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March 15, 2013 5:40 pm
Fredrik Reinfeldt, prime minister of Sweden, strides into a bright sitting room overlooking the parliament rooftops, settles on to an orange-striped sofa and places a neat pile of papers on the table in front of him by a bottle of water. Briefing papers? The budget? A daily to-do list?
Reinfeldt happens to be a fan of lists. And unlike many of his fellow European leaders now mulling over austerity options, he no longer needs to add “cut the budget deficit” to the top of his policy to-do list. “It’s true that our public finances are in balance,” says Reinfeldt, 47. “In 2006 we had the same debt ratio as many countries in Europe. Now some of these have doubled their debt; we have lowered ours to less than 40 per cent.”
We have met in the complex where the prime minister works and lives: Rosenbad and Sager House, two buildings wedged onto a quaint waterside strip in Stockholm. Sager House is an ornate townhouse with roots in the 17th century that was refurbished for the prime minister’s use in 1996. The adjoining pink-painted Rosenbad, an art nouveau structure with a marble entrance, was built as a bank in 1902, on the site of an old bathhouse.
As a result of its own banking crisis in the early 1990s, Sweden was forced to impose painful cuts and sharply devalue its currency while most of the rest of Europe enjoyed good times. Now, after almost seven years in office, Reinfeldt and his centre-right coalition are continuing the long transformation of what was once the world’s most famous, high-tax welfare state – into a country known for its strong economy and competitiveness.
“I remember coming into politics in the late 1980s,” says Reinfeldt. “We were described as the world’s record-holder in high taxes, and that’s not true any more. We had a tax burden of about 51 per cent of GDP and now it’s 44 per cent.” Taxes, he says, have been cut or abolished. “The inheritance tax and wealth tax in Sweden were taken away earlier [by the previous Social Democrats]. We lowered the corporate tax rate to 22 per cent, and delivered sound public finances.”
So how has Sweden managed to stay business-friendly and still keep the cradle-to-grave safety net that is so prized by citizens – the so-called “Swedish model”? Reinfeldt is not a fan of the label. “It gives the impression you can find the model in a book ... Very early [in our history] we took a path of a social contract with companies,” says Reinfeldt. “And Sweden has had 20 years of reforms.”
Reinfeldt grew up in the suburbs of Täby and was drawn to politics at school. “I found from a very early age that I liked talking for my friends,” he says. “I was elected to the student council ... and I liked the core idea of democracy, to represent other people.”
Reinfeldt, credited with softening the hardline image of the Moderate Party and adopting the language of the long-ruling Social Democrats, was a surprise choice for party leader in 2003. “In the 1980s, it was not likely that a member of my party would become prime minister. The Social Democrats were at the centre of things. This has all changed. It’s remarkable.”
A father of three, he met his former wife of 20 years, local politician Filippa Reinfeldt, in Moderate party politics. The couple’s separation last year barely merited a mention in a country where high walls still exist between public and private life. Reinfeldt rarely gives personal interviews and does not use social media to communicate. And unlike other politicians in his own party, he has not opened a Twitter account, deeming it a work distraction.
To relax, though, he enjoys watching sports on monitors set up around Sager House. The prime minister also admits to being a fan of the Eurovision song contest – and in a kitchenette across the hall, cupboards are stocked with souvenir coffee mugs from his favourite musicals.
The walls of this room are decorated with dozens of photographs of Reinfeldt posing with other world leaders: Obama; Sarkozy; and one of Reinfeldt and Angela Merkel packed into life jackets in a small boat outside the official country residence, Harpsund, where the prime minister traditionally rows visiting heads of state around the lake.
So as one of Europe’s longest-running leaders, and with the tables now turned, can Reinfeldt offer any advice to those navigating fresh financial turbulence?
“Make a list,” he suggests, leaning back on the sofa. “Number one: do not cover bank losses. Many countries have done so. If the banks ask for support, we will take them over before giving resources; restructure them. We did this in the 1990s, and in 2008.” Taxpayers, he says, made a profit. “Number two, don’t subsidise companies in trouble. Push resources to people employed in the company but not to the company itself. If you are right in your investments, even in the darkest hours of a tough economy, you have jobs created.” The government did not intervene to save two car companies: Volvo was sold to the Chinese and Saab closed down.
Number three is to cut more benefits. “We were supporting pre-retirement schemes. Now we’ve eased the pressure on the public finances with incentives to participate in the labour market.”
Propped on a side table in the sitting room, just beneath an abstract painting by Olle Bonniér, is a large piece of red Kosta Boda glass. More glasswork is displayed on windowsills in a larger sitting room downstairs. Meanwhile, the upstairs corridor has been lined with photographs of cabinet members from the late 19th century up to the present day. Posing in a recent photo is a key member of Reinfeldt’s cabinet: the pony-tailed finance minister, and co-architect of Sweden’s current economic policies, Anders Borg.
Fairness, Reinfeldt says, is vital to keeping the public behind you during rough times. “Is it fair? It is important that we do not cut down on core activities. I will support core ambitions of hospitals, schools. But we have been very tough on the banks.”
Reinfeldt paints a good picture, but he faces plenty of criticism: youth unemployment remains stubbornly high; integration of the country’s immigrants is stalling, shadowed by the troubling rise of an anti-immigrant far-right party; and opponents accuse the government of being too hasty to privatise services and sell off hospitals, old-age homes and schools to associations and even private equity funds.
Is he putting profit before the public good? “We introduced choice,” Reinfeldt replies. “In most countries, you have a division between private and public fees. You can’t say that in Sweden ... Our educational system is open to everyone and free. Universities have no fees.”
Sweden has also traditionally been open to asylum-seekers from the world’s trouble-spots: at one point, the suburb of Södertälje took in twice as many Iraqi refugees as the entire US. In the kitchenette, Reinfeldt shows me another photograph of a recent visit to a local business. “They were making this Halal meat in Stockholm,” he says. “I like to talk to entrepreneurs, immigrants.”
Reinfeldt opens the cupboard, picks out a souvenir mug from the musical Mamma Mia! and pours himself a strong coffee. We return to the lists. In the end, says Reinfeldt, any political leader today must acknowledge the limitations of the job. “I can only partly make things happen. A lot of events are controlled by others: financial markets, European decisions, random events ... 50 per cent of Sweden’s economy is based on trade.” A to-do list, he points out, is only a guidepost. “This is what I want to achieve. The means are limited. We do our best.”
“Basketball was my sport,” says Reinfeldt, displaying a Spalding basketball. “I’m 188cm tall, but that was short for basketball. You should be two metres at least. It’s a fast sport. I like that it’s played with others and you’re part of a team. In the mid-1970s our team recruited the American, Glenn Berry, to build up basketball in Sweden. He was fantastic.” Reinfeldt’s team was in Tensta, a district of Stockholm with a large immigrant population. “I met many immigrant friends through basketball,” he says.
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