Sweden's Finance Minister Helped Cut The Deficit — By Cutting Taxes

Anders Borg Sweden

Photo: AP

Swedish politics isn’t all racist-cake cutting you know.The Spectator’s Fraser Nelson has an interesting interview with Anders Borg, who, despite the fact he is from that liberal utopia of Scandinavia (yep – he even has a ponytail and an ear ring), decided to cut taxes after the financial crisis.

With the Swedish deficit wiped out last year (and Borg’s Conservatives voted back into power) the decision is now looking increase wise.

“Everybody was told “stimulus, stimulus, stimulus”,” he tells Fraser. “It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.” Non-economists, he says, “might have a tendency to fall for those kinds of messages”.

Instead, Borg cut taxes in a bid to lure entrepreneurs, and lowered benefits to make up the difference. Entrepreneurs “are the source of job creation,” says Borg.

Fraser’s interview may seem a little one side — there have been a few bad signs in the Swedish economy recently — he isn’t alone in praising the small-state Swede. The FT ranked him top in every category in last year’s ranking of EU finance ministers.

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