“He’s warned that next year’s budget will have a deficit of 1.5 percent of GDP. Yet at the same time he puts 25 billion kronor ($3.8 billion) aside for reforms with 16 billion earmarked for tax cuts,” columnist Mona W. Claussen wrote in Norwegian daily Aftenposten.
“This is the equivalent of giving Pippi Longstocking amphetamines.”
Borg, who has been Sweden’s minister for finance since 2006, was praised in 2011 by the Organisation for Economic Co-operation and Development (OECD) for managing an economy as strong as the Pippi Longstocking – “the strongest girl in the world” and a children’s favourite invented by Astrid Lindgren.
In the same year he was named Europe’s top finance minister by the Financial Times.
However, his autumn budget has attracted criticism with early indications he needs 25 billion kronor to support a gradual recovery.
In June the National Institute of Economic Research (NIER) estimated that Sweden had about six billion, not 25 billion, to play with in its autumn budget.
“We will use the strength of our public finances to energize and support a recovery. At the same time we will maintain safety margins. Laying a firm foundation for recovery is key to driving unemployment down,” Borg said in a recent statement about the budget.
He has come in for praise in the American media with the Washington Post in a recent editorial titled “The Swedish model for economic recovery.”
“It has become a paragon of sensible economic and social policy,” said C. Fred Bergsten who is a senior fellow and director emeritus at the Peterson Institute for International Economics. Bergsten added that Barack Obama’s decision to visit Sweden this week was “brilliant”.
“Sweden escaped the crisis in its neighbourhood, and it quickly restored steady and stable growth,” he said.
“It presents a proven model for the types of reforms needed in much of Europe and many other parts of the world, including the United States.”
Barack Obama arrives in Stockholm on Wednesday, bringing with him enough security to cause what authorities have warned will be chaos.