2010

Press release 03 September 2010 Ministry of Finance International press conference with Minister for Finance

Due to great demand from the international media, Anders Borg invites foreign journalists to a press conference on the Swedish economy, the financial troubles in Europe and his view of the Swedish election campaign, to be held on 8 September. The press conference will be held in English. Mr Borg will be available afterwards for brief interviews.

The press conference will be held in English. Please note that accreditation is required - apply to [email protected] before 17.00 on Monday 6 September.

Please bring your press credentials.

We look forward to seeing you.

Time and place 14.00 on 8 September 2010 International Press Centre, Fredsgatan 6, .

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 23 July 2010 Ministry of Finance European stress test shows good results for Swedish banks The Committee of European Banking Supervisors (CEBS) has in cooperation with the national supervisory authorities conducted a stress test on European banks, among these four Swedish banks. The results confirm previous Swedish stress tests. The Ministry of Finance acknowledges the outcome of the EU-wide stress test and supports this joint effort.

"It is pleasing that we have been able to convey the traditional Swedish policy of openness and transparency. The publication of the stress test results, also for individual banks, is very important in order to restore confidence in the European banking system," says Minister for Finance Anders Borg. External links Web page of The stress test was applied to 91 banks in total, representing a aggregate market share of the European Finansinspektionen banking sector of more than 65 percent. The stress test includes a hypothetical scenario based on the Web page of CEBS assumption of a recession both in 2010 and 2011 as well as a significant increase in interest rates. In addition, banks' exposures to sovereign risk is tested.

The objective of the stress test is to assess the banks strength and ability to manage economic chocks and to identify possible capital needs. In the interpretation of this outcome, the results of the adverse scenario should not be considered as representative of the current situation. A stress testing exercise does not provide forecasts of expected outcomes since the adverse scenarios are designed as "what-if" scenarios including plausible but extreme assumptions, which are therefore not very likely to materialize. Experience from the United States and has shown that this type of tests re-establish confidence in the banking system.

The results of the now performed test show that the four Swedish banks pass the test requirements well above margin. The Swedish banks are well capitalised and are resilient to withstand possible negative chocks.

"It is very satisfying to see how well the Swedish banks perform in this stress test. The results confirm the positive outcome of previous Swedish stress tests made by the financial supervisory authority and the central bank," says Minister for Financial Markets .

The Ministry of Finance is nevertheless committed to secure financial stability, should the economic conditions worsen and private funding not be sufficient. Even though the Swedish banks are well capitalised and the dependence on Government support is low, the support measures should not be withdrawn too early. In view of the concerns regarding public finances in some countries and the contagion risk, the Government has made the assessment that the support measures should remain in place for cautionary purposes. Through the support measures that the Government has introduced since the outburst of the financial crisis, the Government can act forcefully in order to manage different situations that may arise. For this purpose, Sweden has currently in place a guarantee scheme and a recapitalisation scheme. All measures need to comply fully with EU state aid rules.

The guarantee scheme has recently been extended and is currently in place until to 31 December 2010. The total financial limit for the guarantee scheme is 1,500 billion Swedish kronor, and the outstanding guarantees by the end of June 2010 was approximately 200 billion Swedish kronor. The recapitalisation scheme has been extended and runs up until the 17th February 2011. It comprises at most SEK 50 billion, and as of June 2010 5.6 billion Swedish kronor has been utilized.

For information regarding the stress test results of individual banks see Swedish Financial Supervisory Authority website www.fi.se and CEBS website www.c-ebs.org

Contact Daniel Valiollahi Press Secretary +46 8 405 10 00 Sarah Lundgren Acting Press Secretary to Mats Odell +46 8 405 22 17 +46 70 385 99 91

Press release 28 May 2010 Ministry of Finance Ministry for Foreign Affairs Press invitation: World Bank Senior Vice President Justin Yifu Lin, Minister for Finance Anders Borg and Minister for Internatio In connection with the opening of the Annual Bank Conference on Development Economics (ABCDE) taking place in Stockholm, May 31- June 2 at Clarion Hotel Sign, Stockholm, Anders Borg, Minister for Finance and , Minister for International Development Cooperation, and Justin Yifu Lin, Senior Vice President and Chief Economist at the World Bank, will hold a Press Conference.

Time and place Related Monday 31 May at 08h30-09h10 in Press Conference Room C4, Clarion Hotel Sign, Östra Järnvägsgatan 35. Read more about ABCDE

At the ABCDE - Conference there will be opportunities to meet and undertake interviews with some of the world's most prominent and influential thinkers and researchers in development economics. Download The ABCDE - Conference will be hosted by the Swedish Minister of Finance, Mr Anders Borg and the Swedish Agenda ABCDE as of May 26 Minister of International Development Cooperation, Ms Gunilla Carlsson and The World Bank. Speakers (pdf 258 kB) include Nobel Laureates Elinor Ostrom, Joseph Stiglitz, Eric Maskin, James Mirrlees and Robert Solow as well Plenary Sessions and as World Bank Senior Vice President and Chief Economist, Justin Yifu Lin. Development Debate, Keynote, Author, and Discussant Bios (pdf 256 kB) Research issues to be discussed cover some of the most urgent global challenges, such as environment and climate change, development in light of the financial and economic crisis, fragile states and human and social developments. The conference will be rounded off with a Development Debate on "Development Challenges in a Post-Crisis World", with three Nobel Laureates. The debate will be part of the World Bank's new External links Development Debates initiative. This session will be moderated by BBC Economics Editor, Ms. Stephanie Flanders. ABCDE Sweden - Development Challenges in a Post-Crisis World at World The ABCDE-Conference was first organized in 1989 and has, since then, been established as one of the most Worldbank's website prominent annual conferences on development economics. This year's conference is being co-organised by the Swedish Government and the World Bank, and it will gather around 600 delegates and experts from all over the world. For more information about the conference and to access an updated agenda you will find a link to the conference website: www.sweden.gov.se/abcde2010

Media Accreditation: Accreditation is necessary and journalists are invited to register with Ms. Pernilla Stålhammar, [email protected] at the ABCDE-Secretariat. If possible, please register by sending an email with your name, title, and affiliation. Requests for interviews are welcome and we will try to accommodate such requests, provided the persons concerned have time available.

Conference badges will be handed out at the registration desk at Clarion Sign Hotel. The Registration desk will be open May 30 15h10-20h30, May 31-June 1 07h30-19h10 and June 2 07h30-13h10. Please note that conference badges for media will only be issued upon presentation of press credentials bearing a photograph. A Press Centre will be open May 31-June 1 08h10-19h10 and June 2 08h10-15h10.

Contact Pernilla Stålhammar ABCDE-Secretariat, Department for Development Policy, Ministry for Foreign Affairs +46 8 405 49 64 +46 72 230 31 26 email to Pernilla Stålhammar Sara Brandt-Hansen Press Officer, Ministry for Foreign Affairs +46 8 405 81 03 +46 702 57 56 56 email to Sara Brandt-Hansen Julia Hector Desk Officer, ABCDE-Secretariat, Department for Development Policy, Ministry for Foreign Affairs +46 8 405 82 02 +46 70 300 77 53 email to Julia Hector Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Peter Larsson +46 8 405 10 00 Dr Mia Horn af Rantzien Director of ABCDE-Secretariat, Ministry for Foreign Affairs +46 8 405 52 57 +46 76 140 24 00 email to Dr Mia Horn af Rantzien

Press release 20 May 2010 Ministry of Finance Ministry for Foreign Affairs Economic heavyweights come to Stockholm to discuss development challenges in a post-crisis world We invite you to take part in, broadcast, and undertake interviews with some of the world's most prominent and influential thinkers and researchers in development economics at the Annual Bank Conference on Development Economics (ABCDE) held in Stockholm, May 31-June 2 at Clarion Hotel, Sign.

Please note, that due to a very big interest in the conference, we can unfortunately not accept any more participants as we have reached maximum capacity. This invitation is for the media only.

The conference will be hosted by the Swedish Minister of Finance, Mr Anders Borg and the Swedish Minister of International Development Cooperation, Ms Gunilla Carlsson and The World Bank. Speakers include Nobel Laureates Elinor Ostrom, Joseph Stiglitz, Eric Maskin, James Mirrlees and Robert Solow as well as World Download Bank Senior Vice President and Chief Economist, Justin Yifu Lin. Agenda ABCDE as of May 26 (pdf 258 kB) Research issues to be discussed cover some of the most urgent global challenges, such as environment and Plenary Sessions and climate change, development in light of the financial and economic crisis, fragile states and human and social Development Debate, developments. The conference will be rounded off with a Development Debate on "Development Challenges in Keynote, Author, and a Post-Crisis World", with three Nobel Laureates. The debate will be part of the World Bank's new Discussant Bios (pdf 256 kB) Development Debates initiative. This session will be moderated by BBC Economics Editor, Ms. Stephanie Flanders.

The ABCDE-Conference was first organized in 1988 and has, since then, been established as one of the most External links prominent annual conferences on development economics. This year's conference is being co-organised by ABCDE Sweden - the Swedish Government and the World Bank, and it will gather around 600 delegates and experts from all Development Challenges in a over the world. For more information about the conference and to access an updated agenda you will find a Post-Crisis World at World link to the conference website under External links. Worldbank's website

Media Accreditation: Accreditation is necessary and journalists are invited to register with Ms Pernilla Stålhammar, [email protected] at the ABCDE-Secretariat. If possible, please register by sending an email with your name, title, and affiliation no later than May 25. Requests for interviews are welcome and we will try to accommodate such requests, provided the persons concerned have time available.

Conference badges will be handed out at the registration desk at Clarion Sign Hotel. The Registration desk will be open May 30 15h10-20h30, May 31-June 1 07h30-19h10 and June 2 07h30-13h10. Please note that conference badges for media will only be issued upon presentation of press credentials bearing a photograph. A Press Centre will be open May 31-June 1 08h10-19h10 and June 2 08h10-15h10.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Peter Larsson +46 8 405 10 00 Dr Mia Horn af Rantzien Director of ABCDE-Secretariat, Ministry for Foreign Affairs +46 8 405 52 57 +46 76 140 24 00 email to Dr Mia Horn af Rantzien Julia Hector Desk Officer, ABCDE-Secretariat, Department for Development Policy, Ministry for Foreign Affairs +46 8 405 82 02 +46 70 300 77 53 email to Julia Hector Pernilla Stålhammar ABCDE-Secretariat, Department for Development Policy, Ministry for Foreign Affairs +46 8 405 49 64 +46 72 230 31 26 email to Pernilla Stålhammar Sara Brandt-Hansen Press Officer, Ministry for Foreign Affairs +46 8 405 81 03 +46 702 57 56 56 email to Sara Brandt-Hansen

Press release 20 April 2010 Ministry of Finance Nordic countries welcome approved review of Iceland's IMF programme The Nordic countries - Denmark, Finland, Norway and Sweden - support Iceland's efforts for economic recovery by providing bilateral loans totalling 1.775 billion euro for disbursement in four equal tranches in the context of Iceland's economic programme with the International Monetary Fund (IMF) and under the condition that Iceland will honour its international obligations.

We welcome Iceland's Letter of Intent in connection with the second IMF-review of its economic programme, in which Iceland clearly reaffirms its commitment to honour its obligations in regard to the insured retail depositors of the intervened Icelandic banks and its preparedness to conclude - at the earliest convenience - negotiations with the Governments of the United Kingdom and the Netherlands regarding settlement of this matter. We strongly support Iceland's continued efforts in this regard.

The Nordic countries welcome the IMF Board's approval of the second review of Iceland's economic stabilization and reform programme on 16 April 2010 and the broad international support thereof. We have now made the second tranche of the Nordic loans available to Iceland.

Joint press release between Denmark, Finland, Norway and Sweden

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Daniel Valiollahi Press Secretary +46 8 405 10 00 Anna Björnermark, Deputy Director International Department + 46 8 405 14 17

Press release 15 April 2010 Ministry of Finance 2010 Spring Fiscal Policy Bill Stronger policies to promote employment while safeguarding public finances - in the Spring Fiscal Policy Bill the Government states the direction it will take to nurture economic recovery and maps out Sweden's path forward for exit from the crisis. In total, the Government is committing a further SEK 4.9 billion during 2010. The aim is to ensure that those who have suffered most from the crisis do not get left behind and to stimulate the demand for labour.

The economic recovery appears to be arriving sooner and turning out stronger than the Government estimated in the Budget Bill for 2010. Growth of 2.5 per cent is expected this year, followed by 3.9 per cent next year. is expected to begin to decline and employment to increase in the course of this Download year. Key indicators from the 2010 Spring Fiscal Policy Bill 2009- "There are various indications that Sweden has coped with the crisis better than many other countries, thanks 2014 (pdf 78 kB) to responsible financial policies,"says Minister for Finance Anders Borg. "But the economy is still fragile and certain groups have been hit hard by the crisis. Moreover, it is important to ensure that a high rate of unemployment does not become persistent. Consequently, in connection with this Spring Fiscal Policy Bill too, we are proposing a number of measures to continue to lessen the impact of the crisis and nurture economic recovery."

Measures to lessen the impact of the crisis and nurture recovery Pensioners and families with children have been hit particularly hard by the crisis. It is important that these groups do not get left behind. The Government therefore proposes: a further reduction in income tax for pensioners a rise in the large-family supplement to the child allowance.

The Government is also working to ensure that jobs return early in the recovery and to prevent bottlenecks arising that may prevent employment from growing. A series of labour market policy measures have already been implemented but they are now being further reinforced. Some of the measures proposed in the Spring Fiscal Policy Bill are: a temporary shortening of the qualifying period for new start jobs for older people from 12 to 6 months, which will make it easier for older unemployed people to return to the labour market a temporary summer initiative for young people in school, in the form of summer jobs and summer school special action for the Västra Götaland region including more places in training schemes.

To further strengthen employment, certain planned infrastructure investments are also being brought forward. In addition, resources will be made available to enable several major infrastructure projects to be carried out over the next ten years in Stockholm, Gothenburg, Sundsvall and Motala.

To create a better business climate so as to increase productivity, the Government proposes to eliminate audit obligations for small enterprises and simplify VAT reporting.

