European leaders want to know how Sweden and its Nordic neighbors, so heavily laden with cradle-to-grave welfare systems, float high above the struggling economies of much of the rest of the Continent.Actually, it turns out that, to noone's surprise, you should take the declaration of any government (of any entity, really) with a grain of salt.
Finland, Sweden, Denmark and Norway are rated among the top six for competitiveness by the World Economic Forum and score highly in just about every international comparison on living standards, education and health care. The Nordics are outpacing the European average in economic growth and, remarkably for countries with such large public sectors, all have budget surpluses.
How do they do it?
…Economists say the Nordic countries have a solid footing today precisely because they went through a wrenching period of restructuring in the 1980s and 1990s that opened them to increased competition. Unprofitable manufacturing industries were winnowed out while research and development was increased to buttress high-technology industries. The service sector was built up, and government programs like pensions and unemployment benefits were reined in. Today, unemployment is manageable - although some economists question the figures. Productivity, a measure of how much each worker produces, continues to increase faster than the European average.
Hans Karlsson, the minister of employment in Sweden, attributes his country's progress to the acceptance that unions show toward a fast-changing world. Unions in Scandinavia generally reject protectionism and consider outsourcing a fact of life.
…"Workers in Sweden don't try to prevent restructuring," Karlsson said, adding that they know they have a cushion to fall back on.
The Nordic success stories are being enviously tracked by leaders in the flat-line economies of France and Germany because they appear to prove that, yes, you can have it all: generous unemployment benefits, cheap child care, free education and health care - and a healthy economy and government finances to boot.
Social services come with a cost, of course. Taxes in the Nordic countries represent approximately 50 percent of gross domestic product, compared with about 35 percent in the so-called Anglo-Saxon countries. But citizens here seem willing to put up with higher taxes if it means they know they will be taken care of.
The Nordic model also appeals to many politicians on the Continent because it is a counterpoint to the Anglo-Saxon-style system of smaller governments and larger private sectors.
…But in an article released by a Brussels research group on Tuesday, Rasmussen warned against "bad karaoke," by which he meant other countries' trying halfheartedly to imitate the Nordic model. Countries must realize that policies alone are not the answer because the Nordic model is above all a spirit of cooperation between workers and employers.
Naturally, there are skeptics who attribute healthy-looking Nordic balance sheets to luck and good timing as much as good policy. Demand for the main commodities and products exported from Nordic countries is strong: oil from Norway, steel from Sweden and pulp and paper from Finland. The region also benefited handsomely from the technology boom, especially for companies like Nokia of Finland and Ericsson of Sweden.
"I'm trying to ring the alarm bell," said Marcus Storch, chairman of the Nobel Foundation and formerly chief executive of the large Swedish chemical company AGA. "We had a number of lucky things coinciding, but they won't last much longer."
Storch said that the tax system in Sweden, which was overhauled in the 1990s, was still too burdensome for companies, leading to a hollowing out of the country's industries. Companies with roots in Sweden, like Ikea, Tetra Pak and Skype, do not operate from Sweden mainly for tax reasons.
Fredrik Reinfeld, leader of the opposition conservative party in Sweden and a candidate for prime minister in elections next year, says that some of the economic data are misleading, like the jobless numbers, which he says do not account for people on disability leave.
"We have put aside a lot of people who look as if they are not unemployed," he said.
Economists say the same criticism is valid for Denmark, which has tens of thousands of people in government-sponsored work-retraining programs.
Stefan Folster, chief economist of the Swedish employers' confederation, is also concerned about the long-term health of the Swedish economy and argues that smaller companies are hardest hit by the tax system because they have not been given the same tax breaks as bigger companies.
"The real Achilles' heel for Sweden is small firms and entrepreneurs," he said.
But most economists are not as pessimistic.
[Still, there] are signs that tax rates are creeping back up but nowhere near the levels of the 1970s, when Astrid Lindgren, the late author of children's books, was found to be taxed 102 percent - meaning that she paid the government more than she earned.
… "We had a very generous system in the 1970s, but by the end of the 1980s we realized that there was no way that we could actually afford it," said Gunnar Wetterberg, head of the policy department of the Swedish Confederation of Professional Associations, a white-collar trade union. "Little by little, I think people are beginning to understand that the state will provide a safety net but that they will be more left to look after themselves."
Policies are by no means uniform in the Nordic countries. Sweden and Denmark, for example, have very different employment policies: The Danish system allows workers to be dismissed with little notice or recourse, whereas the procedure for firing or laying off employees in Sweden is, by comparison, cumbersome.
But layoffs are generally accepted by Nordic unions as a fact of life in a fast-changing economic environment.
"Unions accept the idea that there will be fewer and fewer workers - that technology will replace them," said Klas Eklund, chief economist of the Swedish bank SEB. "This has very deep roots."
Workers have a more participatory attitude in their economies because for centuries important decisions have been made at the lower levels of government and workers feel more involved, economists say. …
Regarding Sweden, meanwhile, some guy (?) named the Radical has a post on Muslims in Malmö.
In a (somewhat) related article, Thomas Fuller adds that
Bogumil Bialous is a Polish computer programmer who has traveled as far as Malaysia and Venezuela to install specialized billing systems at mobile phone companies.
But he's not sure about the legality of doing the same installation job in France or Belgium, two hours away by plane.
"I'm not a legal expert," he said. "There could be some technical issues."
It may seem absurd that a Polish citizen could face more obstacles traveling on assignment within the European Union than to Kuala Lumpur or Caracas, where he was sent by his former employer, a British-based software company.
But a year after the EU's expansion, a cloud hovers over the question of who has the right to work where and for how long.
"There's tremendous confusion," said Daniel Kasmir, the European human resources director for Manpower, the employment services agency. "At the moment on a practical basis you see companies muddling through."
Experts on employment law appear to agree on one thing: In Europe, when it comes to mobility there is the law and then there is reality.