Presented by ConnectSweden
‘I don’t feel Swedish, I feel international’
Director of the American Chamber of Commerce in Sweden, Peter Dahlen.

‘I don’t feel Swedish, I feel international’

Fourteen years ago, American Peter Dahlen was just another “love refugee” in Sweden. Today he’s the Managing Director of the American Chamber of Commerce (AmCham), working hard to improve trade between Sweden and the US. The Local asked him about connectivity, trade, and life in Sweden. READ  

Interview
‘Swedish should be spoken in Sweden’
Richard Jomshof at Almedalen. Photo: Henrik Montgomery/TT

‘Swedish should be spoken in Sweden’

Top Sweden Democrat politician Richard Jomshof tells The Local all refugees must become fluent in Swedish but “it’s okay” for foreign businesspeople to use English instead. He's also rooting for the UK to quit the EU. READ  

European Under-21 Championship
Sweden celebrates first Euro U21 title victory
Players jump Sweden's goalkeeper Patrik Carlgren after he catches the decisive penalty. Photo: TT

Sweden celebrates first Euro U21 title victory

UPDATED: Sweden was still celebrating on Wednesday after a nail biting penalty shoot-out led the country to victory over Portugal and their first European Under-21 title in history. READ  

The Local List
Nine exciting activities to do on Sweden's Gotland
Visby, Gotland. Photo: Rodrigo Rivas/Imagebank Sweden

Nine exciting activities to do on Sweden's Gotland

Gotland is in the national spotlight each summer during Sweden's annual politics forum, Almedalen. But here's why it is also one of the nation's favourite tourist spots. READ  

Lisa Holm murder
Suspect freed in Lisa Holm murder case

Suspect freed in Lisa Holm murder case

UPDATED: One of the men police have been holding on suspicion of murdering missing teenager Lisa Holm has been released, but his older brother remains in police custody. READ  

Almedalen 2015
BLOG: Sweden's political power forum - Day Three
Christian Democrat leader Ebba Busch Thor at Almedalen. Photo: TT

BLOG: Sweden's political power forum - Day Three

Sweden's youngest political leader in history, Ebba Busch Thor has called for a crackdown on homegrown terrorists and lower taxes at Almedalen, the biggest week in Swedish politics. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Politics
Almedalen: The Local's guide to Sweden's power players week
Sponsored Article
VIP Mingle at Almedalen's hottest event
National
Swede battles slug invasion
Sponsored Article
What can we learn from Swedish women's sex habits?
National
VIDEO: Is this herring tasting clip an 'insult to Sweden'?
Blog updates

26 June

Editor’s blog, June 26th (The Local Sweden) »

"Greetings from Stockholm, We’re about to transport our newsroom to the idyllic Swedish island of Gotland for..." READ »

 

23 June

Defending Our Interests … And Our Allies (The Diplomatic Dispatch) »

"This is an important week for European security, with decisions affecting Europe’s unstable Southern and Eastern..." READ »

 
 
 
Gallery
Property of the week: Visby, Gotland
National
Sweden set for sunniest week of year
Gallery
People-watching: June 26th-28th
Features
The Local's essential guide to who's who in Swedish politics
National
More Swedish military exercises as Russia aggression fears grow
National
What's on in Sweden this week
Travel
Why Swedish camp sites are set for a bumper summer
National
Swedish summer's really on its way (at least according to forecasters)
Gallery
People-watching: June 24th
National
Why are southern Swedes angry about becoming 'Danish' again?
Society
Lifestyle: When to catch your favourite features on The Local
National
Is Sweden one of the world's most peaceful nations?
Sponsored Article
Harstena: Travelling to Sweden's secret islands
National
One in ten Swedish cats homeless
Sponsored Article
'I constantly evolve my Swedishness'
Gallery
Property of the week: Värmdö, Stockholm
Society
Would you eat this Swedish pizza?
National
Swedish royals' dream honeymoon
National
Swedish hospital opens first centre for male rape victims
Gallery
People-watching: June 20th-21st
Photo: TT
Lifestyle
Midsummer: The Local's guide to Sweden's craziest festival
Sponsored Article
Murder, myth and magic: Travelling to the birthplace of Sweden
Gallery
People-watching: June 17th
Sponsored Article
Gallery: Life in Sweden's secret archipelago
Society
Seven alternative names for Sweden's Prince Nicolas Paul Gustaf
National
FBI returns stolen Swedish books
National
Want to smell like Zlatan?
National
Royal joy over birth of new prince
Gallery
Property of the week: Brantevik, Simrishamn
National
How racy graffiti inspired a teacher's high school sex class
Gallery
People-watching: June 12th-14th
National
As it happened: Prince Carl Philip marries Sofia Hellqvist
Technology
Is Stockholm the world's creative capital?
National
Timeline: Julian Assange case
Sponsored Article
KTH President: ‘Sweden’s success is because of its size’
Gallery
IN PICTURES: New royal couple Prince Carl Philip and Sofia Hellqvist
Features
Ten Swedish festivals to discover
Features
Ten reasons Stockholm is definitely way cooler than Copenhagen
National
VIDEO: Watch Swedish man rescue baby elk from cold creek
National
VIDEO: Have you seen this jet ski blunder at a Malmö hotel opening?
Gallery
People-watching: June 10th
National
Swedish airports launch cheeky safe sex toilet campaign
Gallery
IN PICTURES: June summer snaps
Politics
Rainbow flag compared to swastika by 'sorry' Swedish councillor
Sponsored Article
Why expat women are choosing Swedish natural birth control
Bupa
Sponsored Article
Healthcare: Nine questions every expat should ask
Sponsored Article
The millionaire teacher who leads by tough love
Sponsored Article
How to change the world: Malmö to Mogadishu
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

3,241
jobs available
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
psdmedia.se