Important to bring public finances back into surplus As a result of the brighter outlook for the Swedish economy, the public finances will develop more favourably than the Government estimated in its Budget Bill for 2010. It now looks as if the public finances will strengthen to approach the surplus target at a satisfactory pace without measures needing to be taken to bolster the budget. The forecasts show a public finances surplus of more than 1 per cent as early as 2013. However, this is conditional in part on phasing out the temporary measures taken to combat the crisis as the state of the economy improves.

"It is important for several reasons that we bring public finances back into surplus. One of the reasons is so that we are in a strong position to meet future economic downturns. Another is to respect the targets we have set so as to maintain confidence in financial policy and long-term sustainable finances."

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Daniel Valiollahi Press Secretary +46 8 405 10 00

Press release 28 January 2010 Ministry for Foreign Affairs Ministry of Finance Ministers Bildt, Borg and Carlsson to Davos Minister for Foreign Affairs , Minister for Finance Anders Borg and Minister for International Development Cooperation Gunilla Carlsson will travel this week to the World Economic Forum in Davos, Switzerland, to take part in seminars and meet political and business leaders.

On Friday 29 January, Mr Bildt will take part in the 'Interactive Dinner Session: Meet the Peacemakers', where Prime Minister Morgan Tsvangirai of Zimbabwe will also be participating. Together with Ms Carlsson, Carl Bildt will also be taking part in the 'Food Security, Nutrition and Sustainable Agriculture' seminar and they will both be meeting President of the International Red Cross, Jakob Kellenberger. On Saturday 30 January, Mr Bildt will be taking part in the session 'Climate Change: From Copenhagen to Mexico'. During his stay, Mr Bildt will also hold several bilateral meetings including one with Colombia's Minister of Foreign Affairs, Jaime Bermudez Merizalde.

On Saturday 30 January, Minister for Finance Anders Borg and Mr Bildt will take part in the 'Interactive Lunch Session: Informal Gathering of World Economic Leaders: Avoiding a Jobless Economic Recovery'.

Mr Borg will also be a panel speaker at the session 'Post-Crisis Identity: Defining the Role of Financial Services in Society' on Thursday 28 January. The following day, 29 January, he will participate in the session 'Redesigning Government Exits' where he will lead the discussions, and in the session 'Informal Gathering of World Economic Leaders: The Mutual Assessment Process - A Major Step Forward for Global Economic Governance?' together with Pravin Gordhan, Mario Draghi and others.

On Saturday 30 January, he will take part in the session 'Informal Gathering of World Economic Leaders: Global Financial Regulatory Reform: Translating Principles into Effective Policies' with Christine Lagarde, Alistair Darling, Lawrence Summers and others.

Apart from the regular programme, Mr Borg will hold other meetings with political and business leaders, including Stanley Fischer, CEO of the Bank of Israel.

Apart from participating in the above programme items, Minister for International Development Cooperation Gunilla Carlsson will also meet the Head of the UN World Food Programme (WFP), Josette Sheeran, who is now playing a key role in assistance to Haiti. On Friday evening, 29 January, Ms Carlsson will be participating in a dinner discussion on the theme of 'Europe's role on the Global Stage', where British Secretary of State for Foreign and Commonwealth Affairs David Miliband will also participate. Ms Carlsson will also meet the Head of the Japan International Cooperation Agency (JICA), Sadako Ogata, and give the opening speech at a seminar entitled 'New Models of Collaboration for Economic Development'. She will also meet representatives of the Bill and Melinda Gates Foundation and the British aid organisation OXFAM GB.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Anna Charlotta Johansson +46 8 405 00 00 Peter Larsson +46 8 405 10 00 2009

Press release 20 September 2009 Ministry of Finance The budget for 2010: Working Sweden out of the crisis The Budget Bill for 2010 contains further assertive measures to tackle the recession following the financial crisis. A total of SEK 32 billion is being put into new measures for 2010 and SEK 24 billion for 2011.

"In the wake of the financial crisis, many people risk protracted and destructive economic and social exclusion after having lost their jobs. We are trying to limit damage from the crisis by taking forceful action to promote jobs and enterprise and by providing support to everyone who has been severely hit by Download unemployment so as to enable them to recover more quickly. We are making it possible to keep up the standard of education and care services despite the tough years ahead," says Minister for Finance Anders Government measures in the Borg. Budget Bill for 2010, table (pdf 47 kB) The measures in the budget aim to: moderate the decline in employment prevent unemployment from becoming entrenched defend core welfare services encourage more business starts and business growth protect the climate.

Further measures are warranted The Swedish economy, being dependent on exports, has been severely impacted by the sharp downturn in the global economy. It is estimated that Sweden's GDP will fall by 5.2 per cent during 2009, which is the weakest growth performance in a single year since the Second World War. In tandem with this, unemployment is expected to continue to rise, reaching 11.6 per cent in 2011 before starting to decline.

Now there are indications that the global economy is beginning to stabilise. The situation in the financial markets has stabilised, improving opportunities for households and businesses to obtain loans. This reduces the risk of further negative repercussions on the economy and public finances. The general government sector finances are expected to be stronger than forecast in the 2009 Spring Fiscal Policy Bill. General government net lending is estimated at -2.2 per cent as a share of GDP this year and -3.4 per cent in 2010.

The economic downturn makes it even more important for the Government to continue its efforts to enable more people to work, with fewer left outside the labour market. Given the low level of resource use, the sharp fall in employment and the reduced risk faced by public finances, further measures are warranted to tackle the crisis.

Moderating the decline in employment To moderate the decline in employment during the deep recession, the Government proposes a range of measures aimed at influencing public sector employment. They include increased support to local governments and infrastructure investments.

Preventing high unemployment becoming entrenched The most difficult and most important task facing the Government is to prevent unemployment becoming entrenched at a high level - that is, to prevent the unemployment that will arise in the next few years from becoming persistent and permanent.

Consequently, policies cannot be directed solely at stimulating demand; they must also be supplemented by initiatives to ensure that the increased unemployment in 2009 and 2010 does not remain stuck at a high level. These initiatives include more measures to make the unemployed more employable, to improve the business climate and to make it more worthwhile to work.

The in-work tax credit makes it more worthwhile to work, helping ensure that more people remain active in the labour market. This improves the prospects of strong employment growth when it becomes clear that the economy has entered a new growth phase. An increased in-work tax credit will thereby contribute to higher employment even after 2010. Maintaining important welfare services during the recession Even in a deep recession, core welfare services such as health and social care and justice must be guaranteed. With the proposed measures, the Government wants to give priority to core public sector services and to create a more equitable distribution of public sector resources.

The temporary resources for municipalities and county councils in 2010 will help maintain important welfare services such as schools, health care and elderly care during the recession.

Increased appropriations for justice will make it possible for the police, courts and prison and probation services to become more efficient and to achieve better results.

Lower taxes for pensioners and higher housing supplements for people receiving activity and sickness compensation will cushion the impact of the crisis and contribute to greater security.

Encouraging more business starts and business growth An innovative and dynamic business sector that is well able to adapt is of central importance for economic growth. In this Bill, the Government therefore proposes a range of measures to strengthen incentives to start up, run and develop businesses in Sweden. These measures will make entrepreneurs more secure, make it less risky to start new businesses and lower costs for many businesses. They include reduced social security contributions for self-employed people to improve growth and development opportunities for small enterprises.

Protecting the climate To meet Sweden's energy targets, the Government is proposing additional measures to promote more efficient energy use in industry, agriculture and forestry, the construction sector, households and the public sector. The Government also proposes allocating additional funds to climate investments in developing countries so as to achieve Sweden's climate objective of reduced emissions of greenhouse gases. In addition, continued preventive measures are presented to adapt Sweden to the inevitable consequences of climate change.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 01 July 2009 Ministry of Finance Nordic countries sign agreements on credits to Iceland of 1.775 billion euro Loan agreements have today been signed between Iceland and Denmark, Finland and Sweden respectively, and between Seðlabanki Íslands, guaranteed by Iceland and Norges Bank, guaranteed by Norway. Under the agreements the Nordic lenders stand ready to provide Iceland with total credits of 1.775 billion euro.

The loans will be provided in relation to and as a support of Iceland's economic stabilisation and reform programme with the International Monetary Fund (IMF). The loans are intended to strengthen Iceland's foreign exchange reserves. The Nordic creditors - Denmark, Finland, Norway and Sweden - are with these loans making an important contribution to international crisis management.

Building on the decision by the Nordic Prime Ministers at the end of October 2008 to establish a Nordic joint task force on support to Iceland, the Nordic countries have worked closely together and are now pleased to have reached agreement on the details of the loans. The loans' maturity of 12 years provide Iceland with important long-term financing and is a reflection of the lenders' solidarity and long-term commitment to assist Iceland in its current serious financial and economic situation.

Signing of the agreements does not imply immediate disbursement of the Nordic loans. Disbursement of the loans will be in four equal tranches tied to the first four reviews of Iceland's IMF programme with the payment of each tranche conditional on the approval of the relevant review. Iceland is committed to implement its stabilisation and reform programme with the IMF. In this context, Iceland's recent agreements with the Netherlands and UK covering Iceland's Icesave commitments is an important step.

Going forward, the specification of Iceland's fiscal consolidation programme and measures for restructuring the banking sector in a fair and equitable way are important elements for the programme. As concluded by the Icelandic authorities and the IMF , further measures in these areas are being worked on and need to be put in place before the first review of Iceland's IMF programme and the accompanying first disbursement of the Nordic loans.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Anna Björnermark International department +46 8 405 14 17

Press release 04 June 2009 Ministry of Finance Minister for Finance Anders Borg comments on the situation in Latvia

Minister for Finance Anders Borg made the following comments in connection with the situation in Latvia:

- The situation in Latvia is a cause for concern, with production falling and unemployment rising. The Latvian Government has begun work on restoring long-term sustainable public finances. Budget reinforcements have put difficult strains on the Latvian people. The deficit in the public finances has, however, increased and the original goals no longer appear attainable, says Minister for Finance Anders Borg.

- It is the Latvian Government that is responsible for the direction of budget policy and the choice of exchange rate regime. I take note that the authorities want to control government debt and maintain their exchange rate peg. It is urgent to underline the importance of continuing to manage the deficit in the public finances. The supplementary budget presented this week is a step in the right direction in continuing the budget consolidation. We welcome the Latvian Governmen's ambition to introduce additional measures in the near future, says Minister for Finance Anders Borg.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Björn Wretfeldt Press Secretary to Anders Borg

Press release 14 May 2009 Prime Minister's Office Ministers' engagements weeks 21-22 2009

Subject to change.

For further information contact the Minister's press secretary. Related Press contacts Calendar for Prime Minister Prime Minister's Office Calendar for Minister for Foreign Affairs Carl Bildt Calendar for Minister for Trade Ewa Björling Prime Minister Fredrik Reinfeldt 18 May Travel in Sweden

20 May Party leader debate ahead of European Parliament election,

25 May Travel in Sweden

Ministry for Foreign Affairs

Minister for Foreign Affairs Carl Bildt 18 May Participation in GAERC, Brussels Visit to Göteborg, Sweden

21 May Visit to Warsaw Visegrad Meeting

24-26 May ASEM, Hanoi

27-28 May Visit to Phnom Penh

Minister for Trade Ewa Björling 18 May Visit to Göteborg, Sweden

19 May Visit to Almi Företagspartner (Almi Business Partner)

19 May Dialogue meeting on the export ban on Swedish snuff in the EU internal market

20 May Advisory Committee on EU Affairs, Riksdag Meeting with World Bank President Robert B. Zoellick at World Bank meeting, Helsinki

25 May Speech at Africa Day Seminar on Strategic Partnerships for African Development, Stockholm 27 May Main speaker and award presenter at SwedenBIO's Annual General Meeting

27 May Informal meeting with African ambassadors based in Stockholm on EPA negotiations

28 May Competitiveness Council, Brussels

29 May Visit to Tranås, Sweden

Press release 15 April 2009 Ministry of Finance The 2009 Spring Fiscal Bill - a responsible policy to secure welfare In conjunction with the 2009 Spring Fiscal Policy Bill, the Government proposes further measures for combating the crisis. To reduce the impact on jobs and key parts of the welfare systems, the Government proposes increasing grants to the local government sector. Resources for labour market policy are also being boosted. Along with the measures presented since the 2009 Budget Bill, the Government is allocating a total of SEK 45 billion in 2009 and SEK 60 billion in 2010 in response to the crisis.

The deep recession means that a policy that puts jobs first now faces much greater challenges.

"In a situation where we are experiencing the weakest growth since the Second World War and unemployment is rising dramatically, the Government has chosen a clear path marked by responsibility for public finances, for jobs and for the core welfare activities," says Minister for Finance Anders Borg.

Key elements of economic policy One basis of the Government's policy in the severe recession is keeping public finances in good order to ensure that the deficits are temporary and manageable. In this way, households and firms can continue to have confidence in economic policy and the foundation on which welfare rests.

"Key parts of the welfare systems such as education, health care, social services and the judicial system also have to function in difficult economic times," says Minister for Finance Anders Borg. "People must have confidence in the public sector's ability to fulfil its main task."

The Government also continues its work to create the conditions whereby as many as possible can work and thus contribute to the common good. In an economic crisis, the Government's most important contribution to achieving this objective is to focus on active labour market policy measures. These measures provide people with security while adjusting to change and with support in looking for work, even in new fields and in other parts of the country. They reduce the risk of unemployment persisting when the economy turns upwards.

More measures to combat the crisis The financial crisis makes it even more important for Government policy to be straightforward. Therefore, in connection with the 2009 Spring Fiscal Policy Bill, the Government is presenting measures in two areas - increased grants to municipalities and county councils and more resources for labour market policy.

To reduce the impact of the financial crisis on jobs and key parts of the welfare systems, the Government proposes more financial assistance for the local government sector in the form of a temporary counter-cyclical support of SEK 7 billion for 2010, which will be paid in December 2009. At the same time, the Government is announcing an increase of SEK 5 billion in the central government grant to municipalities and county councils in 2011 and 2012.

