The Militant(logo) 
    Vol.61/No.19           May 12, 1997 
 
 
Swedish Gov't Tries To Deflect Resistance To Austerity  

BY CARL-ERIK ISACCSSON
STOCKHOLM, Sweden - With unemployment reaching record levels and elections coming up next year, the Social Democratic government here is attempting to deflect working- class resistance, while at the same time continuing its austerity measures.

Prime Minister Goran Persson has promised to cut unemployment in half by the year 2000. The Social Democratic Party, which had been firmly opposed to shortening the workweek to fight unemployment, is now opening a discussion on a shorter workweek with less pay. Although the economy still is supposed to be in an upturn, in March this year unemployment reached 8.4 percent, up from 7.4 percent a year earlier. If workers in government job relief programs are added, the level rises to 13.3 percent.

Among construction workers, who in January organized a demonstration in Stockholm of 8,000 protesting unemployment, 35 percent are jobless. Recently Ericsson, one of the world's biggest telephone companies, announced it would close a big part of its operation in the Swedish town of Norrkoping. Some 1,700 workers will lose their jobs in Norrkoping.

Strikes and protests called by the unions have become more frequent over the last two years, which is rare at a time when the social democrats are in government. In most cases the employers have had to make some concessions to the strikers. The bosses have responded with a campaign for restrictions on the right to strike, portraying themselves as victims of strong unions that cripple them in the competition on the world markets.

Recently eight unions, including the metal workers, signed an agreement with four employers' organizations giving a so-called neutral chairman the power to postpone strikes that have been called. The government has also proposed a review that would lead to increasing the powers of government-appointed labor mediators.

The Social Democrats, who took office in 1994 with more than 45 percent of the votes, have had less than 30 percent support in recent polls. Meanwhile, the Conservatives headed by Carl Bildt have polled more than 30 percent, up from 22 percent at the time of last elections. The next general election is scheduled for September 1998.

It is in this context that the Persson government has promised some 4 billion kronor this year and 8 billion in 1998 to local governments, supposedly to create jobs. A decision to raise unemployment benefits from 75 to 80 percent of pay in October, while tightening eligibility requirements, is also aimed at winning electoral support. Likewise, the government is discussing raising sick-leave payments from 75 to 80 or even 90 percent of pay.

The minister of taxes, Thomas Ostros, argues that government austerity policies must continue in order to achieve a budget surplus and create jobs. The jobs he is talking about are supposed to come from having people work for their benefits, replacing workers who accept early retirement.

To govern with a minority in parliament, the Social Democrats have sought an alliance with the Center Party, which is based in the small agrarian bourgeoisie in Sweden and has gained the support of some "environmentalist" middle- class urban layers. To cement that alliance, the government announced in February it plans to close two nuclear power plants in Barseback, outside the southern town Malmo. The decision was in line with a national referendum that was adopted in 1980, which calls for decommissioning nuclear power facilities in Sweden by the year 2010. So far, virtually nothing had been done to start the decommissioning of the 12 nuclear power plants that supply half of Sweden's electricity.

The government ran into a hail of criticism for the nuclear decision from both employers and the union officialdom. One hundred company executives issued a public letter criticizing the government, saying it was dealing a blow to employment and economic growth.

Uncertainty over the planned European monetary union (EMU) is also a cause for concern for the Swedish rulers. Between late February and mid-March, currency markets across Europe were hit with waves of speculation, set off by rumors of possible delays in the EMU and doubts as to whether Italy and Spain would be among the countries that will qualify.

This was a moment of truth for the social democratic government in Sweden. Was the economy as strong as they believed? After a meeting of the European Union finance ministers in Brussels March 17, Swedish finance minister Erik Asbrink complained, "Interest rates have gone up in several countries in Europe, but we have been affected a bit more than others and this is cause for concern. Our economy is fundamentally in good order and our goal is unchanged: a balanced budget in 1998 and after that a surplus. I therefore see no real reason why the interest rates are going up."

The SGZ bank in Frankfurt, however, has estimated if the EMU is delayed, the Swedish krona and the Finnish markka will be hardest hit of the currencies in Europe, because these currencies have benefited the most from the fantasy that the monetary union would come to pass. Looked upon with sober eyes, they will be lumped together with Italy and Spain, as they were during the crises that rocked the currency markets in Europe in 1992-93.

Meanwhile, both the Social Democrats and their Conservative opponents have stepped up their anti-immigrant rhetoric, scapegoating workers from other countries for the high unemployment. The government has offered 10,000 kronor to each person who returns to where they came from. This is especially directed at the 55,000 Bosnian refugees in Sweden, the 12,000 refugees from Somalia, and about 2,000 from Kosovo. Deportations continue, as do protests against them. The Conservative party is campaigning for more open borders, but with the proviso that immigrants should not have the same rights as Swedish citizens.

Stockholm has played a big role in the imperialist intervention in Yugoslavia, both providing troops for the NATO occupation force and having former Swedish prime minister Bildt head up the so-called civilian side of the operation in Bosnia.

So far, Stockholm has not provided any troops for the military intervention in Albania. "We are prepared to organize humanitarian operations and a police force if it is necessary," Persson said after a meeting with Italian prime minister Romano Prodi at the end of March. Later, Stockholm decided to send 10 police and a dozen military officers as advisers, and promised to send supervisors for the elections there. An editorial in the conservative daily Svenska Dagbladet, headlined "Italy acts, Sweden talks," criticized the social democratic government for not having responded more decisively to the calls for military intervention in Albania. "The next time Sweden talks about conflict- preventing missions in an international context, it will be this kind of discrepancy between word and deed that other countries will put their finger on," the paper declared.

Carl-Erik Isacsson is a member of the metalworkers union in Sodertalje, Sweden.  
 
 
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