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NEWGOVERNMENT

International reaction: Persson’s lesson for Britain

Britain's governing Labour Party and its leaders should heed the lessons of the Swedish general election over the weekend, British newspapers warned on Tuesday.

Sweden’s next prime minister Fredrik Reinfeldt, 41, led the centre-right Alliance for Sweden coalition to election victory on Sunday, just three years after being elected head the Moderate Party.

The left-of-centre Guardian daily notes that the defeated Social Democrat Prime Minister Göran Persson “stands today where (British Prime Minister) Tony Blair’s enemies would like to see him – booted out of office after leading a ruling centre-left party for too long.”

“Faced with a new, energetic, media-smart and younger opposition leader in the Moderate party’s Fredrik Reinfeldt – strong echoes of (main opposition Conservative Party leader) David Cameron in Britain – Mr Persson was unable to persuade voters that they should give him another mandate.”

The newspaper, which supported Labour at the last general election in May 2005, noted: “The larger lesson is that when a government is tired and a fresh-sounding opposition does not look too threatening, there can be an opportunity for electoral change, as Mr Blair found in 1997 and Mr Cameron hopes to show in the future.”

The issue of Blair’s leadership has come to the forefront in recent weeks after a growing rebellion within his own government which saw eight junior members resign demanding he step down. The chaos forced Blair to publicly vow to step down within a year, though he declined to set a specific date.

The Times, a right-of-centre daily, proclaimed: “Many politicians in Britain believe that they have glimpsed the future.”

“And it is Swedish.”

Drawing parallels between Reinfeldt and Cameron the newspaper’s editorial reads: “A young and articulate conservative leader with a gift for presentation has sufficiently modernised his party to topple the reigning but tired left-of-centre government.”

Cameron, who was elected as leader of the opposition in December, has helped the Conservatives take leads over Labour in opinion polls in Britain recently.

The newspaper also warns finance minister Gordon Brown, the odds-on favourite to succeed Blair as prime minister: “The Swedish result suggests that simply presiding over a reasonably successful economy is no guarantee of re-election for a party that has been in power for more than a decade.”

“And herein lie wider lessons for Labour.

“Unless Mr Brown can present himself as distinctive, voters may look elsewhere.”

Finally, junior education minister Lord Andrew Adonis, writing in The Financial Times in a comment piece titled “Swedish result is a warning Labour must heed”, echoed the views of The Times’s editorial writers, calling on Labour to speed up the process of market-based reforms for public services.

“We must continue to be ahead of the game on welfare and public service reform,” Adonis, a Blair supporter, wrote.

“After 12 years in office, the centre-left’s credibility in leading the next phase of modernisation was a big issue in the recent (Swedish) election, as it will be in the next British election, too.

“Competition between its (Sweden’s) centre-left and centre-right parties focuses on more, not less change,” he wrote.

“We should all take note.”

BUDGET

Bolder steps needed to get Sweden’s economy moving

The budget unveiled by the new Swedish government is far from being "neo-libertarian", as the Social Democrats have suggested. But the Alliance will need to embrace a more radical agenda if it is to deal with Sweden's economic problems, argues Nima Sanandaji, of think-tank Captus

The Swedish centre-right government was elected on the back of promises to put hard work and entrepreneurship in focus. The representatives of the Alliance are well aware of the fact that their chances of being re-elected in 2010 are slim if they do not manage to push down unemployment during the coming four years.

The new budget that the government recently presented contained a number of positive economic reforms, such as removing the obligation for companies to partially finance sick leave for their workers and the introdution of a tax deduction for those who are working.

Another reform is that unemployed students will become included in the official government statistics unemployment. Previously Sweden has, in contrast to almost the entire industrialized world, simply not classified this group as openly unemployed. This has been one of many ways in which the previous Swedish government has hidden the true rate of unemployment. The reform is a step in the right direction since in order to solve a problem one must first acknowledge it.

The Social Democrats, now in oposition, are harshly critisizing the new government for being “neo-libertarian” in their policies. But the reality is quite the opposite, as the new center right government is very close to the middle ground in Swedish politics and is conducting a relatively slow and careful reform of the Swedish economy.

Indeed, the new budget even includes tax increases for some small companies (as a previously possible deduction of the “employer fee” is removed) and increased taxes on tobacco products.

If the new government wishes to remain in power for more than 4 years they should always remember their own message during the election campaign. In the long term Sweden has many economic problems. The true unemployment rate is according to some estimates up to 15-20 percent. Welfare dependency is widespread and Sweden is doing much worse than the majority of industrialized nations regarding the creation of new companies.

That the Swedish economy has managed to develop during the past few years is to a large extent thanks to a number of successful Swedish multinational companies. But few of the large companies that the Swedish economy is so dependent on have been created after 1970, and the existing ones are increasingly establishing themselves in other countries.

Other problems include an aging population, the world’s highest taxes and perhaps most importantly that the Swedish work ethic is weakening due to many years with a generous welfare system that has punished hard work and rewarded those that do not work.

Given all the economic challenges that Sweden faces, the few reforms that the centre- right government is implementing might not be enough to again make Sweden a dynamic economy. If the government wishes to make a difference it should embrace a more radical agenda.

Nima Sanandaji

Nima Sanadaji is CEO of Captus, an independent Swedish free-market think-tank