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Sweden's Borg in bold unemployment promise

TT/The Local/vt · 3 Feb 2011, 16:14

Published: 03 Feb 2011 16:14 GMT+01:00

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Currently Sweden, along with Malta, has the EU's most rapidly falling unemployment rate.

Speaking with Sveriges Radio (SR) on Wednesday, Borg painted a very optimistic vision of the future, promising that Sweden's jobless rate will drop from the current rate of 7.8 percent to 5 percent by 2014.

"If a new crisis does not occur, there should be conditions to come down to 5 percent or so towards the end of the government's current term in office. We will belong to the European elite in terms of unemployment," he said.

And while the Swedish National Institute of Economic Research (Konjunkturinstitutet, KI) is skeptical about the forecast, the organisation's head stopped short of dismissing the bold prediction entirely.

"If we have a strong boom in 2014, then we may also have a forecast of 5 percent. However, we usually cannot predict booms and recessions so far in the future. So when we conduct longer assessments, they often include on rather normalised economic conditions in them," KI director general Mats Dillén told the TT news agency.

When asked how Borg can look so far into the future if KI could not, Dillén answered, "I do not know. But he is good."

KI's assessment, which Dillén emphasised is very uncertain, is that Sweden's equilibrium unemployment rate will be around 6.5 percent.

"But it is based on currently known rules and I do not know what the finance minister has thought up, if he has further measures in mind to bring down unemployment," added Dillén.

He also pointed out that a 5 percent unemployment forecast for 2014 is based on a very favourable state of the market or steps that Borg has in mind to push back unemployment.

Story continues below…

According to Dillén, an important factor is the result of wage negotiations that begin in the autumn and continue in 2012.

"One could very well say that we will come down to low equilibrium unemployment such as 5 percent assuming collective bargaining turns out very well," he said.

TT/The Local/vt (news@thelocal.se)

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Your comments about this article

17:38 February 3, 2011 by ISayWhatPeopleThink
""If a new crisis does not occur, there should be conditions to come down to 5 percent or so towards the end of the government's current term in office. We will belong to the European elite in terms of unemployment," he said."

And theeeeere's your loophole.

Hands up if you're betting that in 2014 Borg will be claiming some *insert whatever crisis here* caused the goal not to be reached, but will somehow manage to still tout the failure as a "great success despite circumstances" (even if the unemployment rate goes even higher than now).

Remember kiddos, financial advice given by ponytailed, earring-toting douchebags is probably best taken with a grain of salt.
17:45 February 3, 2011 by kenny8076
wish i had a job!! DO NOT come to Karlstad if you are looking for employment!!!
17:51 February 3, 2011 by miss79
BORG-cut ur hair please
17:52 February 3, 2011 by Great Scott
Yet another village idiot telling lies. So he needs almost 4 years to bring it in line with most of Europe, by this time hopefully the Swedes will have tumbled the lies and he will be on his way.
19:38 February 3, 2011 by Arturio
I dont trust who wear earrings.
21:41 February 3, 2011 by krattan
Conformist bores. I predict the pony tail to be the preferred hairstyle of economists in the near future. :D
00:38 February 4, 2011 by Vetinari
#1 and #5: How did listening to people with professional haircuts and no piercings work out?
08:11 February 4, 2011 by karex
@vetinari - good point.

As Dillén pointed out, Borg needs to reveal what actions he is planning to take. Most certainly, his goal will not be achieved with things the way hey are, they can at best stabilize.

How about starting by decreasing the high tax burdens on employers so they can generate more jobs? Across the board: from the smallest companies to the largest corporations. The less an employee costs to a company, the more of them they can hire.
09:37 February 4, 2011 by Nemesis
The Swedish government has recently made a serious of statements that are similar to and in at least one case a possible cut and paste with names changed to what Irish government ministers said, 4 to 8 years ago.

Have people not noticed that Borg is making speeches, press releases adn pronouncementsthat seem to be from Ireland 4 to 8 years ago. Similar speeches were also made by politicians in Greece, Spain, Portugal, Iceland, Ireland, UK, Italy 4 to 8 years ago.

He is preparing us for a crash.
11:10 February 4, 2011 by Mib
Oh Nemesis....what does Greece, Spain, Ireland etc all have in common. Massive debts. Sweden has debts, but the main difference is that it is much lower than the other countries in terms of % of GDP. Sweden did not have to bail out its banks with billions and billios of Euros like the other countries. Ireland is in such a mess as they have had to borrow heavily to keep their banks going, otherwise the catastrophe would be even worse. And that has led them to being bailed out themselves by the EU and incidentally with a contribution from Sweden!

@ISayWhatPeopleThink - Borg is actually qualified for the job he is doing, unlike others who rely on economists to help them make big decisions.

Also, the average EU unemployment rae is 10%....Sweden is hovering around the 8% plus level. Spain is 20%!!! Only the likes of the Netherlands are doing better where unemployment is 4% and that is the exception.

But, I do think Borg is a bit silly in making such bold predictions. IF he does reduce employers tax and bring in other incentives to employ people and to get people to choose work over staying at home, then he might reach it......
11:51 February 4, 2011 by Nemesis
@ Mib

The money Ireland, Estonia and Latvia got from Swedish banks is significantly less than is owed to those countries by Swedish institutions.

