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Sweden’s election result – chink in the Scandinavian model? Sweden’s election result – chink in the Scandinavian model?
by Satya Prakash
2006-09-21 22:11:55
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The results of Sweden’s general election, though revolutionary wasn’t much of surprise. In the days leading to election, it was increasingly getting clear that incumbent Social Democrats party will be ousted from government. The party, led by Prime Minister Goran Persson has been in power continuously for past 12 years. It was overthrown yesterday, by the centre-right alliance under the leadership of Fredrik Reinfeldt, who is set to become the new prime minister.


sweden01_400 On paper, it is difficult to find out why the government of Prime Minister Goran Persson failed to win? The GDP growth of Sweden is around 5.6%, the highest in Europe, and Sweden is the shining jewel of the Scandinavian model. This Scandinavian model, which is the best example of a welfare state was under attack (milder than 2002) by the opposition party. So are we going to see the collapse of Scandinavian model?

For the last few years, mainland Europe has always been looking at their northern counterparts with admiration for their high fuelled economy, along with the best social security that any country could offer. In fact last year, when there was spat between England and France, over the Anglo-Saxon and Franco-German model, this North European model or Scandinavian model, was touted to be the best model to follow. This amount of extensive social security comes at a price; people in this region pay the highest amount of tax. Also the government holds the monopoly in few sectors, making it possible for them to generate revenue to meet the cost of social benefits. Other countries of Europe, like France and Germany, they also have fair amount of social security benefits for its citizens, but they are now getting over burdened with it. The industries in these countries are threatened by those from free market economies of the global world. Among all this, the Scandinavian model was the one every one looked upon for social security as well as prosperity. In fact in Sweden, it was encouraging enough for people to even remain unemployed and get benefits than to be in a regular job.


So the election result of Sweden, which brought to power a party which never approved the high social security coverage, may reduce the charm of Scandinavian model. The PM to be, Mr Fredrik Reinfeldt has announced reduction in social security benefits, lower tax rates and also to end government control of economy in certain ways. Though Mr Reinfeldt is not expected to take any drastic and dramatic change in the model, the trend he starts will be of interest to many other countries. May be, he has just exposed the chink in the Scandinavian model.


  
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Thanos2006-09-20 08:18:02
The same things said the keskusta goverment in Finalnd but in the end ...nothing really changed!


Nuthin...2007-06-20 01:37:03
The success behind the Scandinavian Model (strong Social Security) is because of their strictest of immigration rules compared to other European contries. Because of their closely monitored entries into the country and die-hard regulatory environment,the economy is dragging along relatively well. One should not forget the natural resources (Sweden) and Oil (Norway) these countries have. With so less a population and a closed economy, the model is likely to be a success in a longer time to come.
Guess had made this comment longer than the post..See ya! :)


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