When in 1992, after fifteen years of Socialist government in democracy, the majority of Swedish citizens voted for a coalition of liberal, conservative and Christian Democratic parties, the situation that the new rulers found themselves in had a great economic and social parallelism with the current Spanish situation after eleven years of Socialism. The taxes absorbed nearly two thirds of the GDP and an average employee or qualified industrial worker handed over more than 50 percent of their salary to revenue. The enormous monopolizing of civic life by the State was such that that entity of state reason tried to organize and look after everything from its birth to its death trying to build, with planning, a new artificial earthly paradise. Although the social services had been universalised, this did not mean that they were improved and more effective. The biannual waiting lists in hospitals, for example, also began to be widespread. As the Lindbeck commission later explained, the State had assumed numerous tasks in the previous phase that it was unable to suitably carry out and had neglected those that should be the central nucleus of its action. Interest groups exercised control on decision mechanisms that meant in practice a growth of public expenditure in their favour, at the cost of the general interests to which they claim to serve.

So many decades trying to implant the protective and welfare state had ended in state annoyance among citizenship and the extension of a widespread " state of uneasiness." Subsidized passivity had led to important increases in national debt and it only produced higher interest rates, inflation and unemployment. Sweden found itself, in spite of its tradition of technological excellence, on the dark and tedious road of economic decline.

The task the new coalition endorsed democratically by the urns had before it was, and is, imposing. However, they got on with it. The savings plan that was started was unprecedented in Sweden. The total cuts in public expenditure ascended to 85.000 million krona that represented 6% of the GDP. A plan was started in turn to gradually eliminate the structural deficit for 1998. The Parliament will decide first on the total amount of income and expenses before entering in the partial discussion of each entry, so that the propositions of expense increase in some points will only be possible by making cuts in others. Together with these restrictive measures of fiscal policy they established important measures in the direction of supply so that those were more effective and convinced that government finance was preparing the way towards economic recovery. A special point is also made in the independence of the Bank of Sweden in the coordination of monetary policy and the City councils were obliged to submit the new tax rises to referendum.

The new Swedish prime minister Carl Bildt affirmed that they were firmly resolved to liberate wealth-creating forces in the economy and that because of that they had to improve the managerial environment to insure that productive virtues such as work, saving and venturesome spirit were properly fostered and compensated. Income tax was cut and taxes on patrimony have almost been eliminated. The labour market is liberalized and the acquisitions of the public sector are exposed more and more to private sector competition. In turn, many state industries will be privatised in order to obtain a broader shareholding and improve in this way their effectiveness. Thanks to the reform in the budgetary area and in that of Social Security, increases in productivity and the fall of the Swedish krona, competitiveness has improved notably in 1993 and industrial production and exports will also increase substantially in 1993 and 1994.

If our socialists imported the utopian Welfare State from Sweden, it would not be at all surprising if, before the dramatic situation of government finance and the real Spanish economy, we had import the new Swedish model of economic rebirth. For all that, independently of who or which party governs in Spain, but especially if the Partido Popular is chosen: Attention to Sweden!

Joseph John Franch Menéu
Gaceta de los Negocios, Tuesday June 8th 1993