The Swedish Lesson

Le Monde | Editorial

Monday 18 September 2006

In Sweden, the Social Democratic left has governed 64 of the last 75 years. Consequently, its defeat in the legislative elections on Sunday, September 17, is an event. The coalition on the right, baptized "The Alliance" and formed by four parties, should obtain 178 seats in Parliament versus 171 for the left. Its leader, 41-year-old Fredrik Reinfeldt, is going to become prime minister.

The left's defeat is foremost the defeat of Göran Persson, prime minister for ten years. He is reproached with having irritated the Swedes by conducting a too solitary, even an arrogant, campaign. But the reasons for the Swedish political turnabout are profound. This country posts good economic and social results. Its growth (3.4% expected this year) is clearly superior to the European Union average; inflation is low. During the 1990s, the government effected reforms (of pensions) and a complete restructuring of the welfare state that allowed it to maintain solidarity at the highest European level, all the while moderating government expenses.

The Swedes do not question the principle of this "Swedish model" of high taxes and low inequalities. They are attached to those principles. But the Alliance struck employment: the unemployment rate of 5.7% is obtained after many would-be workers emerge from the statistics classified as handicapped or "in training." For the Alliance, a million Swedes are "excluded" by these means from the employment market, and the real unemployment rate would be around 15%. On top of that, the right accused the left of encouraging abuses.

That campaign paid off. The Swedes do not want to abandon the welfare state, but they fear that too much "parasitic" behavior will disrupt its financial equilibrium.

Fredrik Reinfeldt should not disrupt the "Swedish model," but he has committed himself, nonetheless, to inflect employment policy so as to incite the Swedes to work more. He also expects to encourage certain privatizations (SAS, the banks, gaming ...) and to reduce several specific taxes (hiring taxes, taxes on services provided in the home ...).

Sweden is observed with interest, and often envied, for having rejected "reinvention" of the social democratic model by succeeding in coordinating a very efficient private sector (strong research and development and high productivity) and a large, but modernized, state sector (30% of employees). Göran Persson's defeat proves that, in spite of incontestable success, this strategy of strong social assistance too often leads to dampening employment. It's an intrinsic shortcoming that the Swedish left clearly delayed correcting. It's also a lesson for the European left.

Translation: t r u t h o u t French language correspondent Leslie Thatcher.