Hitt og þetta 15. september 2006

DJ THE SKEPTIC: Swedish Models

By Robb M. Stewart


LONDON (Dow Jones)--The political pendulum in Sweden seems to be swinging to the right. But in this understated Scandinavian country, it's easy for foreign observers to overstate change.

The country casts its vote Sunday on the fate of the Social Democrats and long-serving leader Goeran Persson. While polls in recent weeks suggest a close run race, the majority tip the opposition Alliance. They also put the undecided vote at as high as 20%.

There is an echo of September 1991.

In an election foreign newspapers and politicians argued confirmed the growing disillusionment with welfare ideals, the Social Democrats were ousted. It was the party's worst setback since 1928, forced the resignation of leader Ingvar Carlsson and was - wrongly - hailed as the end of an epoch.

The Social Democrats were back in 1994. And they have held power since. Indeed, the party has run the country, alone or in coalitions, for 65 of the last 74 years.

When the opposition held power under Carl Bildt between 1991 and 1994, the krona slumped, interest rates jumped and the state had to prop up banks.

By contrast, Persson's reign has been characterized by low inflation, a budget deficit the envy of most European governments and strong economic growth - much to the consternation of the right since the Social Democrats have also maintained free education, universal healthcare, six-week vacations, 16-months paid parental leave and big government.

But there are cracks in the Social Democrat model.

The right-leaning Alliance, led by Fredrik Reinfeldt of the Moderate Party, has adroitly attacked on the left's Achilles heel - unemployment.

Persson's government has struggled to get the jobless figures down. Despite the strength of the economy, an estimated one in five Swedes isn't working full time. Absenteeism is rife and there are those lost in the system, addicted to the generous unemployment benefits.

His response: the Social Democrats have promised SEK25 billion in new spending to increase jobless benefits, plus reduce daycare and dental costs and build housing for the elderly.

The Alliance, meanwhile, has promised income and corporate tax cuts of roughly SEK50 billion which it will help finance with cuts in unemployment and sickness benefits.

But elsewhere Reinfeldt and his cohorts aren't attacking the "third way" of socially liberal and economically orthodox social democracy popularized in the late 90s when Persson returned to power, Tony Blair led in London, Bill Clinton walked the White House and Romano Prodi ruled in Rome.

The Moderates have erased their racist and right-wing image of the turn of the decade, and crafted a message around a call for modest change that doesn't threaten the Swedish model. Experience has taught the right that questioning Sweden's fundamentals, proposing radical cuts in taxes and talk of scaling back the social support network don't win votes in conservative, moderate Sweden.

This softly, softly approach may be enough to win over those voters looking for a change after a decade of Persson.

But past elections have seen grumbling Swedes enter the polling booths only to take the safe option of returning the Social Democrats to power. And even if Persson is voted out, it's unlikely the country will see sweeping changes.

(Robb M. Stewart, founder of the Skeptic column in 2001, has reported for Dow Jones Newswires since 1997 from Sweden and the U.K. He can be reached at robb.stewart@dowjones.com)

(END) Dow Jones Newswires

September 15, 2006 10:24 ET (14:24 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

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