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UNEMPLOYMENT

Sweden allocates billions to fight unemployment

The Swedish government has promised to find 8.4 billion kronor ($1.19 billion) to fund education and training measures designed to combat growing unemployment.

The four Alliance government parties have announced after talks that 4.5 billion kronor will be allocated for an additional 23,000 training places in 2010 and 2011, and a further 3.9 billion kronor on 54,000 places in various employment measure schemes for the unemployed.

Around two billion kronor of the funds will be spent on creating 40,000 places in a new activation programme which within state, county council and non-profit organizations is being called “Lyft”(Lift).

“Lyft” should be made available for a maximum of six months for people currently engaged within the work and development guarantee, and for three months for young unemployed.

The initiative will be focused on sectors such as the environment, forestry, cultural heritage, health and welfare and schools.

The Swedish Public Employment Service (Arbetsförmedlingen) will be given an additional 600 million kronor.

620 million kronor will be used to create 2,000 new places within coaching, work experience and practical skills development. 225 million will fund 1,000 new places in labour market training schemes.

The package of measures also includes a specific investment for Folk High Schools which will cover 1,000 training places and will cost 51 million kronor.

Two billion kronor will underwrite 10,000 new places within both academic and vocational education at adult education colleges.

440 million kronor has been allocated to 3,000 new places within vocational high school from the autumn of 2010 and 2011. A total of 6,000 people will therefore be able to undergo courses.

Two billion kronor will be spent on the creation of new university places in 2010 and 2011. The money equates to a 20 percent increase in university and university college intake.

Education minister Jan Björklund concedes that the government parties were critical of the expansion of places while in opposition but pointed out that their initiative promises more money per student.

“It is better that the young study than loaf about in times of unemployment,” Björklund said.

“There is a risk that a third of the unemployed get stuck and remain in some form of unemployment,” the prime minister Fredrik Reinfeldt told a press conference in Stockholm on Wednesday.

“The core strategy to meet this is with education, often vocational, and active labour market policies.”

Fredrik Reinfeldt denied that the government is massaging unemployment statistics by shifting people to labour market measures – a charge often levied at the previous Social Democrat government.

“What we criticized the Social Democrats for is that they had their comprehensive labour market measures during economic booms. They did not withdraw them when the good times returned. People were then just left sitting at the school desk.”

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EUROPEAN UNION

Sweden heads for economic slowdown EU warns

The European Union has warned that Sweden's economy is facing a marked slowdown, with unemployment set to rise above seven percent as companies cut back on investment.

Sweden heads for economic slowdown EU warns
Jobseekers entering an office of the Swedish Public Employment Service back in 2016, when the economy was booming. Photo: Jessica Gow/TT
The August 2019 economic forecast from the European Commission's Directorate-General for Economic and Financial Affairs sees the rate of growth of Sweden's real GDP dropping to one percent next year.
 
This is slower than what is expected for all but four of the other 28 European Union members, and well below the brisk  four percent rate the country enjoyed back in 2015. 
 
“Sweden’s economy is clearly slowing down. Domestic demand and investment in particular are weak,” the report read, blaming the insipid domestic demand on a decline in investment in the housing market following years of strong growth. 
 
The slowing economy had also pushed Swedish manufacturers to hold back on investments in equipment, exacerbating the decline. 
 
The authors pointed out that planned government spending would do little to pick up the slack. 
 
“In spite of sizeable spending needs for schools, health care and welfare services linked to demographic developments, general government consumption is set to moderate in 2019 and 2020,” the report read. 
 
“Costs linked to migration should decrease, whereas new defence and health care expenses, priorities of the 2019 budget, are partially compensated by cutbacks on, among other items, labour market and environmental measures.” 
 
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While the report predicted that growth would start to pick up again in 2021, it warned that this recovery could be knocked off course by bad news internationally. 
 
“As the Swedish business cycle is closely aligned to that of its main trading partners, a deterioration of the external environment would weigh on the export sector,” it read. 
 
Real GDP in Germany and Belgium was also predicted to grow by just 1 percent in 2020, while Italy was expected to see a still more anaemic 0.04 percent growth rate. Every other EU country was predicted to grow faster, with Romania seeing the fastest growth at 3.6 percent. 
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