‘What is your economic crisis Policy eeh? You Socialists noise makers?’ – Borg!

Wednesday, 20 June 2012
The Swedish finance minister is not happy with the Social Democrats criticising his policies without presenting an alternative. ‘What is your own economic crisis policy?’ the minister ponders as he debate about his government’s proposal to prepare Sweden for the future that will make the country withstand shocks heaped by the darker economic clouds still seen on the horizon

The crisis in Europe is hitting Sweden hard given that it has a smaller domestic market and must export to survive. As Europe dives deeper and there is more talking than acting, keeping the euro-zone economy at free fall and weakening confidence, the governing Alliance coalition's efforts for jobs and growth have crumpled. As they try to seek other avenue, the minister and his Alliance coalition partner who have just recently received a pay hike, sent a swipe at the Social Democrats and its own Red- Green opposition coalition as asked them “what is your economic policy?”

In an article written on the Swedish business daily, on Wednesday which follows the debate in the Swedish parliament about the for the coming government budget proposal for Spring Fiscal Policy Bill ,the minister said that Sweden must be protected from any shocks caused by the persistent Euro crisis. As such “this is the time for the Opposition lead by the social democrats to speak about their own policy,” writes Anders Borg and the alliance's economic policy spokespersons.

Today in the parliament, the debate on the Government's Spring Fiscal Policy Bill will be open for discussion. “On behalf of the Alliance coalition, we will highlight the importance of fiscal sustainability, measures to put more to work - especially young people, and conditions for companies to hire and grow,” writes the finance minister on behave of the Alliance’s economic policy.

“In an uncertain environment the Swedish economy still remains strong. It is important that we have good safety margins in the public finances should there be an even deeper crisis.”

If the crisis in Europe deepens, the minister feels that it will take the Swedish economy down with it because Sweden depend on its for about 50 percent of its GDP and about 70 percent of its exports go to European countries. Sweden has therefore continued to need its safety margins in order to meet a possibly deeper crisis.

Strong international organisation such as the IMF and the EU Commission, (whom by the way, did not spot the arrival of the last financial crisis) hold that the government's fiscal stance remains appropriate.

In the process of getting Europe back on its feet, Sweden will play an active role. Their experience gained some 20 years ago where Sweden and the Nordic countries fell into troubled economic waters means that they could sell to the southern troubled countries. Sweden and the Nordics learnt their lesson, the Southern European countries did not learn and their economies have fallen into chaos.

The way to restore confidence must be characterized by vigorous handling of the imbalances in these economies. In parallel, crisis countries should have a reasonable time to put their public finances in order. But reform requirements on these countries must also be clear.

Many of the crisis countries are characterized today by major imbalances in the banking sector. Large debts have built up in the wake of lax fiscal policies and excessive risk taking. In Sweden, the Alliance government tightened capital adequacy requirements for banks to increase their resilience to crises. The rules for the banking business have tightened up and the government has significantly increased resources to the Swedish FSA.

A stabilization fund has already been introduced in the future to fund measures to restore the failing bank to financial stability without the taxpayers needing to suffer. Most EU countries have some kind of system to protect customers in case of banking crises, and Sweden is one of the few EU countries where it is pre-funded. Today we have clear principles of crisis management that protects citizens and forcing bank owners to bear the losses from moral hazard, not taxpayers.

The minister continues that when the alliance government is proposing to reduced corporation tax so as to for the strengthen the development of Swedish industry, the opposition is instead proposing to introduce measures which would result in significantly increased costs for companies, especially in rural areas.

Only the Social Democrats propose tax increases on people working with over Skr20 billion and the Left as the Green Parties in the Red green coalition want to increase tax even more. “That would not make Sweden stronger in a troubled world.”
So the social democrats what is your economic policy in times like this?
By Scancomark.se Team

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