Furthermore, resources for labour market policy are being strengthened in order to prevent persistent high unemployment. The Government is allocating SEK 10 billion in the supplementary budget to active measures and unemployment insurance. Total labour market policy expenditures will increase by over SEK 20 billion between 2008 and 2009 and by about SEK 100 billion for a few years after that. The increased resources will be used to prevent people from becoming long-term unemployed and improve conditions for those most detached from the labour market. The Government is also increasing resources to help the unemployed to look for work, get training and get more access to traineeships.

Extensive stimulus package Along with the measures presented earlier in the 2009 Budget Bill and afterwards, the Government is thus allocating a total of SEK 45 billion in 2009 and SEK 60 billion in 2010 to combat the crisis.

The Government will continue to monitor the situation to see if further measures are needed. There is very little scope for additional reforms. The Government will tackle the crisis, weighing each measure for the effects it will have on jobs and the public finances. In this way the Government takes responsibility for Sweden and secures welfare.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 10 March 2009 Ministry of Finance Ministry of the Environment Ministry of Enterprise, Energy and Communications New green cars to be exempted from vehicle tax Green cars will be exempted from vehicle tax for five years, while vehicle tax will be raised by SEK 5 per gram of carbon dioxide a car emits. The vehicle tax on heavy goods vehicles and large buses will be lowered and the energy tax on diesel raised by SEK 0.40 per litre by 2013. These are some of the proposed economic policy instruments that the Government will present in its energy and climate bill.

The Government is working for Sweden to have an energy supply that is sustainable and makes efficient use of resources, and to have zero net emissions of greenhouse gases to the atmosphere by 2050. Long-term predictability and regard for the difficult economic situation have been guiding concerns in the Government's climate bill, which will shortly be laid before the Riksdag.

- The climate challenges can serve as an economic lever and provide opportunities for new jobs and increased exports. This is the time for us to invest in sustainable energy and smart technical solutions that make it possible to meet increased demand from a position of strength when the economy picks up, says Minister for Enterprise and Energy .

- Those who pollute must pay for their impact on the environment. The policy instruments must be economically efficient, technology-neutral and preferably internationally coordinated, avoiding too many rules for special cases. By putting a clear price tag on climate-affecting emissions, we make it clear that emissions have a cost that must be paid, says Minister for the Environment .

- We're making the economic policy instruments in the energy and climate area tougher because this is the most effective way of achieving emission targets. However, the pace and timing of the tougher approach must reflect the sharp economic downturn. The changes must be implemented carefully and gradually so that households and companies have time to adapt. Attention must be given to the operating environment for jobs and enterprises, says Minister for Finance Anders Borg.

In previous budgets the Government has made extensive tax changes aimed at reducing emissions. When the Government soon presents its energy and climate bill, changes in various taxes and support will be presented aimed at reducing emissions of greenhouse gases by a further 2 million tonnes by 2020, in addition to the large reductions that current policy instruments are estimated to achieve. The approach should be that future tax increases for companies and households in the energy and environmental areas should be offset by corresponding tax relief. To stimulate and accelerate a transition to a more environment-friendly car fleet, the climate bill proposes that new green cars be exempted from vehicle tax for the first five years. The current green car premium will thus be replaced by long-term tax exemption. The amendment should enter into force on 1 January 2010, but be effective retroactively so as to apply to cars taken into service from 1 July 2009 onwards. The present definition of a green car will apply and passenger cars running on petrol and diesel that emit less than 120 grams of carbon dioxide per kilometre in mixed driving will also be exempted from vehicle tax. One difference compared with the present green car premium is that the tax exemption will apply not only to cars bought by private people but also to company cars and other cars bought by businesses. Taxation of emissions by increasing the relative weight of carbon dioxide in vehicle tax. The carbon dioxide component of vehicle tax will be raised from SEK 15 to SEK 20, which means that from 2011 onwards the tax will be raised by SEK 5 for each gram of carbon dioxide a car emits. New light goods vehicles, light buses and camper vans will be brought into the carbon dioxide-based vehicle tax system. The fuel factor will be lowered for diesel cars and the environmental factor will be replaced by a fixed monetary amount. In total, this will mean a reduction in the vehicle tax on diesel cars. The energy tax on diesel will be raised in two stages by a total of SEK 0.40 per litre. A first increase of SEK 0.20 should be made on 1 January 2011 and a second increase of SEK 0.20 on 1 January 2013. To compensate heavy traffic for increased tax costs resulting from increases in diesel tax, the vehicle tax on heavy goods vehicles and large buses should also be reduced. The tax on incineration of household waste should be eliminated from 1 September 2010. This tax was introduced on 1 July 2006 but has turned out to have an insignificant effect on behaviour and has only led to unnecessary transportation of household waste. The change will be financed by raising the general carbon dioxide tax by SEK 0.01 per kg of carbon dioxide. A two-stage phase-out of the present reduction in carbon dioxide tax for energy intensive companies (the '0.8 per cent rule') is proposed. In addition, the Government wants more far-reaching coordination of economic policy instruments aimed at plants covered by the EU emission allowance trading system. The reduction in carbon dioxide tax for heating in agriculture, forestry and aquaculture and in industries not covered by the EU emission allowance trading system will be curtailed. The tax level will be raised from 21 per cent to 30 per cent in 2011 and to 60 per cent in 2015. In addition, a decrease is proposed in the level of carbon dioxide tax refunds granted for diesel used in agricultural and forestry machinery. Over and above the annual adjustment in line with the consumer price index, the level of carbon dioxide tax should in future be adapted to the extent and at the rate that, together with other changes in economic policy instruments, deliver a total reduction of greenhouse gas emissions of an additional 2 million tonnes by 2020.

Contact Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00 Mattias Johansson Press Secretary to Andreas Carlgren Lisa Wärn Pressekreterare hos Maud Olofsson

Press release 05 February 2009 Ministry of Finance Ministry for Foreign Affairs Sweden to grant debt relief to Liberia

The Government today decided to grant debt relief of about USD 20.4 million, equivalent to about SEK 170 million, to Liberia by writing off interest and repayment obligations. The debt write-off is part of the Heavily Indebted Poor Countries (HIPC) Initiative and aims to achieve sustainable debt levels in the poorest and most heavily indebted countries. A first write-off of 67 per cent of Liberia's debt will now be made. When Liberia has gone through the HIPC Initiative, Sweden will write off the entire amount of the remaining debt.

The decision to grant debt relief is based on a multilateral agreement in the Paris Club, an informal group of official creditors from 19 industrialised countries. Debt write-offs are made on the basis of an economic programme with the IMF, which in turn rests on the countries' own strategies for poverty reduction.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Eva Haghanipour Senior Adviser Ministry of Finance +46 8 4051419

Press release 03 February 2009 Ministry of Finance Government proposes measures to strengthen banks' capital base in order to increase lending To improve opportunities for Swedish companies to obtain loans, the Government wants to enable banks to strengthen their capital base by means of state capital injections. Participating banks will be required to put a stop to bonuses and freeze other compensation to top management. Further, the Government intends to introduce the previously announced stability fee, beginning this year.

"Getting the credit market working again is essential to prevent the economic downturn from becoming worse. We are therefore presenting additional measures to boost lending," say Minister for Finance Anders Borg and Minister for Local Government and Financial Markets Mats Odell.

The global financial unrest has led to a worsening of credit terms for households and companies in Sweden, and increased demand for loans from Swedish banks from large international Swedish companies. The purpose of the recapitalization scheme is to increase the ability of banks to provide households and companies with loans on reasonable terms. The scheme has a total limit of SEK 50 billion and will be financed through the stability fund that was established in the autumn.

The recapitalization scheme is intended for solvent banks and certain other credit institutions incorporated in Sweden. The Government considers that private investors should be the primary sources of capital, but the scheme will enable the state to contribute as well. The institutions will be able to apply for capital from the state as part of a transaction directed towards private investors or on terms set by the state. The capital can take the form of shares or hybrid capital and will be available on condition that it can count as part of the institution's Tier 1 capital, i.e. that it maintains the highest quality.

The state will be able to take up to 70 per cent of a private issue on the same market terms as other investors. If the state is to take more than 70 per cent, this will be done using the instrument and terms decided by the state. In that case, the terms will be designed to safeguard taxpayers' interests and guarantee the state continuous returns and a significant share of the value growth achieved by the institution.

To strengthen the stability fund the obligatory stability fee announced in the autumn is now being introduced. Under the proposal, which will be presented in a bill submitted to the Riksdag, the fee will be payable at half the full rate in 2009 and 2010, after which it will be raised to the full rate from 2011 onwards. Institutions participating in the state guarantee scheme for medium-term debt will also be able to deduct part of the guarantee fee they pay from the stability fee.

A range of measures have been taken to safeguard financial stability and ensure the functioning of the credit market. For example, the deposit guarantee has been increased, guarantees have been provided for borrowing by banks and a system has been introduced for managing insolvent credit institutions. In addition the Riksbank, the National Debt Office and Finansinspektionen (the Swedish Financial Supervisory Authority) have taken measures aimed at protecting financial stability.

By means of both previously taken measures and the present measures the Government wants to make the credit institutions take social responsibility. Consequently it is important that the Government now, when introducing the recapitalization scheme, also continues to protect taxpayers' interests.

Among other measures, there will be a two-year freeze on pay and remuneration, a ban on bonuses and restrictions on severance payments for top management in the institutions receiving capital injections.

In view of the state aid rules in the EC Treaty, the European Commission has been notified of the recapitalization scheme. Formal approval will be obtained.

The Government intends to take a decision on the Ordinance regulatingthe recapitalization scheme on 10 February.

Contact Mia Widell Press Secretary to Mats Odell Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 27 January 2009 Prime Minister's Office Ministry for Foreign Affairs Ministry of Finance Reinfeldt, Bildt and Borg to Davos Prime Minister Fredrik Reinfeldt, Minister for Foreign Affairs Carl Bildt and Minister for Finance Anders Borg will attend the World Economic Forum in Davos, Switzerland later this week.

On Thursday (29 Jan) Mr Reinfeldt will take part in the session 'The Economic Governance of Europe' (open to the media), on Friday (30 Jan) in the sessions 'Reviving Global Economic Growth' and 'Europe's Place in the World', and on Saturday (31 Jan) in 'The Climate Change Puzzle: Assembling the Pieces'. He will also take part External links in a number of bilateral meetings. World Economic Forum website Mr Bildt's agenda includes Friday's session, 'Reviving Global Economic Growth'. He will also take part in several bilateral meetings during his stay in Davos.

Mr Borg will meet business and political leaders to discuss the financial crisis and its impact. He will also take part in such seminars as 'Strategic Options to Finance Pensions and Healthcare in a rapidly Ageing World' and 'How to Answer the Compensation Question'.

Contact Niclas Bengtsson +46 8 405 10 00 Diana Janse Deputy Director +46 703 48 26 36 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00 2008

Press release 20 November 2008 Ministry of Finance Joint statement from the Ministers of Finance in Denmark, Finland, Norway and Sweden regarding help to Iceland (Nov. 19/20) The IMF Executive Board has today approved a financial package for Iceland. This is a first step to get Iceland out of its current serious financial and economic situation. The banking crisis in Iceland is of unprecedented proportions and has serious implications for the country's economy.

Within the framework of the IMF-supported programme, the Nordic countries - Denmark, Finland, Norway and Sweden - have worked closely together and jointly decided to supplement the IMF financing of US$2.1 billion with additional loans of US$2.5 billion.

- We stress that, as outlined in the IMF programme, an ambitious multi-year fiscal consolidation programme will help Iceland stabilize the economy, including the exchange rate, and reduce public debt over the medium-term. We understand that Iceland is fully committed to honouring its international obligations.

- We have worked intensively with our Icelandic colleagues and our countries' central banks to address the crisis in Iceland, building on the decision by our Prime Ministers to establish a Nordic joint task force on October 27. We also appreciate the interaction with EU colleagues and the IMF to promptly move the process forward.

- The establishment of the Nordic joint task force has been very important to work as quickly as possible and arrive at a solution. It has been a great strength that we have had a clear common view on how to proceed and best help Iceland in this very difficult situation.

- The work with implementing the IMF programme will not be easy but given appropriate measures we believe that there is a good basis for rebalancing the economy. We stand ready to assist Iceland in the spirit of continuous Nordic cooperation.

Anders Borg, Kristin Halvorsen, Jyrki Katainen and Lars Løkke Rasmussen

Contact Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00 Anna Charlotta Johansson Press Secretary +46 8 405 10 00

Press release 20 October 2008 Ministry of Finance The Swedish Government proposes plan to secure the stability of the financial system. The Government will today refer a stabilisation plan for Sweden to the Council on Legislation. The plan includes measures to secure financial stability in Sweden and to deal with the negative effects of the global financial crisis. The proposal includes the creation of a guarantee scheme to restore confidence in the markets and thereby reduce borrowing costs for households and businesses.

"The Government is proposing powerful measures to mitigate the negative effect of the financial crisis on Swedish households and businesses. The Swedish banking industry is well equipped but is being increasingly affected by the global financial turmoil. The Government is therefore asking for a broad mandate in order to be able to take any measures needed to restore confidence to the markets," said Mats Odell, Minister for Local Government and Financial Markets.

"While we are taking actions to maintain stability and restore confidence to the markets, the basic guiding principle is that Swedish taxpayers will not have to bear the costs of any future measures. Clear restrictions with regard to executive compensation and bonuses will be implemented in conjunction with the measures, which give economic advantages to some institutions," said Anders Borg, the Minister of Finance.

The stabilisation plan gives the Government a mandate to manage problems associated with insufficient liquidity and potential future solvency problems while protecting the interests of taxpayers and maintaining predictability. The proposals conform with the conclusions of the European Council.

The stabilisation programme contains the following measures:

* A guarantee scheme. The Government will institute a guarantee scheme of up to SEK 1500 billion to support banks' and mortgage institutions' medium-term financing needs. Institutions will have the option to enter into an agreement with the State which, in turn, will guarantee the institutions new issues of debt instruments in exchange for a fee. The Scheme is intended to ease the financing constraints faced by banks as well as lower their borrowing costs.

* Stabilisation fund. A stabilisation fund will be set up to manage potential solvency problems in any Swedish institutions. The Government will contribute SEK 15 billion to this fund. The intention is that the stabilisation fund, along with the deposit guarantee fund, which has approximately SEK 18 billion in capital, will form 2.5% of GDP on average within the next 15 years. A specific stabilisation fee will be charged to all credit institutions. The fee will be risk-differentiated and will be adjusted based on the level of incoming guarantee fees. The fees will begin to be charged once market conditions stabilise.