Sweden did prop up its banks and is still paying interest for the mess in teh 90's which it looks like is going to be repeated.
13:48 February 4, 2011 by Luke35711
There is no doubt that some hidden political motifs are behind this PR campaign. I suspect this is aimed at containing Social Democrats whose support was found to be increasing in a recent poll.

Does it say anything about the economy, either good or bad? It probably is says nothing new about the economy.

I don't see how there can be a crash comparable to the Irish one, unless there are some hidden debts that the public is simply not told about. Such as debts taken by banks, or large companies from Asian or middle-Eastern funds,

and hidden by creative accounting. Such recklessness seems unlikely in this old and controlled system.
18:17 February 4, 2011 by Mib

We'll have to agree to disagree. Of course, if Ireland and others went bankrupt, then most European countries would take a serious hit, including the US. However, the EU will not let it happen while they want to protect the Euro. Of course, nothing is guaranteed in life and there is a small chance that a unique situation happens that the banks etc go bust and spirals out of control. But as we've seen with the banking crisis, most Governments will not let that happen as the alternative scenario is a collapse in the economy never seen before. We saw the affect of the US letting one bank disappear...Lehman Bros and that led to confidence crashing and the restriction of capital between banks, which then resulted in borrowing rates increasing and a restriction on lending and it still continues.

The likes of Ireland and Greece are effectively bankrupt as they do not have the economic power to get out of the situation quickly. It will be a generation before they are back on an even keel, assuming no future financial shocks.

I can't see any reason why Sweden will repeat the mistakes of the 90s. The rules brought in the 90s actually protected them to a point from the credit crunch, so what has changed to repeat the 90s crisis? Sweden did not have to bail out any banks. They set up a fund to allow banks to borrow money at reasonable rates, but I believe only 1 took up the offer...mainly as they didn't want to be constrained by the rules in taking that money. But, it showed that they could survive without the help and now we see some Swedish banks announcing record profits...despite ther exposure to the Eastern block.

I believe if there were any skeletons in the fire hidden from the public, the Government would have been exposed by now, especially as it isn't easy to borrow money at least at reasonable rates. The markets tend to notice these things and then raise the lending rates to countries eventually.

If I had a choice of country where I feel reasonably safe economically, I would say Sweden is up there. I certainlywould n't live in Ireland, Greece, Italy, Spain etc.The UK would be an option as they have a larger economy to turn things around much quicker than he likes of Ireland, but the British have and will continue to suffer, although everytime i go back, my friends and family's situation hasn't really changed ecnomically other than it's more difficult to sell their property. But, it will be interesting to see what happens when the UK have to raise their interest rates to battle inflation. That will be the true test, especially as banks are currently charging way above the bank's base rate.
20:07 February 4, 2011 by Nemesis
@ Mib,

Have you ever even been to Europe?

Ireland could pay of the debts if it was not inconvenient for vested interests in Dublin D4.

Bertie Ahern made a deal with Shell and other companies that ensures the Irish exchequer does not get a fair share of profits from resource exploitation.

Ireland needs to implement and enforce now, a Statoil type arrangement for extraction of Irish mineral, oil and gas reserves. That would put enough money into the economy every year to start paying of the massive external debt without attacking the weakest, most vulnerable and poorest in Irish society.

No politician, the catholic church or other vested interest will allow that though. The catholic church owns the majority of the mineral extraction rights in Ireland, since De Valera turned them over to the vatican. That would mean lack of profit for the nazi in the Vatican. Politicians and vested interests in Ireland would never allow that. After all those politicians and vested interests ensured the Irish Taxpayer has paid all the fines for the ass raping of thousands of children and that the banks were bailed out, so they could keep giving bonus's above an ordinary persons lifetimes to already rich people.
15:28 February 5, 2011 by Mib
Well...blame the Irish population and journalists!! If there has been underhand dealings, why has nothing happened? At the worst economic situation in Ireland in modern times and yet is there any investigation or desperate opposition MPs trying to grab money from anywhere to kick start the economy? No...very little if nothing. I'm sure of there is any smoke to your allegations, then Wikileaks will have something on record. They will expose one of the top banks in the US soon....so we'll see what the implications will be.

However, contracts have been agreed and of course Ireland could try to change the contracts,but will probably be taken to court and/or lose credibility and lose potential future investments. It's exactly the same with banks, most countries are too afraid to impose strigent rules to force banks to take more responsibility. That is why any new regulations have to worldwide and not just locally...to stop banks cherry picking countries.

But, I agree there are vested interests. Auditors failed their job as they wanted to keep their customers business....so it's unlikely you're going to bite the hand that feeds you. Politicians often leave to go onto high paying jobs in the private market as they have influence and ways to get around the rules. Governments like the US; UK, France and many more try to influence countries via threats, promises etc etc. That is why Wikileaks scares the S so much that they have politicians stating in public that Assange should be assasinated. None of this will really change unless the population like in Egypt, Tunisia, Yemen etc have an uprising to state that enough is enough....but most people are too comfortable or busy with their lives to care or protest and hence the corruption continues. Even in the Vatican, who portray christian values, yet cmmit sickening abuse towards children and then try to hide it. Sick, sick & sick!
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