• Sweden edition
 
Opinion
'Borg: Sweden's worst ever finance minister'
Anders Borg. File photo: TT

'Borg: Sweden's worst ever finance minister'

Published: 26 May 2014 09:52 GMT+02:00
Updated: 26 May 2014 15:22 GMT+02:00

I’m not impressed by Anders Borg. The Swedish finance minister has been heralded internationally by luminaries such as The Economist and Financial Times for posting strong GDP growth and maintaining high levels of employment since the Alliance took office. This view is a sham. 

The financial crisis, which coincided with the right-wing electoral victory of 2008, has benefited the Swedish economy more than any other in the developed world due to reforms to the banking sector made two decades ago. Meanwhile, employment and welfare statistics have been fiddled.

Borg is famed for his arduous weight sessions in the Riksdag gym, where he grunts and groans for all to hear. Yes, he is that guy at the gym, you know the one with the ponytail looking at himself in the mirror, making lots of noise while pumping iron. 

There's nothing wrong with this in principle, except that under his watch Sweden has a deflationary economy. Not to mention the fastest growing rate of inequality in the OECD, and we shouldn’t forget the unparalleled youth and migrant unemployment rates (otherwise known as the people who fund the generous pension and welfare systems).

What about the housing bubble? Record levels of household debt? Maybe this is why he grunts so loud, although a change in policy would be a lot more helpful. All these trends have taken off since the Moderates began to control the economy.

The privatization of housing and the transport network is a classic example of the failure of Borgonomics. They provide a nice short-term income boost for the annual accounts while reducing operational costs. Good work Anders. What happens later though? 

Anyone can run a profitable line from Stockholm to Gothenburg, but a service from Boden to Kiruna…good luck with that. Rail privatizations consistently fail because a national network, particularly in a country with such low population density as Sweden, is not profitable and private competition reduces state income on the most popular routes.

This incompetence follows on from the policy of the Carl Bildt government of the early 1990s when the Arlanda Express contracts were sold for peanuts until 2040. Private profits, subsidized by the taxpayer of course. Borg, however, rarely uses the Arlanda Express as the taxpayer has kindly spent around 1 million kronor ($152,000) on having the government airplane drop him off at Skavsta so he can have a shorter drive home after meetings.

Most damaging of all his economic mismanagement has been the approach to housing policy. The great sell-off, at rock bottom prices, of public housing will scar the economy for decades. Maybe had Borg lived in the real world, instead of a student apartment, before he became an unelected minister, his decisions would have been better informed.

Housing inflation was already a problem when the Alliance took office. The solution was not to then flood the market with public housing far below the real market value. Speculation has taken off, property prices have risen to new highs, and of course private debt has soared.

A housing bubble together with record levels of private debt, coupled with a deflationary economy isn't a good combination. Selling off public housing when people under the age of 25 are over 400 percent more likely to be unemployed than their older counterparts, is a bad idea. Allowing the kronor to inflate by over 10 percent vis à vis major currencies and your main trade partners, when much of your economic stability comes from manufacturing and exports, is not very helpful either.

Now the Riksbank finds itself in a bind. Raising interest rates would help to cool the market and make speculation less profitable, but that would likely make the unemployment crisis even worse. Lowering rates will punish savers and keep the bubble growing. Throw in the deflationary crisis and the costs of Borg’s austerity politics will take a long time to pay off.

Borg has presented the Swedish economy as booming, arguing that liberalization has been beneficial for employment and the GDP. In reality it’s more like the competitive body builder which he may have been more suited for. All oiled up and high on steroids the impression is of a glistening economy which has outperformed much of the EU during his reign.

The problem with juicing yourself up though is that it’s not good for your health in the long run, and because of the Borg agenda the next global crisis will hit Sweden a lot harder than 2008 did.

Christian Tsangarides is a commentator on Swedish affairs and former lobbyist on EU fisheries policy. Follow him on Twitter here

The Local (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

Today's headlines
Elections 2014
Social Democrats reveal election manifesto
Photo: TT

Social Democrats reveal election manifesto

Sweden's main opposition party the Social Democrats is revealing its election manifesto at a press conference at a high school in Stockholm. READ  

Teen run over by train after 'shoplifting' chase

Teen run over by train after 'shoplifting' chase

A teenage boy is in a critical condition after he was hit by a passing metro train in Stockholm. The accident ground rail traffic to a halt, and has police suspecting attempted murder. READ  

Swimrun
Record win at Sweden's tough island race
Photo: Jakob Edholm/ÖTILLÖ14

Record win at Sweden's tough island race

Two Swedes crushed last year's course record at the Swimrun world championship in Stockholm's archipelago on Monday. READ  

Sweden reveals Academy Award submission
Swedish director Ruben Östlund on set. Photo. TT

Sweden reveals Academy Award submission

The movie set to represent Sweden at the 2015 Academy Awards was revealed on Monday, a film that has already won awards abroad. READ  

Amphetamines
Hidden forest drug stash leads to prosecution

Hidden forest drug stash leads to prosecution

A 53-year-old man has been prosecuted after police in western Sweden made one of their largest drug seizures in the area. READ  

Man shot dead in hunting accident
Photo: Hunter Desportes/Flickr

Man shot dead in hunting accident

UPDATED: Police in northern Sweden say a man was killed on Monday morning after what they described as a "hunting accident". READ  

Pirate Bay Swede's trial set for final stage

Pirate Bay Swede's trial set for final stage

The mother of Swedish Pirate Bay co-founder Gottfrid Svartholm Warg has told The Local about her son's "suffering" in jail ahead of the final stages of his trial. READ  

Suspected Ebola case ruled out in Sweden
Photo: Fredrik Sandberg/TT

Suspected Ebola case ruled out in Sweden

UPDATED: Officials at a Stockholm hospital reported that they had found a suspected case of the Ebola virus on Sunday night. But the case was dismissed on Monday. READ  

Murderer on the loose after breakout

Murderer on the loose after breakout

A 34-year-old man who killed a child is on the run after he broke out of a psychiatric ward in central Sweden. READ  

Skåne floods
Huge clear up underway after Skåne floods
A Malmö bus under water. Photo: Stig Åke Jönsson/TT

Huge clear up underway after Skåne floods

Flood waters subsided in the southern Sweden region of Skåne on Monday, after flash flooding saw chaos on roads and trains at the weekend. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Huge clear up underway after Skåne floods
Politics
Sweden's Alliance reveals full manifesto
Tech
Sweden's highest peak to lose title next year
Politics
How immigration became a key election issue
Society
Brit's life in Sweden becomes BBC radio show
Blog updates

02 September

America night (Blogweiser) »

" There was an event this weekend for the ‘Americans in Sweden’ Facebook group. I’m a member, and I brought my girls to the evening. The gathering was at a Boston-themed sportsbar in a mall. There were loads of screens, a bowling alley, a game room and a jumbotron. It was as good a place as any to..." READ »

 

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 
 
 
Gallery
People-watching August 27
Gallery
Top ten false friends in Swedish
National
Roma advocate scoops Wallenberg prize
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Sponsored Article
Find out what gives this Swedish school executive appeal
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
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

745
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
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:
http://psdmedia.se