* Capital injections. Credit institutions which require capital from the State in the future will, for the most part, be required to issue preference shares with high voting rights to the Government. Other forms of investment by the State could be considered. Such aid from the State will only be provided if the State deems that the institution in question, given the prevailing situation at the time, is important for the financial system as a whole.

* Compulsory share redemption. The State will be given the right, in certain circumstances, to buy out other shareholders in systemically important institutions at market price.

* Other conditions. Credit institutions receiving support, both through guarantees and the recapitalisation fund, are to enter into agreements with the State concerning limits on the compensation of key executives.

* A key role to be played by the Swedish National Debt Office. The National Debt Office will be responsible for administering the guarantee scheme, the recapitalisation fund and potential capital injections to credit institutions. The National Debt Office is already responsible for administering the deposit guarantee scheme.

* Follow-up of the measures. The Swedish Financial Supervisory Authority has been asked to monitor the situation in order to check that the benefits arising from these measures are also passed on to households and businesses.

The Government will take a formal decision today to submit the proposal to the Council on Legislation. The proposed legislative bill will be effective immediately after a review by the Council on Legislation and approval by the Riksdag. The Government expects the proposals to come into effect during next week.

Information concerning the Government Medium-Term Credit Guarantee Scheme Background The Riksbank and the Swedish National Debt Office have been carrying out measures to provide short-term liquidity to the markets. Banks and mortgage institutions are, however, finding it difficult to obtain financing on longer terms. The purpose of the guarantee scheme for medium-term financing is to mitigate the financing constraints facing these institutions. This in turn should result in better prospects for credit provision to households and businesses.

Outline of the Guarantee Scheme

Institutions will have the option to enter into an agreement with the State which in turn would guarantee the institutions' new issues of debt instruments in exchange for a fee. The guarantee is limited to the refinancing of the relevant institutions' existing debt instruments with original maturities longer than 90 days. The scheme is to be administered by the Swedish National Debt Office.

Instruments guaranteed under this scheme may be issued until 30 April 2009. This period could be extended by the Government up to 31 December 2009. The State will initially guarantee up to SEK 1500 billion of debt instruments.

The guarantee will be available to banks and mortgage institutions based and operating in Sweden. Swedish banking groups have substantially centralised their financing activities to the parent company. This means that the guarantee will also have positive effects on the liquidity of subsidiaries of Swedish banks abroad, for example subsidiaries in the Baltic countries could also expect liquidity constraints to be eased. Only institutions with at least 6% Tier 1 capital and at least 9% combined tier 1 and tier 2 capital will qualify for the scheme.

The guarantee fee will be differentiated by risk based on the institutions' public rating. Institutions lacking a public rating will pay a standardised fee. The fee will be set at a level between the current market price and an estimated price under normal market conditions. This should initially induce financial institutions to utilise the guarantee while at the same time providing incentives to refrain from such use when market prices normalise. The Swedish National Debt Office is to release details on the pricing structure before the scheme comes into effect.

Instruments covered by the guarantee are bonds, certificates of deposits and other non-subordinated debt instruments which have a maturity longer than 90 days but less than five years. The scheme includes covered bonds. It excludes complex and structured financial products. The scheme is not subject to any currency restrictions.

The Riksbank intends to treat the guaranteed debt instruments as government bonds in its lending facilities. The guarantee is to be structured in a way which will qualify the guaranteed instruments a zero-risk weighting, using the standardised approach, for capital adequacy purposes.

The State guarantee will impose restrictions with respect to wage increases, bonus payments, increases in board remuneration and bank executives' severance packages during the guarantee period.

Applications for the guarantee are to be made to the Swedish National Debt Office. However, no decisions concerning an application can be taken until the Riksdag has approved the bill and the Government has taken a formal decision implementing the scheme.

The European Commission has been informed about the proposal. In accordance with the state aid rule contained in the Treaty on European Union, Commission approval of the proposal must be obtained.

Contact Mia Widell Press Secretary to Mats Odell Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 22 September 2008 Ministry of Finance The budget for 2009: Putting Sweden to work - safeguarding welfare Today the Government presents the 2009 Budget Bill, containing SEK 32 billion in reforms that will mitigate the effects of a weaker economic environment, permanently raise the level of employment and strengthen welfare. By these initiatives, the Government is acting both to meet current problems and prepare Sweden for the future.

"As a result of responsible policies with a clear focus on getting more people into jobs and encouraging more companies to start and grow, Sweden now stands on a firm foundation. Our position is stronger than that of most other OECD and EU countries. We will now take advantage of this to respond to a poorer outlook in the Related wake of growing unrest in the financial markets, while providing increased resources to education, health care and social services, and other areas", says Minister for Finance Anders Borg. From the Budget Bill for 2009: Budget Statement and summary Restoring the work-first principle and combating people's exclusion from the labour market are important objectives for the Government. Policies to promote permanently high employment and reduced exclusion, combined with a strong economic upturn, have led to decreasing sick leave and unemployment and to more people getting jobs. The situation has been especially favourable for young people.

The dark clouds hanging over the world economy have thickened during the summer and autumn as unrest has grown in the international financial markets. In light of this, the Government, like most other analysts, is adjusting the Swedish growth forecast downwards. The Swedish economy is expected to grow by 1.5 per cent this year and 1.3 per cent next year. The Government expects growth to pick up again in 2010.

Despite a considerable decrease in the past few years, there is still widespread exclusion. The Government will therefore continue to implement structural reforms that will permanently raise the level of employment and make the Swedish economy work better, leading to rising welfare standards.

In this Budget Bill, the Government presents reforms in three main areas: a reform package for jobs and entrepreneurship, a reform package to prepare Sweden for the future, a reform package to strengthen welfare.

These reform packages will mitigate the effects of the economic downturn, make Sweden stronger as a growth nation, and reinforce welfare.

Keeping public finances in good order One cornerstone of government policy is to keep the public finances in good order. Sweden's public finances continue to strengthen. This puts Sweden in a strong position to continue its work on enhancing policies for full employment while being able to respond to a weaker economic outlook. The objective of a one per cent surplus in the public finances is expected to be exceeded in the next few years. Both actual and structural net lending are expected to show average surpluses of between 2.0 and 2.4 per cent of GDP between 2008 and 2011.

A reform package for jobs and entrepreneurship To strengthen the work-first principle and increase the labour supply, the Government proposes a third step in the in-work tax credit and a reduction in total state income tax. The proposals have an overall scope of SEK 15 billion. The three steps combined mean that approximately 97 per cent of all people in full-time work will have received tax reductions of more than SEK 1 000 a month.

The Government also presents a tax package for businesses that will lower their taxes by nearly SEK 16 billion in 2009. The aim is to strengthen incentives for companies to invest and take on new employees. The corporate tax rate will be reduced from 28 to just over 26 per cent and employers' social security contributions will be reduced by one percentage point. In addition, the administrative burden on businesses will be eased by a number of simplifications, as a step towards the Government's target of reducing the administrative burden on businesses by 25 per cent by 2010.

To strengthen work in the area of competition, resources will be allocated to improving the functioning of public procurement and to work on conflict resolution in situations where public and private actors conduct commercial activities in the same market. Furthermore, the Government proposes an initiative for higher education in entrepreneurship.

Finally, the Government intends to improve integration and increase opportunities for people with foreign backgrounds to obtain work. To this end, from 2010 onwards, some SEK 900 million will be allocated to help newly arrived immigrants become established in Sweden.

A reform package to prepare Sweden for the future To strengthen Sweden's competitiveness and safeguard future welfare, the Government proposes vigorous measures in areas such as preschool, research, infrastructure and the environment. A broad drive to raise the quality of preschool will include an expansion of universal preschool to include three-year-olds, a childcare voucher system, a clarification of the preschool curriculum and enhanced further training for preschool teachers and childcare workers. Other proposals include a special initiative for mathematics, natural sciences and technology, an expansion of the pilot project in upper secondary school apprenticeship programmes, an extension of the initiative for further training for teachers and enhanced measures for vocational education and training.

Competitive research and innovations that can be put into production are important preconditions for growth. The research policy must maintain and strengthen Sweden's role as a research nation. Substantial measures are therefore proposed to raise the quality of Swedish research and strengthen the competitiveness of the Swedish business sector so as to contribute to economic growth. In all, the extra resources will total close to SEK 15 billion over a four-year period, with a focus on the research areas of medicine, technology and the climate.

Well-functioning infrastructure is a prerequisite for maintaining and strengthening Sweden's competitiveness. With this in mind, the Government proposes a comprehensive near-term initiative, which together with the amortisation made in 2008 - which freed up SEK 1.3 billion - is equivalent to annual extra resources in excess of SEK 5 billion per year in 2009 and 2010.

The Government also proposes an increase in the appropriation for green car rebates and an allocation of SEK 795 million for climate and energy measures in 2009. SEK 1 070 million will be allocated to this purpose in 2010 and SEK 1 165 million in 2011. In addition, measures are proposed to improve the situation in the Baltic Sea and the North Sea.

A reform package to strengthen welfare The Government proposes measures that will further strengthen Swedish welfare. Taxes will be reduced for pensioners. The annual tax paid by a pensioner receiving a full guarantee pension but little or no income- based pension will be reduced by between SEK 2 300 and SEK 3 500. In total the proposal amounts to approximately SEK 2 billion per year. Over 90 per cent of the country's pensioners will be affected by the reform.

To support municipalities and county councils in their work on developing well-functioning psychiatric nursing and care services, the Government proposes to allocate an additional SEK 650 million per year in 2009-2011. This means there will be total commitments of SEK 900 million per year during that period. With a view to creating clear incentives and further stimulating county councils to offer patients care with good availability, SEK 1 billion per year will be put into a performance-linked health care guarantee, beginning in 2010. In a further proposal, SEK 1 billion will be put into extending the 'healthcare billion' initiative, which is intended to give sick-listing issues higher priority in the health and medical care system. The compensation will refer to performance in 2009 and will be paid out in 2010. The Government also proposes further initiatives in elderly care and social services.

Finally, the Government will continue its drive to reduce crime and create a safer and more secure Sweden. Increased resources are proposed for the Swedish Prosecution Authority, the Swedish National Economic Crimes Bureau, the Swedish courts and the Swedish Prison and Probation Service.

Effects of the Government's policies The reforms that the Government proposes in this Budget Bill will further strengthen the Swedish economy. The Government calculates that one effect will be more people participating in the labour force, which means the Swedish economy can grow more vigorously without resources becoming strained. In addition, tax reductions, for example, will help counteract the economic downturn.

On the Government's analysis, the long-term effects of the Government's reforms will be to increase employment by 2.8 per cent or 120 000 people. The number of hours worked is calculated to increase by 4.4 per cent and GDP by 3.4 per cent.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00

Press release 22 April 2008 Ministry for Foreign Affairs Secretary-General of the OECD visiting Sweden Secretary-General of the OECD, Angel Gurría, is visiting Sweden on 22-23 April at the invitation of Minister for Trade Ewa Björling.

Time and place External links Press conference with Secretary-General Angel Gurría and Minister for Trade Ewa Björling Delegation of Sweden to the Time: Wednesday 23 April, at 11.00 OECD in Paris Place: Ministry for Foreign Affairs, Gustav Adolfs Torg 1 Read more about Angel Gurría at OECD's website Dr Björling and Mr Gurría will hold talks about the role of the OECD in the international economic system and trade policy issues of the future, as well as trade and climate change.

During his visit to Stockholm, Mr Gurría will also meet Minister for Enterprise and Energy Maud Olofsson, Minister for Finance Anders Borg, Minister for Foreign Affairs Carl Bildt, Minister for International Development Cooperation Gunilla Carlsson, Minister for Employment , Minister for Higher Education and Research , Minister for the Environment Andreas Carlgren, Minister for Migration and Asylum Policy Tobias Billström and Minister for Local Government and Financial Markets Mats Odell.

On Tuesday Mr Gurría is giving a speech at the Stockholm School of Economics.

- - - - -

The OECD (Organisation for Economic Cooperation and Development) has 30 member states. Its headquarters are in Paris.

Press release 15 April 2008 Ministry of Finance Responsible economic policy for employment and growth - Security for the future In the 2008 Spring Fiscal Policy Bill, the Government sets out its economic and budget policy guidelines. To meet the challenges facing Sweden in both the short and long term and to secure our future development, the Government announces measures that will strengthen Sweden's opportunities for growth and lead to permanently higher employment and GDP. The Government policy will also improve conditions for knowledge in preschool and school, strengthen welfare provision and put Sweden in a better position to meet the threat of climate change.

The impact of a policy for full employment and economic growth is steadily becoming more obvious. During 2007, the number of people excluded from employment fell by 121 000, the largest reduction in the close to forty years that statistics have been available. One clear step forward is that the 30-year trend increase in the number of people receiving activity and sickness compensation was broken in 2007. By 2010 exclusion is expected to have declined by over 190 000 people.

- More and more people are getting jobs while fewer and fewer are unemployed, on sick leave or in labour market measures. This is gratifying for a government pursuing the overall objective of getting more people into jobs and reducing exclusion, says Minister for Finance Anders Borg.

Responsible policy The international economy is increasingly dominated by turbulent financial markets. Since the Budget Bill last autumn, the storm clouds have gathered and somewhat darkened, worsening the outlook for growth. The Swedish economy is expected to grow by an average of 2.3 per cent between 2008 and 2011. However, given the considerable uncertainty at present, economic policy should be characterised by caution and scope should be maintained to meet unforeseen developments.

The Government's assessment is that the target of a one per cent surplus in net lending will be exceeded by a broad margin in the coming years. Both actual and structural net lending are expected to show average surpluses of over 3 per cent of GDP between 2008 and 2011. The national debt continues to diminish and is expected to be 15.3 per cent of GDP in 2011.

Rather more muted demand over the next few years will reduce the risk of overheating that the Government predicted in the autumn. Fiscal policy has kept up a tightening stance to prevent overheating and this has increased the structural surpluses in public finances. The Government intends to ease the tightening somewhat, while maintaining a responsible fiscal policy.

