Swedish newspaper E24 ran a story yesterday with the headline “Made in Sweden is hot again”.
Not since prime minister Olof Palme compared the bombings of Hanoi with Treblinka has Sweden been so debated on the other side of the Atlantic. In the times of financial crisis and regressing export markets the panicked Americans doesn’t want Volvos, Saabs or even Absolut Vodka anymore. A completely different blue-yellow (the colors of the swedish flag)product is high in demand: Swedish crisis solving.
There seems to be only two schools of thought on how to solve the crisis right now. Either the japanese version where limited support plans led to a lost decade, and the swedish model of “do it over again, do it right” where the banks are bought, cleaned up and then resold.
They use some Obama quotes where he on board of Air Force One stated in response to a question regarding the swedish model, “All I can say is that I won’t allow the financial industry to crash and burn.”
The Swedish version of Metro had a full cover today regarding Obamas stance on the swedish model set during the last banking crisis in the early 90’s when the banks were largely nationalized. He is largely skeptical, and with good reason as Sweden at the time only had about 5 banks while the U.S has thousands. The headline reads “The swedish model is completely rejected by Obama!”.
The swedish governments saving of the bank industry in the early 90’s is a hot topic in the United States right now. But Barack Obama gives it a thumbs down.
“Sweden has a different culture when it comes to their relations to the market economy” Obama said to ABC news.
That didn’t stop two top economists from New York University stating “Nationalize the banks – we’re all swedes now” in the Washington Post (read it here). Correctly implemented the system could work in the US as well they argued.
Noteworthy point that isn’t mentioned in the article is that while the purchases of the banks cost the goverment around $6 billion at the time, most everything of that investment was quickly regained by the tax payers after the crisis.
Sweden, which was once called the “cowardly nation up north” by Churchill, seems to have been lifted to international star status with balls of steel. All because they once had a banking system that didn’t work at all, and a number cruncher who set it all right again.
Forget the Abba museum. What the world seems to want now is the former head of the swedish financial department Stefan Ingves.