Giulia Guazzaloca - 12/04/2012

     While many Swedes are sceptical about European economic and monetary integration and they are hardly confident about the recovery of the Euro area (as has been illustrated in a recent article on this web site), several analysts and economists have often evoked, in the past few months, the “Stockholm model” suggesting, above all to the crisis-hit countries of the southern shores of the continent, they should follow the example of the Swedish system, which in a short space of time has managed to bring back to normal the monetary and fiscal policy, and is equipped with an efficient and lean welfare system supported by continually growing exports.

     The Swedish economy has indeed emerged from the financial crisis of the past few years as one of the strongest and most competitive at the global level and, also thanks to a generous and inclusive system of welfare services, the standard of life of the Swedes is on average among the highest in the world. According to the World Economic Forum, which measures the economic competitiveness of over 140 countries, Sweden today is in third place after Switzerland and Singapore; in the ranking of economic freedom it is in twenty-second spot in the world, among the “mostly free” countries (Italy in 2011 came 87th, dropping 13 places as compared with 2010).

     With its GDP having risen by 3.8% overall as compared with 2010, inflation at 2% and the public debt at 37.3% of GDP, in 2011 Sweden recorded a positive increase in all the main economic indicators, from expenditure for domestic purchases to exports, from investments for public services to the number of employed people. The percentage of unemployed people is around 7.8% (February 2012) and, albeit slowly, it is continuing to fall, to the extent that it is estimated it could reach 6.4% in 2013; even if, in proportion, youth unemployment is still very high, at 25.2%, it is still falling in respect to 2011 and the government has set up specific programmes to help young people to enter the labour market.

     How do the experts explain this virtuous trend, when in 2010 even the Swedish economy was heavily affected by the world crisis? First of all, because the political response was quick and effective, without excessive interventionism, but with targeted measures for the weakest sectors and those at most risk; while the Riksbank was constantly vigilant in regard to inflation, the government intervened in the labour market, without however undermining public accounts. Also, after the great economic crisis that the country went through in 1991-93, a strict programme of budget recovery was adopted and a rigid, but transparent, fiscal policy towards which a diffuse consensus was engendered.

     Then for many observers the true resource of the Swedish model is believed to lie in the flexibility of its labour market, with easy access to part-time jobs, relatively low costs for mobility and limited redundancy periods; for the economist Elsa Fornero, the current minister of labour in Italy, Sweden represents, on a par with Denmark and the Low Countries, an example of “good flexibility” in relation both to worker mobility, and to the retirement moment and the model. With the first welfare measures dating back to the 19th century, Sweden is historically one of the cutting edge countries for its welfare system, which offers broad coverage of services to all the citizens and by now represents one of the fundamental pillars of the “citizenship pact.”

     From here, however, comes an important lesson: not always do a generous welfare and a universal health system mean accounts in the red for the State or free cover for all the health services. Indeed, people in Sweden pay a charge both for hospital admissions and to see the general practitioner, while the drugs become totally free only for expenditure over 450 Euros. A lot then is to be learnt, and not only for Italy. Also as regards the gender policies, seeing that, above all since the 1970s, the Swedish governments have promoted important measures to guarantee equality between men and women (in the educational, working and political fields), as well as social policies for the safeguarding of mothers and children and for a greater presence of fathers inside the family (the paternity leaves were introduced in the 1990s). Today around 45% of the members of the Swedish Parliament are women (in Italy just 20%). Female employment is almost at the same levels as male employment and more women than men undertake university studies. Of course, the Swedish model is virtuous from many standpoints, yet some shadows linger there as well.

     The labour market is still divided between the sexes: in some professions only men are employed and around 40% of women are employed in low profile part-time jobs. On the economic and financial level, furthermore, Sweden has certainly been helped by the fact of having its own currency, which was brusquely devalued in 2008; and to emerge from the crisis once and for all will not be easy for the Swedes either, who find themselves dealing with strong inflation in the real-estate sector and liquidity problems in the banking sector. One point, however, is clear and Sweden and all the countries where there is growth prove this: in order to overcome the crisis it is necessary to reform the system and put public finance back in order.

Giulia Guazzaloca 
(University of Bologna)