Sweden, it has been observed, is a very fine country if you like living off pocket money. That is because the country's government takes more than 50 per cent of gross domestic product in taxation to support one of the world's most generous welfare states. The election of Fredrik Reinfeldt, Sweden's first centre-right prime minister in 12 years, suggests that some Swedes are now ready for a change. The challenge for Mr Reinfeldt and his new coalition is to deliver.

Mr Reinfeldt's Alliance for Sweden, with 48.1 per cent of the vote and a seven-seat majority in parliament, campaigned on a platform of moderate free market reform. It plans to cut income tax on the low-paid and payroll tax on employers who hire long-term unemployed youths. Mr Reinfeldt wants to privatise some state-owned companies. One of his coalition partners has even proposed to cut unemployment benefit.