Year in Review 2011 | Page 15

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