Nordic nations grapple with 'austerity lite'
When Swedish Prime Minister Fredrik Reinfeldt celebrated his 45th birthday, his finance minister gave him a framed graph showing the tax burden falling to 45 percent of GDP for the first time in decades. It still hangs in his office.The gift reflected the celebratory mood of a centre-right government boosting economic growth while reducing taxes and cutting unemployment and sickness benefits, shrinking a welfare state that is among the most generous in the world.
Three years later, engulfed in the worst riots in decades, that optimism is questioned. The torching of cars and battles with masked youths from poor immigrant suburbs has exposed another side of Sweden's welfare reform.
Still, given globalisation and the need to be competitive, the fact that people live longer and that state finances need to be kept sound, Sweden and other Nordic states face more reforms, a lite version of austerity forced on many European nations.
"We are far more aware that Sweden is part of a competitive environment," said Minister for Social Security Ulf Kristersson.
Sweden is eyeing more cuts to pensions and sickness benefits, but it is not alone in the region. Denmark too is cutting benefits. Finland is under pressure to raise the pension age. Even oil rich Norway has concerns it is becoming uncompetitive.
But Sweden faces political headwinds before a 2014 election. Cuts have pushed the Danish government to historic poll lows. In Norway, reforms are on a back burner.
For a glimpse of a market-oriented culture that increasingly permeates Sweden's state, look no further than St. Goran's hospital, Stockholm's only privately run emergency hospital.
From the offices of chief executive Britta Wallgren, it can be difficult to know she is talking about running a hospital. A video compares emergency checkups with Formula 1 pit stops and her conversation is littered with words like "lean" and "flows".
Stockholm council pays St Goran's, privatised in 1999 and owned by private health provider Capio, on a formula based on the number of patients and treatments.
The contract has been renewed this year. Costs are around 8 percent lower than other Stockholm hospitals. But they lead other hospitals in many indicators, including reducing hospital infections and waiting times.
"We believe the drive for efficiency also means a drive for quality," said Wallgren. She pointed out how simple changes in treatment - making sure teams included specialists as well as nurses - cut costs and reduced waiting times.
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