Sweden - A Rock Star Recovery
The financial crisis and global downturn of 2008-09 shook
the world and turned many lives upside down. We can
still today feel the aftermaths and for many the struggle
is far from over. However, there are exceptions. In June
2011 the Washington Post published an article on Sweden
– “The Rock star of recovery” and left readers marveling
over how a country of a mere 9 million inhabitants could
have come out on top leaving behind many larger and far
more influential countries, including the United states.
In the 1990s, Sweden was hit by a recession after a collapse
in commercial real estate and with a budget deficit so large
that the country experienced trouble borrowing money.
As a result of years of double-digit inflation, the Swedish
central bank, Riksbanken, lacked credibility in financial
markets and in a futile effort to save the value of Swedish
currency, the Krona the central bank raised the target
interest rate by a staggering 500 percent.
What Sweden learned from these years of financial hardship
was the importance of addressimg the underlying causes
of the crisis and create a more resilient economic and
financial system to help tackle future bad times. A future
goal of a 1 percent budget surplus over time was agreed
upon and adheard. This meant that when the recession
of 2008 hit, the budget surplus acted as a cushion in the
falling economy. By using the nation’s welfare system, a
carefully designed set of programs established during good
times, a reserve to help soften future economic blows can
gradually grow on its own, and be at the government’s
disposal at the first ominous sign.
In the U.S. $800 billion fiscal stimulus legislated in early
2009 consisted mostly of special one-time programs for
which it took months to begin distributing money to where
needed. As a result, the fiscal stimulus didn’t kick in until
months or in worst case scenario, years after the economy
had actually collapsed.
With that being said, Sweden did not miraculously escape
the worldwide crisis but unlike many other countries, they
were able to bounce back faster than most. Sweden could
in the second quarter of 2011 show a growth rate of 4.4
percent whereas the equivalent in America was only 1.6
percent . As qouted in the Washington Post on June 24
2011, Cecilia Hermansson, chief economist of Swedbank
said “burn your tongue once on hot milk and you will start
blowing on yogurt”, and even though the rest of the world
dealt in risky real estate lending in the mid-2000s Sweden,
with the severity of the 1990s fresh in mind, had learned
their lesson and stayed on the sidelines.
The Royal Life- a new princess is born
On Walpurgis Night 2011 King Carl Gustaf XVI turned 65
and even though the confidence in him as a monarch has
declined, he will continue on with his obligations. A couple
of month after the King’s birthday, the Crown Princess and
her husband Prince Daniel Westling announced the arrival
of a baby and on February 23, 2012 princess Estelle Silvia
Ewa Mary, was born.
In November of 2011, the Prince was in Wilmington, DE, for
a reception and met SACC-Philadelphia board member Britt
Apell.
Written by Emma Weiner