Page 46 - Bloomberg Businessweek July 2018

◼ ECONOMICS Bloomberg Businessweek July 2, 2018

As in Germany, there have also been reports Slowing, But Saving
of rising crime rates, deteriorating schools, and Sweden GDP growth, Sweden’s budget surplus,
packed health clinics. The number of Swedes year-over-year as a share of GDP
having to wait 90 days or longer for an operation
or specialized treatment has tripled in the past 4% 2%
four years. “The Swedish social contract needs to Forecast Forecast
be reformed,” a dozen entrepreneurs, including
Nordea Bank AB Chairman Bjorn Wahlroos and
Kreab founder Peje Emilsson, wrote in an op-ed 2 1
in the newspaper Dagens Industri on May 31.
“Despite high taxes, politics isn’t delivering its
part of the contract in important areas. We get
poor value for money.” 0 0
It’s not only business executives who are 2015 2021 2015 2021
complaining. Carl-Fredrik Bothen, a resident of
Stockholm who’s on a six-month paternity leave a politician’s mouth anywhere but in Scandinavia.
to care for his baby girl, worries that his pension Yet polls show that Swedes’ tolerance for taxes is
may be in jeopardy. “I don’t trust welfare at all. waning: In a February survey by Demoskop AB, the
I need to build my own capital,” he says. “The proportion of respondents who say taxes are too
problem with immigration is that our welfare high jumped to 45 percent, from 27 percent in 2014.
state is not quite dimensioned for it. Of course we There’s also a general perception that taxpay-
should help people, and we have a good situation ers are getting less for their money. In the southern
here in Sweden, but we can’t handle an unlimited part of Lapland, a single police car patrols an area
amount of people.” almost the size of Denmark. That might have been
From the vote for Brexit to the election of Italy’s enough in the past, but Camilla Appelqvist, a store
ILLUSTRATION BY 731; SPOT ILLUSTRATION BY NICHOLE SHINN; IZABELLE NORDFJELL/TT. DATA: SWEDISH NATIONAL FINANCIAL MANAGEMENT AUTHORITY; STATISTICS SWEDEN
new populist government, there have been warn- owner in the village of Dorotea (population 1,500), 29
ing signs across Europe of what can happen if this says times have changed. She’s had three break-ins
sort of discontent goes unaddressed. With Swedish since February in which the intruders cleared out
national elections set for Sept. 9, polls show a her stock of tobacco and snuff. When she called the
slump in support for the ruling Social Democrats. police about the most recent incident, at 3:30 a.m.,
In two recent surveys, the Sweden Democrats, a she was told there was no officer on duty and one
party with neo-Nazi roots, commanded more than would be dispatched the next day. “We have put
25 percent support, though political analysts are bars on all the windows,” Appelqvist says. “We have
fairly confident that established parties will band really caged ourselves in.”
together to form a government. In Solleftea, demonstrations against the
Since coming to power in 2014, the Social maternity ward closure are heading into the
Democrat-led government has rolled back some 18th month, with a small group of protesters ▼ A sign protesting the
closure of a maternity
income tax cuts instituted by the previous admin- trading shifts day and night. To mitigate the ward in Solleftea
istration, arguing that the country needs to pre-
pare for possible downturns. Sweden’s population
is expected to rise by 1 million people, to 11 million,
in the 10 years through 2028. That’s driven by an
increase of 231,000 in the number of children and
young people and 309,000 in retirees.
The total tax burden in Sweden rose to
44.1 percent of GDP in 2016, from 42.6 percent at
the end of the previous government’s tenure in
2014. That’s the fifth-highest among the 35 coun-
tries in the Organization of Economic Cooperation
and Development. “I don’t think the level of taxes
we have today is the absolutely highest we can
have,” Fredrik Olovsson, a leading Social Democrat
and chairman of the parliament’s finance commit-
tee, said at a recent seminar in Stockholm.
It’s hard to imagine such words coming out of