Initiatives for the future Despite the strong results that have been observed, employment is still too low and exclusion too high. The Government therefore wants to implement further initiatives that will stimulate both the supply of and the demand for labour. The scale of the initiatives in different policy areas will be determined by the strength of the public finances and the scope for providing economic stimulus that the economy allows. With the right structural reforms, the scope for new initiatives may be greater than otherwise, as such reforms contribute to a more balanced use of resources and boost tax revenue through permanently higher employment. The Government's overall assessment, based on the fiscal policy framework and the current forecast for economic developments, is that there is now some scope for new reform initiatives in the 2009 and 2010 budget years.

Reducing exclusion, which was permitted to grow large over a prolonged period, and getting more people into work, thereby strengthening possibilities for growth, has been and continues to be the Government's most important task. The Government's proposed guidelines adopt a broad approach and include actions in a range of policy areas. The Governments intends to propose measures in the Budget Bill for 2009: Measures to enhance incentives to work. Investments to improve the infrastructure. Better conditions for high-quality research. Better conditions for enterprise and competition. Enhanced knowledge in school and preschool. Improved integration of people born abroad.

Strong public finances also make further improvements in welfare possible: The economic situation of the least well-off pensioners will be improved. Psychiatric care will be strengthened. The conditions for an effective and efficient judicial system will be improved.

The Government also intends to propose measures to create an effective energy policy and action to meet the threat of climate change and improve the environment. In addition, further proposals will be presented to create conditions for an effective, efficient and appropriate defence. Contact Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00 Anna Charlotta Johansson Press Secretary +46 8 405 10 00

Press release 10 April 2008 Ministry of Finance Ministry for Foreign Affairs Anders Borg and Gunilla Carlsson to World Bank and IMF meetings in Washington Minister for Finance Anders Borg and Minister for International Development Cooperation Gunilla Carlsson will be travelling to Washington tomorrow to take part in the World Bank and IMF Spring Meetings on 12-13 April.

The global economic outlook will be a major theme of the IMF Spring Meeting, not least in light of the US housing crisis and the weakening global economy. Minister for Finance Anders Borg will represent the Nordic-Baltic constituency at the meeting of the IMF steering committee (IMFC) and will also address the meeting on behalf of the Nordic and Baltic countries.

An agreement has also been reached on reforms of members' voting power and influence in the Fund. "We are especially pleased that the voice of the poorest countries is now being strengthened. Voting power in the IMF must better reflect the strength of the fast-growing countries in the global economy and the agreement is acceptable from this perspective, even if Sweden would have preferred an agreement that went a little further," says Mr Borg.

The meeting of the Development Committee of the World Bank will discuss progress towards the achievement of the Millennium Development Goals. The World Bank notes that the outlook for Africa and 'fragile states', or post-conflict countries, is bleaker than that for other regions. The effects of high food and raw materials prices on developing countries are also on the agenda.

"At the Spring Meetings the Swedish Government will be focusing on gender equality and climate change. I will be chairing a side event organised by the World Bank, and in that context I will be putting particular emphasis on the importance of the participation of teenage girls and young women," says Gunilla Carlsson.

Press conference In connection with both Spring Meetings, journalists are welcome to attend a press conference with Minister for Finance Anders Borg, Minister for International Development Cooperation Gunilla Carlsson and Governor of the Riksbank Stefan Ingves.

Time and place Time: Friday 11 April at 14.00 Place: Embassy of Sweden in Washington, House of Sweden, 2900 K Street, Washington D.C.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Peter Larsson +46 8 405 10 00 2007

Press release 27 November 2007 Ministry of Finance Sweden's new convergence programme shows strong and sustainable public finances Public finances are strong and sustainable in the long term. This is evident from Sweden's ninth updated convergence programme, which was today submitted to the European Commission and the Council.

"It is gratifying that we have submitted a convergence programme that clearly shows that we have strong public finances. Sound public finances are a keystone of our policy for more jobs and less social exclusion. By prioritising this we lay the basis for favourable economic development," says Finance Minister Anders Borg. Related Report: Updated Swedish The convergence programme is based on the forecasts, estimates and proposals presented in the Government Convergense Programme Budget Bill for 2008. General government net lending is estimated to show a surplus of 2.9 per cent of GDP in 2007 2007 and 2.8 per cent in 2008. Consolidated gross debt in the general government sector, known as Maastricht debt, is estimated at 39.7 per cent of GDP this year and is forecast to fall to 24.5 per cent of GDP in 2010. Estimates made in the updated convergence programme for the period up to and including 2050 show that public finances are sustainable in the long term. GDP is estimated to increase by 3.2 per cent in both 2007 and 2008.

The economic targets remain unchanged. This means, among other things, that public finances should show a surplus of 1 per cent on average over a business cycle.

In accordance with the Stability and Growth Pact, Member States that are members of EMU should prepare stability programmes, while other Member States should prepare convergence programmes. These programmes are essential for monitoring public finances in the EU.

Contact Anna Charlotta Johansson Press Secretary +46 8 405 10 00 Markus Sjöqvist Press Secretary to Anders Borg +46 8 405 10 00 Håkan Jönsson Desk Officer +46 8 405 20 31

Press release 20 September 2007 Ministry of Finance Budget Bill for 2008: Putting Sweden to work - increasing opportunities In the Budget Bill for 2008, the Government is presenting further reforms aimed at creating clearer incentives to work and more and better ways back for people who are now outside the labour market. The Bill proposes further reductions in income taxes, above all for low and middle income earners, by means of a strengthened in-work tax credit worth SEK 11 billion. This will give most income groups a thousand kronor more per month.

Sickness absence, which has grown in recent decades, will be reduced by an ambitious investment in rehabilitation. The return to work will be facilitated by means of a rehabilitation chain with checkpoints at pre-determined times. The incentives for employers to recruit people from groups that are now particularly Related detached from the labour market - such as the long-term sick - will be further strengthened by measures including new start jobs for the public sector and "well again jobs". Press release: The Swedish Economy "This is a budget to put more people in work and to find more and broader ways back for those who are outside the labour market. It is a budget for the future that will strengthen the foundations for welfare provision and secure pensions, health care and social services. While we are putting resources into initiatives, Download we are still making sure that the public finances remain healthy and that we do not push the economy in a direction that may give rise to imbalances," says Minister for Finance Anders Borg. Table: Proposed and announced changes in expenditure and income The Government estimates that 175 000 fewer will be outside the labour market and at risk of social exclusion 2008-2010 (pdf 68 kB) in the coming years. In the years until 2010, employment is expected to rise by nearly 200 000 and unemployment to fall by more than 90 000.

Despite good growth, much still remains to be done to make Sweden a country of full employment again. The Government is therefore presenting a number of reforms aimed at creating clearer incentives to work and more and better ways back for those who are now outside the labour market.

Keeping public finances in good order All the Government's reforms are being made within the framework of a responsible policy keeping public finances in good order and aiming towards long-term healthy economic growth. The target of a one per cent surplus in general government net lending will be exceeded by a broad margin in the coming years. Net lending will be 2.8 per cent of GDP in 2008 and 3.1 and 3.6 per cent of GDP respectively in 2009 and 2010. Central government debt is expected to fall sharply from 43 per cent of GDP in 2006 to 20 percent in 2010.

A strengthened in-work tax credit to make it more worthwhile to work The Government proposes to boost the incomes of low and middle income earners in particular, by a total of SEK 11 billion. Strengthening the in-work tax credit will increase employment. It will be more worthwhile to start working and the incentives for people already working to increase their efforts will also improve. For most income groups the combined effect of two stages of the tax credit will be about SEK 1 000 more in take home pay every month.

More and better ways back for people on sick leave The Government proposes a series of measures to provide more ways to return from sickness absence to work and workmates. Maintaining a close link to the labour market while on sick leave will reduce the risk of long- term absence. A rehabilitation chain will be introduced, with fixed points during a period of sick leave for reviewing a person's capacity to work, and people on sick leave will receive better support in returning to the labour market. A rehabilitation guarantee will be introduced and occupational health services improved. Employers will be offered more favourable terms for recruiting people on long-term sick leave. Special new start jobs, called "well again jobs", are being introduced. In most cases these mean that employers can deduct double employer's social security contributions when they employ people who have been receiving sickness benefit, rehabilitation cash benefit or sickness or activity compensation for at least a year.

A well-functioning labour market for more jobs The Government intends to extend the new start jobs scheme to include the entire public sector, which will benefit health and social care. A change in contributions to unemployment insurance funds is also proposed, replacing the increased financing contribution with an unemployment contribution. The Government wants to create a clearer connection between unemployment insurance contributions and unemployment, so as to improve the functioning of the labour market and increase employment. The contribution will therefore be raised or lowered depending on whether unemployment increases or decreases. Because of the fall in unemployment, a majority of the unemployment insurance funds will be able to reduce their contributions as a result of this proposal. However, just as is already the case for unemployed people, unemployed sick people will not need to pay this contribution.

New rules are proposed for part-time unemployment benefit. The number of benefit days that can be used in cases of part-time unemployment will be limited to 75 benefit days. The point of this is to reduce overuse and reduce the risk of people becoming permanently locked in into part-time work. The present rules make it possible to be part-time unemployed for a very long period, up to almost six years in the case of a person receiving benefit one day a week. For distributional reasons, however, lone parents responsible for the support of children under the age of 18 will be offered part-time employment under the job and development guarantee when they have used up their 75 days. In addition, in 2008 new start jobs will be introduced for people who have been part-time unemployed for at least two years.

To strengthen incentives for people in work who change jobs to do so without an interim period of unemployment, the Government is introducing a further two qualifying days for unemployment insurance.

A good business climate The Government proposes increased resources for infrastructure to reduce transport costs, increase reliability of supply and contribute to an enlarged labour market that supports increased labour force participation.

The Government intends to simplify the rules for business tax status and reinforce priority rights for floating charges. The establishment of a regulatory council is announced as part of the work to limit administrative costs to businesses arising from government regulations.

Increased knowledge and quality in the educational system Sweden must have an educational system of a high international standard. The Government proposes an extensive reading-writing-arithmetic initiative over the next three years to strengthen the promotion of knowledge in compulsory school. Establishing necessary reading, writing and arithmetic skills early can in the long run help reduce the number of compulsory school leavers with insufficient knowledge and incomplete grades. Increased resources to higher education are proposed to improve quality. Additionally, investments will be made in medical training.

Greater gender equality in everyday life Lower tax on household services, lower tax in certain service sectors, the opportunity for new start jobs in the public sector and continued efforts to stimulate women's entrepreneurship will strengthen and broaden the labour market for women. A gender equality bonus will increase the prospects of a gender-equal use of parental insurance and of women returning to work during a child's first year of life. The option of reducing the workload at home, through household services and later a childcare voucher system, makes it possible to reduce women's unpaid double workload, which is good both for women's career opportunities and for the family's various needs.

Greater freedom of choice for families The Government is now announcing a four-part reform of family policy: a childcare voucher system, increased educational content in preschool, a gender equality bonus and a voluntary municipal child-raising allowance. The reform will be implemented in stages. The Government proposes the introduction of a gender equality bonus. The proposal will improve conditions for gender equality, counter unjustified pay differentials by making it more financially possible for families to share parental leave more equally, and strengthen incentives to return to work. In addition, the Government intends to open the way for municipalities to introduce child-raising allowances so as to increase opportunities for parents with children aged between one and three to be at home a little longer after the end of their parental leave.

More scope for welfare initiatives The Government intends to continue its work for greater diversity in health care and will propose freedom of establishment in primary care services. Health care and social services must continue to be jointly financed and distributed according to need. The health care guarantee will be enhanced and the quality of psychiatric services and health care as a whole will be improved. The Government proposes a dental reform to give greater protection against high costs and provide good conditions for dental services. The social security systems will be protected and fraud prevented.

Measures to combat climate change The Government proposes a climate package including tax increases in the energy area aimed at limiting carbon dioxide emissions, and presents the contents of the "climate billion". The special condition (the "customs condition") under which ethanol in a low-percentage blend with petrol qualifies for tax exemption, should be discontinued as soon as possible and at the latest by 1 January 2009. The Government intends to present a climate bill next year.

Real estate tax The present real estate tax is unfair and lacks popular support and legitimacy. The Government has already announced that the national real estate tax on housing will be abolished and that it will be replaced by a low local government charge. In view of this, the Government considers that the current rules should be replaced by a local government charge of SEK 6 000 per single-family home, though no more than 0.75 per cent of the assessed value, and a charge of SEK 1 200 per housing unit in multi-dwelling buildings, though no more than 0.4 per cent of the assessed value, while the tax on capital gains from the sale of private homes should be raised from 20 to 22 per cent. Deferred capital gains will be subject to interest corresponding to 0.5 per cent of the amount deferred, with a ceiling of SEK 1.6 million on deferred capital gains. When the real estate tax is replaced by a local government charge, the present limitation rule, which normally limits real estate tax to 4 per cent of household income, will also disappear. However, an equivalent limitation rule will be retained for pensioners.

More effective defence Sweden's military defence is undergoing a transformation from defence against invasion to operational defence. As a further step in completing this transformation, and as an expression of the Government's ambition to make the armed forces more effective and increase their ability to participate in international operations, certain defence equipment projects are now being reviewed. The Government believes that even after the review now described in the Budget Bill there is potential for improving effectiveness in the armed forces. It is estimated that overall reductions in expenditure of the order of SEK 3-4 billion will be possible, including the savings announced in this Bill. Some of the funds freed can be used to increase the ability of the Armed Forces to participate in international peace-support operations.

Responsible financing The bulk of the expenditure and income reforms now being proposed are financed, which is important in view of the high level of resource use in the economy. The proposed reforms mainly include measures intended to increase the labour supply and reduce ill health. It has also been necessary to carefully review other expenditure areas, as in the case of defence equipment. In addition, to ensure that necessary supply-side reforms do not contribute to excessive growth in demand, certain tax changes are also required. Increased taxes on tobacco, alcohol and carbon dioxide, for example, have therefore been considered reasonable. These are taxes that are not considered to affect the underlying employment trend or willingness to invest. The table below presents some major reforms and their financing. All in all the proposals mean that most of the measures will be financed via direct regulatory amendments that strengthen the budget.

