| |
| | Undermining the Welfare State in Sweden |
 | | Rather, Sweden was to have internal austerity (the devaluation lowering real wages, followed by tight fiscal policies and increased interest rates aimed at curbing inflation) coupled with stimulated external demand (using the devaluation to increase Swedish exports, as well as corporate profits). |
 | | The deterioration of Sweden's government finances is thus not caused by its welfare system; rather, it was the Reaganite tax reform of 1990 (and further tax breaks since) that created a fl hole in the government budget, now to be paid for by the poor and powerless. |
 | | In May 1991, the new policy was further entrenched, as Sweden tied its krona to the ecu (European Currency Unit, the EC currency), thus making Sweden's monetary policy dependent on that pursued by the German Bundesbank (which has kept interest rates high to finance the German unification, worsening the crisis all over Europe). |
| www.zmag.org /zmag/articles/june95wennerberg.htm (3423 words) |
|