The French and German economies

Based on 'Voters of the centre-right, unite' from The Economist, 23rd September 2006

Sweden now has a new prime minister, Fredrik Reinfeldt, letting go of the Social Democrats Goran Persson who had been the PM for the past 12 years. One of the reasons for Reinfeldt gaining premiership of Sweden is because of his promises on economic issues.

Despite the Swedish GDP which grew at an annual rate of 5.6% in the second quarter, the country's economic performance is not as good as it seems to be.

Productivity has been lagging behind mainly because much of Sweden's economy is run by the public sector.

Secondly, Sweden has not been able to create many jobs, especially in the the private sector. Unemployment among the young is at a shocking one in four. Also, immigrants are finding it extremely hard to find jobs in Sweden's tight labour market. In order for more jobs to be created, labour markets need to be deregulated.

The Moderate Party, led by Reinfeldt promises to cut taxes for the low paid and gut the welfare state.