Press release 20 September 2007 Ministry of Finance The Swedish Economy Sweden's gross domestic product (GDP) is set to grow by 3.2 per cent in both 2007 and 2008. Open unemployment is forecast to decline to 4.4 per cent in 2007 and 4.0 per cent in 2008. General government net lending is projected at 2.9 per cent of GDP in 2007 and 2.8 per cent of GDP in 2008.

Global economy set for solid growth Global growth is set to taper off in 2007 and 2008. But the slowdown is likely to be relatively modest, and growth should remain high from an historical point of view. U.S. GDP is increasing more slowly in 2007 due to Download the weak housing market, but growth is expected to recover partially in 2008. In response to a more cautious Tables to the press release investment climate, less vigorous growth is anticipated in the euro area in 2007 and 2008. Asian economies (pdf 114 kB) are still delivering very rapid growth. Recent turbulence in the financial markets has made the forecast more uncertain, but at present only limited impact on global economic growth is expected.

Sweden's GDP and labour market continue to perform strongly Sweden's GDP is projected to grow rapidly in 2007 and 2008. Growth in goods exports has decelerated in 2007 but is likely to recover in 2008 as demand for Swedish products abroad picks up again. The strong momentum in investment growth over the past few years will culminate in 2007. Due to rapidly increasing disposable income, rising employment and a solid wealth position, household consumption is projected to improve substantially. Strong finances in the local government sector are driving growth in the sector's consumption.

Demand for labour is strong, the number of newly reported vacancies is high and firms are planning to hire more people. As a result, employment is expected to continue rising in 2007 and 2008. Rapid expansion is anticipated in hours worked, particularly in 2007, leading to a slowdown in productivity growth. Labour supply is set to increase considerably in 2007, followed by more moderate growth. Substantial declines in open unemployment, as well as unemployment according to the definition of the International Labour Organization (ILO), are expected in 2007 and 2008.

The percentage of firms reporting labour shortages has risen progressively in tandem with higher employment. Wages are set to grow faster in the next few years due to increasing resource utilisation and finalised collective agreements, which are accelerating inflationary pressure. The Riksbank is expected to respond by raising the repo rate to a maximum of 4.75 per cent in 2009. The cumulative impact is likely to dampen Swedish economic performance in 2009 and 2010. The reforms that the government has announced and adopted since taking office are set to considerably boost employment and GDP in the long run.

Public finances General government net lending in 2006 totalled SEK 67 billion, or 2.4 per cent of GDP. At the end of 2006, financial assets exceeded liabilities by SEK 444 billion, or 15.7 per cent of GDP. Consolidated gross debt was 47 per cent of GDP, well below the EU reference value of 60 per cent.

Tax cuts previously adopted and currently proposed will substantially reduce tax receipts as a percentage of GDP in 2007 and 2008. Because the reduction in expenditure as a percentage of GDP will be even greater, net lending will improve compared to 2006. The financial surpluses will continue to bolster the general government sector's net financial position. Consolidated gross debt is expected to be 24.5 per cent of GDP in 2010.

Net lending and the structural balance are both expected to exceed 2 per cent of GDP in 2007-2010, ensuring an adequate margin to the surplus target of 1 per cent of GDP on average over a business cycle.

Both the financial results and net lending of the local government sector are expected to continue showing surpluses in 2007-2010.

For a comprehensive presentation of macroeconomic and public finance forecasts, refer to "The Swedish Economy", Appendix 2 to the Government Budget Bill for 2008, at www.regeringen.se, scheduled for release in English at the end of September. Contact Per Jansson Statssekreterare Henrik Braconier Director +46 8 405 14 64 +46 70 791 10 20

Matts Karlson Director +46 8 405 13 98 +46 70 686 77 90

Press release 16 April 2007 Ministry of Finance The Swedish Economy Sweden's gross domestic product (GDP) is expected to grow by 3.7 per cent in 2007 and 3.3 per cent in 2008. Total unemployment, measured as the annual average, is forecast to decline from 8.4 per cent in 2006 to 6.7 per cent in 2007 and 6.2 per cent in 2008. General government net lending is projected at 2.3 per cent of GDP in 2007 and 2.2 per cent in 2008.

Global economy set for solid growth Due to the weak housing market, GDP is expected to grow more slowly in the United States this year. Given that growth in the euro area is also likely to be less vigorous in 2007 and 2008, the global economy will grow Related more slowly as well. But because the slowdown is set to be relatively modest, global growth should remain at a From the Spring Fiscal Policy high historical level. Bill 2007: Sweden's Economy (Summary)

Swedish GDP and labour market to perform well Sweden's GDP growth is expected to taper off in 2007 and 2008 but remain high. Exports are set to grow at a Download brisk pace, though somewhat more slowly in line with less vigorous global growth and a stronger Swedish Tables to the press release krona. While growth in investment is also likely to decelerate, high capacity utilisation and propitious (pdf 110 kB) financial prospects for businesses indicate that the level of investment will remain buoyant. Due to rapidly growing disposable income, rising employment and a solid initial wealth position, household consumption is projected to increase substantially. Spurred primarily by solid revenue growth, public consumption is set to rise most rapidly in the local government sector.

Demand for labour is strong, the number of newly reported vacancies is high and businesses are planning to hire more people. As a result, employment is expected to continue rising in 2007 and 2008. The labour supply is set to increase substantially in 2007, followed by slower growth. Partly owing to the reforms proposed by the Spring Fiscal Policy Bill, unemployed people will look for jobs more actively and efficiently than before. Open unemployment is likely to decrease substantially in 2007 and 2008. As a result of major cutbacks in labour market policy programmes this year, total unemployment - consisting of people who are either openly unemployed or participating in the programmes - will decrease more than open unemployment in 2007.

Inflation is low and should slow down this year as the Swedish krona strengthens and energy prices decline. Owing to strong demand for labour, resource utilisation in the labour market is expected to be tight in 2008. The likely result will be a gradual acceleration of wage growth and inflation in 2008 and 2009. Faced by rising wages and inflation, the Riksbank is expected to raise its repo rate to a maximum of 4.75 per cent during 2009. In sum, the effect should be a slowdown in employment and GDP growth in 2009 and 2010 to below the potential growth rate. The reforms that have been announced and adopted since the government took office are set to considerably impact employment and GDP in the long run.

Public finances Starting with the Spring Fiscal Policy Bill, general government net lending does not include premium pension savings (PPS). Pursuant to a Eurostat decision, PPS will be part of household savings instead. The change reduces general government net lending by 1 per cent of GDP. In view of the decision, the government is proposing that the surplus target be modified to 1 per cent of GDP over a business cycle. In order to strengthen the fiscal policy framework, the Spring Fiscal Policy Bill proposes a number of additional measures, including a return to three-year expenditure ceilings.

General government net lending in 2006 totalled SEK 60 billion, or 2.1 per cent of GDP, excluding PPS (3.1 per cent including PPS). At the end of 2006, financial assets exceeded liabilities by SEK 444 billion, or 15.6 per cent of GDP. The consolidated gross debt was 46.9 per cent of GDP, well below the EU reference value of 60 per cent.

Favourable economic growth leaves room for the adoption of tax cuts and other reforms. Tax cuts previously approved and currently announced will substantially reduce taxes and revenue as a percentage of GDP. Because expenditures will decrease at the same rate as revenue, net lending will be essentially unchanged from 2006 at just over 2 per cent of GDP in both 2007 and 2008.

Net lending will gradually strengthen in 2009 and 2010. The financial surpluses should continue to bolster the general government sector's financial position. The central government debt and consolidated gross debt will decrease further when the planned divestment of state shareholdings is carried out. The consolidated gross debt is expected to be 27 per cent of GDP in 2010.

Net lending is projected to average 2 per cent in 2004-10, as opposed to 1.1 per cent in 2000-06.

The structural balance is set to substantially exceed 1 per cent of GDP in 2007-10.

Expectations are for the financial result and net lending of the local government sector to continue showing relatively large surpluses in 2007-10.

For a more thorough account of macroeconomic and public finance forecasts, please refer to Appendix 1 of the Spring Fiscal Policy Bill at www.sweden.gov.se.

Contact Per Jansson Statssekreterare Henrik Braconier Director +46 8 405 14 64 +46 70 791 10 20 Matts Karlson Director +46 8 405 13 98 +46 70 686 77 90

Press release 16 April 2007 Ministry of Finance The 2007 Spring Budget: Policies for more people in work and better opportunities for enterprise In the spring budget, the Government continues its active policies to overcome social exclusion and give more people an opportunity to work. The Spring Fiscal Policy Bill presents a comprehensive package to improve the climate for business in Sweden. The Government is also proposing a special jobs package to make it easier for more people to enter work. New ways into work will be opened by offering long-term unemployed people and people receiving social assistance a job and development guarantee. In addition, the Government is acting to lower employer's social security contributions so as to get young people into the labour market. An integration package including new 'step-in' jobs, in which work and language training are combined, will increase opportunities for newly arrived immigrants to obtain work. Overall, these initiatives for young people, immigrants and enterprise mean the Government is responding to the economic boom with measures that provide increased working opportunities to the groups that have had the greatest difficulty getting into the labour market.

"We are now beginning to see results from the Government's policies. According to estimates in the Spring Fiscal Policy Bill, the number of people in regular employment will increase by 185 000 by 2009. Over the same period, total unemployment will fall by nearly 100 000," says Minister for Finance Anders Borg.

"The most pleasing result, perhaps, is that social exclusion will also decline. In 2006 the equivalent of 1 050 000 people were outside the labour market and were dependent on various types of social benefits and allowances. On our current calculations, that number will be reduced to 890 000 in 2010. This will mean 160 000 people will have come out of exclusion in the course of this electoral period," says Mr Borg.

The Swedish economy The Swedish economy is very strong. In the autumn budget, the Government foresaw GDP growth of 3.3 per cent this year. Now we are revising the growth forecast for 2007 up to 3.7 per cent, while the forecast for 2008 is being revised up to 3.3 per cent. Good income growth, rising employment and low interest rates are resulting in strong consumption growth. Investments in the Swedish economy are being driven by strong foreign demand, high capacity utilisation and low interest rates, but also by improvements in the domestic business climate.

Employment and unemployment The demand for labour is strong and the employment rate will therefore continue to rise in 2007 and 2008. The Government's policies are contributing to increased employment. Open unemployment will decline sharply in 2007 and 2008. Total unemployment, i.e. the sum total of openly unemployed people and people in labour market policy programmes, will fall even more steeply.

Stable finances Stable public finances are the foundation for long-term sustainable growth. Despite major spending initiatives in this budget, the level of saving (net lending) will be over 2 per cent of GDP this year and next. But the Government will not rest content with this. The present fiscal policy framework has served Sweden well, but the Government wants to make further improvements. To this end, the Government has begun a review of the framework to clarify the connection between central government expenditure and the public finances surplus target set by the Government. The ambition is to make it easier to evaluate the fiscal policy targets. The Government will also appoint a fiscal policy council to follow up government policy under an independent mandate. The purpose of all these measures is to maintain long-term stability in the public finances so as to maintain strong welfare provision in the long run.

Inflation The Government's policies to increase the supply of labour will act to cool inflationary pressures in the coming years. However, next year inflationary pressures will grow as resource utilisation in the labour market rises and wage costs increase. The underlying inflation rate, measured by the UND1X measure used by Sweden's central bank, the Riksbank, is expected to remain low this year before rising to 1.9 per cent at the end of 2008. According to estimates, UND1X inflation will rise a little higher still in 2009 before falling back to just over 2 per cent at the end of 2010.

Tax ratio The tax ratio is falling sharply - from 49.8 per cent of GDP in 2006 to 47.7 per cent of GDP this year and slightly lower in 2008. This will be the lowest tax take since the mid-1980s. National debt The national debt is expected to fall from 43 per cent of GDP at the end of 2006 to 23 per cent at the end of 2010. The Riksdag decision to allow the Government to sell six partly or wholly owned state companies will contribute approximately half the expected reduction.

Packages for enterprise, integration, young people and jobs In the spring budget, the Government is presenting a broad package of reforms in four areas.

Firstly, it will become simpler and more profitable to start and run a business. One measure to achieve this will be to abolish wealth tax so as to increase the amount of venture capital.

Secondly, we are launching a package of reforms to strengthen the integration of people with a foreign background. This will include 'step-in' jobs in which employment is combined with language instruction and elements of mentorship for newly arrived immigrants.

Thirdly, the Government wants to fight youth unemployment by measures including lower employer's social security contributions for young people, a special job guarantee including a more rapid reduction of income-related compensation, and an initiative for apprenticeship and vocational training.

Fourthly, the Government proposes a special jobs package to make it easier for more people to enter work. New ways into work will be opened by offering long-term unemployed people and people receiving social assistance a job and development guarantee.

The enterprise package In the spring budget, the Government is launching a large and broad package for entrepreneurs. The VAT accounting period will be extended from the present one month to quarterly payment for companies with an annual turnover below SEK 40 million. In 2008, a proposal will be presented for transferring forest accounts in connection with generational change. Wealth tax will be completely abolished as from 1 January 2007. This increases incentives for companies and private individuals to repatriate capital that can be used to the advantage of their business. But above all, the Government believes that capital that would otherwise have left Sweden will stay. As it will lead to an increased amount of venture capital, the abolition of the wealth tax is an important factor in strengthening enterprise in Sweden.

In order to finance the abolition of the wealth tax in a way that is appropriate in terms of distribution policy and to reduce the risk of a loss of tax revenue, the Government will present a proposal later this year to limit the general tax deduction for pension savings to SEK 12 000 per year. The new rules are to apply from 1 January 2008.

The reform of the '3:12 rules' will continue with proposals in the spring for changes in capital gains taxation. A special evaluation will be made to provide a basis for continued regulatory reform in the future. An inquiry will be set in motion during the spring to review the rules for F tax (self- employed tax status).

To further improve the supply of capital to enterprises, the Government wants to strengthen the preferential rights enjoyed by business mortgages. An inquiry is to present proposals on improved preferential rights by 30 September 2007. To take account of possible changes regarding the state's wage recovery rights, the Government is setting aside SEK 150 million in 2008 and SEK 350 million per year in 2009 and 2010 besides what was set aside in the autumn Budget Bill.

Studies show that people born abroad who are starting a business may have greater difficulty obtaining loans than other entrepreneurs and that other barriers also hinder entrepreneurship by immigrants. SEK 20 million is therefore being allocated for special measures to support entrepreneurship by immigrants. SEK 80 million will be provided to ALMI Business Partner, partly for use in helping immigrant entrepreneurs.

The proportion of women entrepreneurs in Sweden is low. The Government has policies that in many different ways encourage entrepreneurship by women. By allowing increased competition in the health and social care sector, for example, the door will be opened for more entrepreneurs, which will largely favour women who want to start their own businesses in the health care sector. The autumn Budget Bill put SEK 100 million into women's entrepreneurship and NUTEK has now drawn up proposals in this area that are currently being studied at the Government Offices.

In the future, there may also be reason to look over the Swedish corporate tax rate with a view to stimulating investment and enterprise in Sweden. In addition, the Government is taking measures to improve competition in the markets, for example, by providing increased resources to the Swedish Competition Authority and to efforts to develop systems for resolving conflicts concerning competition between public and private sales activities.

The Swedish Agency for Innovation Systems Forska&Väx (Research&Grow) programme will continue, so as to enhance opportunities for SMEs to engage in research and development. Funds are also being committed to a vigorous drive in environmental technology.

The Government has recently proposed the introduction of a possibility of tax relief for household services from 1 July 2007. Work is also under way on developing proposals for reduced employer's social security contributions in certain service sectors.

The integration package The labour market situation is particularly difficult for many of those who were born abroad. The Government's broad jobs policy also favours these groups generally, but even more specific measures are needed to get more people with foreign backgrounds into jobs. The Government is therefore launching a special integration package with a combination of measures that together aim to promote a speedier entry into the labour market. The public employment offices will receive augmented resources for professional assessment so as to ensure that newly arrived immigrants are offered assessment of their previous professional experience. In addition, the National Commission on Validation will be instructed to start pilot activities to validate the skills of 1000 people using special industry-specific models.

The Government is also putting resources into supplementary professional education for lawyers and people educated in health and medical services. Swedish municipalities must also be able to make it easier for newly arrived refugees to enter the labour market. For each person who has received a pass grade in Swedish for Immigrants (SFI), obtained a job or work placement, municipalities that have signed an agreement to accept refugees will receive an extra SEK 20 000. The Government also intends to find means of strengthening incentives for individuals to speed up their entry into the labour market. One such incentive could be a bonus for individuals who pass a course in SFI or obtain work within a certain time. This issue is being studied by the Government Offices.

Moreover, 'step-in' jobs will be introduced, targeting newly arrived refugees and consisting of subsidised employment in the private or public sector combined with Swedish studies. The wage subsidy will amount to 50 per cent in the public sector and 75 per cent for private employers and public sector employers engaged in business activities. Employment will be tied to participation or achieved results in Swedish for Immigrants and is to involve clear elements of mentorship.

Measures for young people in the labour market With Sweden now experiencing a business boom, it is extra important that government policies help those who are particularly detached from the labour market. The young are a case in point. From 1 July 2007, employers taking on a person aged between 20 and 24 will pay a lower rate of social security contributions.

The Government also wants unemployed young people to receive extra support. A job guarantee will be introduced for young people aged between 16 and 24, from 1 December 2007 onwards. Under the job guarantee, there will be increased follow-up and support for young people seeking work. For those who despite this still do not get a job, active matching efforts will be combined with augmented measures such as work placements or education and training. The Government is also putting resources into strengthening apprenticeship programmes and is permanently increasing the number of places in advanced vocational training by 2000.

The jobs package The central objective of government policy is to permanently increase employment. Tax policy has therefore been given the focus of making work more worthwhile. A first step was taken as early as 1 January 2007 in the tax deduction for work. If government finances allow, the Government intends to continue by taking another step on 1 January 2008. However, the jobs policy has other components as well and as from 2 July 2007 we will be reinforcing the role of unemployment insurance as adaptation insurance. Among other things, jobseekers will face increased demands that they are active and also look for work further afield. The new job and development guarantee for the long-term unemployed will be introduced on 2 July 2007, with a view to getting participants into the labour market as quickly as possible. The initial focus will be on intensified jobseeker activities including coaching. In a second phase, there will be opportunities for work placement, work training, subsidised employment and skills enhancement. In a third phase, after 450 days, the jobseeker will be assigned to permanent employment of public benefit.

The Government's 'new start' jobs initiative, in which the employer is exempt from paying social security contributions for as long as the person employed has been outside the labour market, has already begun to yield results. By the beginning of April, 4 753 people had obtained a 'new start' job. The Government also wants to make it more worthwhile for pensioners and people receiving activity or sickness compensation to work. The design of the housing supplement for these groups is therefore being changed. Previously the supplement was reduced by 50 öre if the recipient's wages increased by 1 krona, but from 1 January 2008 it will only be reduced by 31 öre when income rises by 1 krona, making it more profitable to work.

To make it more attractive for companies to retain and employ older workers, the Government is now going further and proposing that on 1 January 2008, the special employer's contribution also be abolished for people who do not come under the reformed pension system, i.e. people born before 1938. The special employer's contribution has already been abolished, from 1 January 2007, for people born in 1938 or later.

Other initiatives

Initiatives in response to an increased number of asylum seekers The Government believes that Sweden should have a humane and generous refugee policy. Over the years, immigration has made great contributions to Sweden's growth and the Government considers it important that the humane refugee policy continues and that we provide a meaningful existence to the people who come here.

The number of people seeking asylum in Sweden has increased in recent years, partly as a result of the situation in Iraq. In 2006 over 24 000 people applied for asylum and this year the number is expected to approach 40 000. Sweden accepts a very large share of the Iraqis who come to the EU. The Government is taking several different initiatives in response to the sharply increased numbers. In order to ensure a dignified reception and a speedy processing of asylum cases, the Government is boosting the resources available to the Swedish Migration Board by SEK 550 million in 2008. The appropriation for benefits and housing costs is being increased by SEK 743 million this year. In 2008 and 2009 there will be inputs of SEK 900 million and SEK 1000 million respectively.

The Government also considers that central government compensation to the municipalities that accept unaccompanied minor refugees must increase and it is therefore allocating SEK 15 million extra to this purpose in 2007 and additional funds in 2008 and 2009. In order to create conditions for a dignified return for people whose asylum applications are rejected, the Government is introducing reestablishment support for individuals and families. The appropriation for benefits and housing costs is therefore being increased by SEK 27 million in 2007. Real estate tax to be abolished and replaced by a low local government charge The national real estate tax will be abolished from 1 January 2008. The details will be analysed by a working group at the Government Offices, which is to present proposals in June 2007. In the model that is being studied, a local government real estate charge will be introduced at a rate of SEK 4500 per housing unit for single-family houses, though no more than 1 per cent of the assessed value, and a rate of SEK 900 per housing unit in multi-dwelling buildings, though no more than 0.4 per cent of the assessed value. This model entails a tax revenue loss of SEK 16.3 billion. SEK 10.3 billion of this will be financed by the local government real estate charge and the remaining SEK 6 billion by raising the tax rate on capital gains from 20 to 30 per cent.

According to the Government's preliminary assessment, the model will have positive consequences in several respects, but if further analysis indicates undesired impacts on income distribution between income brackets or regions, mobility in the housing and labour markets or public finances, the working group is free to test alternative ways of abolishing the national real estate tax. The reform must be fully financed within the housing sector and no one is to pay more in real estate charges than they would have done under the previous rules.

Climate and environmental initiatives The Government has a high level of ambition with regard to climate policy. Sweden was one of the leading EU countries in bringing about an agreement on reduced greenhouse gas emissions at the EU summit in March 2007. Emissions are to be 20 per cent lower in 2020, compared with 1990 levels. In Sweden, the Government is implementing a range of concrete measures to reduce emissions. From 1 April anyone buying a green car will receive a cash grant of SEK 10 000. The Government will continue its commitment to measures aimed at promoting more efficient energy use, so as to cool the demand for energy. From 2008 onwards, SEK 140 million per year will be set aside for this purpose. The threat to the Baltic Sea and the Skagerrak and Kattegat is another urgent challenge and the problems of marine eutrophication must be taken seriously. SEK 40 million will be set aside for marine environment initiatives this year and in 2008-2010 the Government estimates spending measures of SEK 450 million.

Psychiatric services The psychiatric services are unable to meet the demands for well-functioning care of mentally ill people and support for their families. In the Budget Bill for 2007, the Government therefore committed an extra SEK 500 million for the current year to strengthen psychiatric care. The Government estimates that a similar amount should be allocated in 2008 and SEK 250 million in 2009.

More money for vaccines Preparedness must be ensured to meet the threat of a pandemic. The Government is therefore setting aside SEK 300 million per year in 2008 and 2009. SEK 400 million will be set aside for 2010. This money is to be available for use, if necessary, firstly, so as to enter into an agreement with a vaccine producer that will guarantee access to vaccines in the event of a pandemic (pandemic guarantee), and secondly, so as to begin to build up a capacity to produce vaccines.

Regional development policy The Government is putting money into the transport grant system to equalise competitive conditions between companies in different parts of Sweden. The system aims to compensate for the higher transport costs faced by companies in the four northernmost counties of the country, and from 2007 this appropriation will be boosted by SEK 90 million per year.

Infrastructure The largest actors in passenger transport have initiated a plan of measures to reduce the considerable disruptions in railway traffic in the Stockholm/Mälardalen region. The Government will put in an extra SEK 125 million in 2007 to speed up the work.

Policies for education and skills The Government has begun work on an extensive reform of the Swedish education system. The work aims to focus on the duty of schools to promote knowledge, and to enhance the status of the teaching profession. The school system must change so as to give all students an opportunity to acquire knowledge and develop the skills they need as a basis for successful future studies and working life. Every student, regardless of sex, family background, place of residence or any other factor, is entitled to absorb and develop the knowledge he or she needs in order to be an active member of a democratic society. Compulsory school must also lay the necessary foundation for upper secondary school studies. At present, so many objectives have been set for schools that they tend to get in the way of each other and the duty to promote knowledge has ended up in the background. The objectives set for compulsory school must therefore be fewer and clearer.

The Government will bring in trial upper secondary school apprenticeship programmes, beginning in the 2008/2009 academic year. The planning and implementation will require close cooperation between schools and the social partners. The trial scheme will initially take in 4000 upper secondary school students beginning in autumn 2008 and will be available in national and specially designed vocationally oriented programmes. This initiative in the Spring Fiscal Policy Bill comes to SEK 65 million in 2008, SEK 175 million in 2009 and SEK 275 million in 2010.

More effective use of common resources The Government's ambition is for public resources to be used in a more effective and efficient way. Public resources must go to their intended purpose.

The Government therefore proposes a broad programme of measures to tackle overutilisation. A Government Bill for a new act on benefits offences was recently presented to the Riksdag, proposing clearer rules and legislation against overutilisation of various benefits. An inquiry has also been instructed to draw up proposals for a special supervisory body that will be separate from the Swedish Social Insurance Agency. The Government will propose more stringent controls on claims for temporary parental benefit. The Swedish Agency for Public Management will also evaluate the effectiveness of procedures in connection with repayment to the state of wrongly paid out benefits.

The Government also wants increased effectiveness and efficiency in the public sector and a register of Swedish government agencies will therefore be established. Furthermore, an inquiry has been appointed to clarify what the commitments of central government should be and which overall principles should apply to the organisation of the central government administration. The inquiry is also to indicate measures that can reduce administrative costs by three to six per cent, which is equivalent to savings of between SEK 5 billion and SEK 10 billion.

Contact Anna Unsgaard Press Secretary to Anders Borg Jörgen Eklund Head of Planning to Anders Borg +46 8 405 26 02 email to Jörgen Eklund, via the Senior registry clerk Caroline Raxell Political Adviser +46 8 405 10 00 Anna Charlotta Johansson Political Adviser +46 8 405 12 76 +46 70 371 00 76 email to Anna Charlotta Johansson, via the Senior Registry Clerk Linus Adolphson Political Adviser +46 8 405 14 37 +46 70 206 66 57 2006

Press release 07 December 2006 Ministry of Finance Sweden's Updated Convergence Programme shows strong public finances Sweden's economy is growing strongly and the public finances are in surplus. This is the message in Sweden's eighth updated convergence programme, which has been delivered to the EU Commission and Council today.

- The Swedish economy is doing well. Sound public finances are a cornerstone of economic policy and are vital to our ability to manage future welfare commitments, comments Minister for Finance Anders Borg. Related GDP is expected to rise by 4.0 per cent in 2006 and 3.3 per cent in 2007. General government net lending is predicted to show a surplus of 2.8 per cent of GDP in 2006 and 2.3 per cent in 2007. General government Updated Swedish consolidated gross debt (Maastricht debt) is predicted to be 46.5 per cent of GDP this year, falling to 33.0 per Convergence Programme cent of GDP in 2009. 2006

Under the Stability and Growth Pact the EU countries participating in the currency union have to draw up stability programmes. Other Member States are required to draw up convergence programmes. These programmes are central to the surveillance of public finances in the EU. The programmes must specify medium-term budgetary objectives for the consolidated general government sector, expressed as a percentage of GDP. Under the Pact, countries undertake to achieve either a balanced budgetary position or a surplus, but each Member State is free to set its own specific objective. However, the budgetary objective is not allowed to be less than -1 per cent of GDP.

The convergence programme is based on the forecasts, estimates and proposals presented in the Budget Bill for 2007. The economic objectives remain firm. This means that general government finances are required to show a surplus of 2 per cent on average over a business cycle.

Contact Anna Unsgaard Press Secretary to Anders Borg Yngve Lindh Senior Economic Advisor +46 8 405 14 67

Press release 16 October 2006 Ministry of Finance Sweden's Economy

Sweden's gross domestic product (GDP) is expected to grow by 4.0 per cent in 2006 and 3.3 per cent in 2007. Total unemployment, measured as the annual average, is likely to decline from 8.7 per cent in 2006 to 7.7 per cent in 2007. The surplus in public finances is projected at 2.8 per cent of GDP in 2006 and 2.3 per cent in Related 2007. From the Budget Bill for 2007: 's Economy (Summary) Global economy set for solid growth Due partially to a weakening real estate market, growth in the United States is expected to slow down in 2007. Following a strong year in 2006, growth in the euro zone countries and Japan is also likely to be somewhat Download lower in 2007. Partly because GDP increases are set to remain rapid in the high-growth Asian and Latin American economies, global growth should still be high in both 2006 and 2007. Tables: Assumptions for the forecast, Selected statistics, Demand and output and General government finances Swedish GDP and labour market likely to perform well (pdf 112 kB) Sweden's GDP is expected to exhibit strong growth in 2006 and 2007. Due partially to greater demand for Swedish products abroad and a favourable competitive business climate, exports are facing solid increases, particularly in 2006. While the growth of investment is set to slow down, high capacity utilisation and propitious financial prospects for businesses suggest that the level of investment will remain high. Along with rapidly increasing employment, proposed income tax reductions should help household consumption to grow substantially. Spurred primarily by solid municipal finances, public consumption is set to rise most rapidly in the local government sector.

Demand for labour is strong, the number of newly reported vacancies is high and businesses are planning to hire more people. As a result, employment is expected to rise further. Many of those who have been outside the labour force have entered the labour market. The higher labour supply is favouring greater employment in the long run and offsetting manpower shortages. The reforms proposed in the budget bill are set to positively impact employment and the labour supply, and lead to lower unemployment. Once the number of participants in labour market programmes has decreased, open unemployment is expected to rise somewhat in 2007. But total unemployment - people who are openly unemployed and those who participate in labour market programmes - is likely to decrease significantly.

While resource utilisation in the labour market is currently low, it is set to gradually increase. Wage growth is expected to speed up but remain modest. Rising domestic inflationary pressure and mortgage rates should be offset by a stronger krona and falling oil prices. All in all, inflation is likely to increase.

For 2008 and 2009, the forecast is based on assessments of available resources and the economy's potential growth rate. The calculation assumes that full resource utilisation will be achieved in 2009. The labour market will probably have some remaining vacancies at the end of 2007. As a result, employment and GDP can continue to exhibit solid growth in 2008 and 2009 without running the risk of excessive inflation. GDP is expected to grow by 3.1 per cent in 2008 and 2.7 per cent in 2009. Total unemployment is projected to fall to 5.8 per cent in 2009. The proposals presented in the budget bill should substantially boost potential employment, average working hours, productivity and GDP.

Public finances The surplus in public finances totalled SEK 74 billion, or 2.8 per cent of GDP, in 2005. At the end of 2005, financial assets exceeded liabilities by SEK 331 billion, or 12.4 per cent of GDP. The consolidated gross debt was 50.3 per cent of GDP, well below the EU reference value of 60 per cent.

The surplus in public finances is expected to remain unchanged in 2006 at 2.8 per cent of GDP, almost 1 percentage point more than forecast by the 2006 Spring Fiscal Policy Bill. The improvement will be due in equal measure to higher revenue and lower expenditures. In 2007-09, both revenue and expenditures are likely to decrease as a percentage of GDP. The surplus in public finances is projected at 2.3 per cent of GDP in 2007, after which it should rise in 2008 and 2009.

The finances of the local government sector are set to improve further this year, while surpluses when it comes to both outcome and finances are expected to remain relatively high throughout the forecast period.

Thanks to the surplus in public savings, the public sector's financial position is set to continue strengthening throughout the forecast period. Planned divestments of state shareholdings should contribute to a large budget surplus in 2007-09, thereby substantially reducing both the central government debt and consolidated gross debt.

General government structural balance is estimated at 2.4 per cent of GDP in both 2006 and 2007.

For a more thorough account of macroeconomic and public finance forecasts, refer to Appendix 2 of Sweden's Economy at www.sweden.gov.se.

Contact Hans Lindblad State Secretary +46 8 405 48 39 email to Hans Lindblad, via the Senior registry clerk Henrik Braconier Director +46 8 405 14 64 +46 70 791 10 20 Matts Karlson Director +46 8 405 13 98 +46 70 686 77 90

Press release 16 October 2006 Ministry of Finance Autumn Budget Bill: Putting Sweden to work - a good deal for all Today the Government presents its budget proposal for 2007, which also indicates the emphasis of economic policy for this electoral period. Increasing employment by getting more people into work and combating exclusion is the single greatest challenge for economic policy. The Government's policy aims to create favourable conditions for sound, long-term economic development, create scope for increased welfare, and give individuals and families greater power over their own daily lives.

It will be more worthwhile to work and easier to employ From 1 January 2007 a special job deduction will be introduced which will be a clear incentive for low and middle income earners to choose work as their means of support rather than benefits. There will be an extra large deduction for older people as special encouragement to them to stay in the labour market. The aim is to implement further income tax reductions in 2008.

From 1 January 2007 "new start jobs" will be introduced. The reform means that employers' contributions will be completely waived for people who have been receiving unemployment benefit, sickness benefit, disability pension or social allowance for more than a year.

In order particularly to facilitate young people's entry into the labour market, from 1 July 2007 a special allowance will be granted in calculating employers' contributions for those over the age of 19 but under the age of 25 at the beginning of the year.

In order to make better use of older people's potential in the labour market, prevent exclusion and facilitate employment, the special employer's contribution of about 16 per cent for those covered by the new old-age pension system - those born in 1938 and onwards - will be discontinued.

Household-related services will be made cheaper already in 2007. The Government will make further proposals for tax reductions on private individuals' purchases of domestic services, which are expected to enter into force on 1 July 2007.

It is also important to the Government to stimulate employment in various service sectors, for example by reducing employers' contributions in these sectors. Such a system must, however, be assessed in relation to Community regulations on state aid. Reduced employers' contributions are therefore not expected to be possible until 1 July 2008 at the earliest.

It will be simpler and more profitable to run a business The rules on taxation of close companies (the "3:12 rules") will be reformed. Pending a broader review, important improvements will be made already in 2007. The margin for income taxed as capital on the basis of payroll expenses will be extended and the standard amount in the simplification rule will be increased.

The co-financing required of employers after the second week of sickness - 15 per cent of the cost of employees' sickness benefit - will be cancelled.

Wealth tax will be phased out during this electoral period. As a first step the tax rate will be halved from 1.5 to 0.75 per cent on business capital, i.e. financial assets, from 2007.

Administrative costs for companies arising out of all state rules and regulations are to be reduced by 25 per cent over a period of four years.

There will be special initiatives to support business advice for women entrepreneurs and research on women's entrepreneurship.

The tax on air travel decided by the previous Government will not be introduced.

Value added tax on ski lift transport will be reduced to 6 per cent from 1 January 2007.

Labour market policy will be made more effective The Government intends to improve matching of jobseekers with vacancies.

The Swedish Labour Market Administration will be radically reformed; the National Labour Market Board and the county labour boards will cease to be separate agencies as of 2008. This will give an opening for more effective, flexible and less costly administration.

The public employment services will be supplemented by alternative employment agencies. Ineffective and in some cases counterproductive labour market measures will be abolished. This applies to sabbatical years, bonus jobs, educational leave replacement positions, jobs for recent graduates, computer activity centres, international work placement grants, employment training in the regular education system and general and enhanced recruitment incentives.

In 2007 the Government intends to replace the activity guarantee with a job and development guarantee that covers all who have been unemployed for 300 days or 450 days in the case of parents with children under 18. A special job guarantee will be implemented for young people under the age of 25.

The work-first principle will be made clear in unemployment insurance. Incentives to work will be augmented. Unemployment benefits will be based on the last 12 months' income instead of the last 6 months' income.

Benefit will be payable for a maximum of 300 days. Unemployed people with children may, however, receive benefit for 450 days. The highest daily allowance will be SEK 680. Benefit will be 80 per cent of lost income for the first 200 days and 70 per cent thereafter.

The work condition will be tightened up, the study condition removed and time exemptions restricted.

To further enhance incentives to work and to contribute to financing tax reductions for low and middle income earners, self-financing of unemployment insurance expenditure will be increased by SEK 10 billion. In autumn 2006 an inquiry will be set up to investigate and propose structures for compulsory unemployment insurance.

Changes in the sick leave process and measures to combat overuse The ceiling for qualifying income in the sickness benefit system will be restored from ten to seven-and-a-half times the price base amount from 1 January 2007. In addition, the income on which sickness cash benefit is based will be calculated on a new basis.

Measures will be taken to promote more active rehabilitation to facilitate a return to work.

The panels of lay assessors will be abolished and the supervisory system for the administration of social insurance will be reviewed.

The role played by the health and medical services in the sick leave process for people absent from work with unclear symptoms will be reviewed.

Work on examining cases of long-term sickness and making use of any capacity for work will be made more effective and speeded up.

More stringent rules and increased supervision in the social insurance system are proposed, along with increased supervision and improved application of rules and regulations in the unemployment insurance system.

Criminal investigations relating to benefit cheating will be made more effective. In addition claims for repayment will be pursued more effectively and interest will be payable on repayment claims.

The delegation that is working to combat benefit irregularities will intensify its efforts in 2007.

Clear reforms for education and lifelong learning Sweden's future prosperity will be based on knowledge and education. Teachers will be given increased opportunities for academic skills development and resources will be set aside to allow teachers greater scope to conduct research as part of their professional activities.

Reforms will be introduced to make it easier for teachers who lack full teaching qualifications to obtain validation of their skills and supplementary education.

National goals for Swedish will be introduced in year three of compulsory school.

Grading criteria will be revised with a view to giving grades at an earlier stage and differentiating more between grades.

Reviews will be introduced in years three, five and eight, including compulsory national examinations and more stringent requirements to provide individual support for school students.

Every school will be subject to quality control every three years.

During this electoral period, the Government intends to propose three orientations in upper secondary school: an academic orientation, a vocational orientation and an apprenticeship programme.

A forceful drive will be made to strengthen Swedish research by providing overall an additional SEK 900 million to research. Improved care services and increased security In order to encourage higher quality and greater accessibility, the Government intends during this electoral period to implement changes aimed at increasing diversity of provision and competition between different actors in health care and social services.

A "Freedom of Choice" will be introduced in elderly care. A targeted government grant of SEK 300 million will be provided to local governments to prepare the reform.

There will be a comprehensive review of the organisation of psychiatric health care and this sector will receive an additional SEK 250 million per year.

A further SEK 250 million will be set aside for the national health care guarantee in 2007.

The Government intends to carry though a major reform of dental care in 2008, both strengthening the high cost protection system and creating reasonable conditions for preventive dental care.

During this electoral period, the Government intends to implement vigorous reforms in law and order. Altogether, approximately SEK 1.5 billion more will be spent on law and order in 2007, compared with 2006.

It is proposed that the police receive extra resources of SEK 250 million in 2007, over and above previously announced commitments. In total, the police will receive approximately SEK 1 billion more in 2007.

Family policy will be strengthened A childcare voucher system will be introduced so that parents themselves can choose childcare from among a range of providers.

A gender equality bonus will be introduced to increase economic opportunities for families to divide parental leave more equally.

A framework will be established to enable municipalities to introduce a municipal child-raising allowance.

Public open pre-school will be broadened to include three-year-olds. They will be offered a few hours of free pre-school per week with a special educational content.

National real estate tax will be abolished The present national real estate tax will be abolished and replaced by a low local government property-related charge. The aim is for this to happen in 2008. The first step will be to freeze the taxable values of single-family houses and to limit the significance of the value of land for the real estate tax charged to SEK 2/m2, with a maximum ceiling of SEK 5000. The real estate tax rate for multi-dwelling buildings will be lowered from 0.5 to 0.4 per cent from 2007 and from the same year taxation of standard imputed income for tenant-owner associations will be discontinued.

Stopping the green tax shift and the nuclear power phase-out The green tax shift will be discontinued. Priority will be given to developing effective policy instruments.

The premature phasing out of nuclear power will be discontinued. The Government will not grant renewed operating licences to the two reactors that have been closed.

Cutting the number of government agencies will bring efficiency gains The efficiency of the public sector must improve. As part of this work, a number of agencies will begin to be phased out in 2007. They will include the Swedish Integration Board, the National Institute for Working Life and the Swedish Animal Welfare Agency. The Swedish Work Environment Authority will be slimmed down substantially.

Strengthening of international action Sweden will increase its international involvement in defence and security areas. Appropriations for international action will therefore increase by SEK 600 million in 2007, by a further SEK 100 million in 2008 and a further SEK 650 million in 2009.

Stable central government finances lay the foundation Stable central government finances lay the foundation for healthy long-term economic growth. The overall target of a surplus for general government net borrowing of 2 per cent of GDP on average over an economic cycle remains in place and the expenditure ceiling will be met. The Government's ambition, moreover, is that the central government expenditure ceiling, expressed as a percentage of GDP, should decline somewhat over the next few years.

The budgeting margins for 2006-2008 will be strengthened compared with the 2006 Spring Fiscal Policy Bill, as a result of the proposed reforms. The Government considers that the state should reduce its corporate holdings and the assessment is that a sales volume of SEK 50 billion per year during the next three years is a reasonable forecast. The receipts will be used to pay off central government debt.

Responsible financing Tax reductions and initiatives for activities must be financed in a responsible manner. Accordingly, the Government proposes certain tax increases and changes in fees and contributions.

The regional basic income tax allowance will be cancelled.

The special reduction of social security contributions on payrolls up to a certain level and the reduction of employers' contributions for one-person companies taking on staff will be cancelled.

The tax deductions for trade union membership fees and contributions to unemployment insurance funds will be cancelled.

Home computers leased from employers will be taxed as a fringe benefit and the non-deductible amount for expenses for travel to and from work and for other expenses will be raised.

The tobacco taxes on cigarettes, snuff, chewing and rolling tobacco will be raised.

As a consequence of the cancellation of employers' co-financing in sickness insurance, the sickness insurance contribution will be raised.

Contact Jörgen Eklund Head of Planning to Anders Borg +46 8 405 26 02 email to Jörgen Eklund, via the Senior registry clerk Hans Lindblad State Secretary +46 8 405 48 39 email to Hans Lindblad, via the Senior registry clerk