HISTORY
Sweden’s contact with the rest of Europe is first recorded in the Viking period, when the country traded furs and arms with Russia, along the eastern passage. During the 13th century, a form of feudalism was introduced, a hereditary nobility was established and a thriving middle class of burghers emerged in the towns. Political history in this period is complex but some sense of order, however transitory, was engendered by the accession of Margaret – then Regent of Denmark and ruler of Norway – to the throne in 1387. She made an attempt to establish a united Scandinavia (the Union of Kalmar) but this did not last long after her death and, during the 15th century, the nobility were able to do much as they pleased at the expense of royal authority.
The most significant event of this period was the Massacre of Stockholm in 1520, occasioned by Christian of Denmark’s ill-judged attempt to reassert his authority in Sweden; this led to a national revolt, headed by Gustav Ericksson Vasa. The Danes were defeated and Gustav was crowned Gustav I in 1523, establishing the House of Vasa and heralding the beginning of Sweden’s ascendancy in Europe. Protestantism became firmly established by the Convention of Uppsala in 1593. In 1611, Gustav II Adolf (better known as Gustavus Adolphus), one of the most famous names in Swedish history, became king. Much of the foreign policy of the 17th century was dominated by the desire to transform the Baltic into a Swedish lake – this was the main motivation behind Gustav II’s entry into the Thirty Years’ War in 1629.
Despite his perceived role as a champion of Protestantism, Gustav II soon came to an alliance with Catholic France, in order to oppose their common enemy, the Emperor Ferdinand II. Sweden won the last remaining Baltic territories not under their control – Prussia and Pomerania – but Gustav was killed at the battle of Lützen in 1632. Although the Peace of Westphalia (1648) confirmed Sweden as a major power, this dominance proved to be short lived. Gustav was succeeded by his infant daughter, Christina. She abdicated in 1654 and the reigns of her three successors (1654-1718) were dominated by military campaigns, characterized by a slow retreat (in the face of Russia and Austria) and punctuated by spectacular but indecisive victories, such as Narva (1701).
An alliance against the growth of Swedish power eventually defeated Karl (in the Great Northern War) and by the mid-18th century, Sweden had lost most of its possessions outside Scandinavia. Another casualty of the defeat was absolutism, established by Karl XI but abolished on the accession of his sister, Eleanora. Factions at court involved the country in further European conflicts, including another war with Russia; in 1772, Gustav III felt strong enough to re-impose absolutist rule. Despite an aggressive and successful foreign policy, his regime did not long survive his own assassination in 1792.
After the Peace of Kiel in 1814, Sweden was confirmed in possession of Norway but was forced to cede several German regions to Denmark and Finland to Russia, marking the termination of Swedish interests on mainland Europe.
Absolutism was not finally broken until the mid-19th century, as a result of Liberal opposition to Karl XV. The latter years of the century were dominated by economic expansion and the emergence of Norwegian nationalism, culminating in Norway’s declaration of full independence in 1905. By this time, a parliamentary form of government had emerged in Sweden, with a strong Socialist opposition. The Socialdemokratiska Arbetarepartiet (SAP, Social Democrats) first gained power in the early-1920s and then, apart from a short break in 1936, held power continuously from 1932 until 1976. Since the end of World War II, in which Sweden remained neutral (as it had done in World War I), the country has enjoyed growing economic prosperity with continued investment in, and expansion of, the welfare state.
Abroad, it has forged close links with other Scandinavian countries, which have developed an important role on the international stage as well-respected ‘neutrals’. Nobody exemplified this more than Olaf Palme, prime minister and leader of the SAP from 1970 until his assassination in 1986.
By the beginning of the 1990s, the economy was no longer performing as well as it had done and the center-right coalition government of Carl Bildt, which took office in 1991, instituted an austerity program. This was designed to reduce inflation, cut the budget deficit by reducing public expenditure and de-regulate and privatise much of Sweden’s extensive public sector. Relations with the (then) European Community had become the major issue in Swedish politics, although with all the major political parties favoring membership, the issue was less than contentious. Negotiations for full membership began in 1993. These were completed by the September 1994 election, which was won by the SAP; Sweden joined the EU at the beginning of 1995.
Sweden chose not to join the European single currency at its inception in 1999, public support was lacking and the government felt that economic conditions were not right. By 2003, the government was prepared to sign on, but a popular referendum that September rejected the Euro. The minority Social Democrat government that had taken office in September 1998, under premier Goran Persson, was partly hamstrung by the reservations of the ex-communist Left Party and the Greens, upon whose support the SAP relied to hold on to office. Despite the government’s difficulties, opinion poll predictions and the general political shift to the right throughout Europe, the SAP held on to power at the most recent poll in September 2002. It still needs the support of the Greens and the Left Party.
Government
Sweden is a constitutional monarchy with legislative power vested in the single-chamber 349-member Riksdag (Parliament), which is directly elected for a three-year term. A prime minister and cabinet are drawn from the largest party or coalition of parties.
Economy
Sweden boasts one of Europe’s most advanced industrial economies and one of the highest standards of social welfare in the world. It also boasts a relatively large number of world-class multinational companies (Ericsson, Volvo). A prolonged period of peace, which included a policy of neutrality during both World Wars, has contributed much to its economic development. Over half of the country is covered by forest, supplying raw material for the wood-based industries – paper, wood pulp and finished products such as furniture – which account for 20 per cent of Swedish material exports. Most of the country’s agriculture is concentrated in the south and central regions and produces dairy products, meat, cereals and vegetables. The agricultural and fisheries sector is, however, fairly insignificant today, accounting for just 2 per cent of GDP. Sweden has a strong industrial sector which produces a number of major exports including vehicles, office and telecommunications equipment, iron and steel, wood products and chemicals. The country is rich in mineral resources, which include 15 per cent of the world’s known uranium deposits and large deposits of iron ore, copper, lead and zinc. Lacking fossil fuel deposits, Sweden has large nuclear power and hydroelectric programs, which meet over 80 per cent of its energy needs.
Sweden was a long-standing member of the European Free Trade Association (EFTA), which linked most Western European economies outside the European Union, before it finally joined the EU in 1995. But there is a strong Euro-sceptic current: so far the Swedes have refused to join the Euro-zone, most recently at a national referendum in September 2003 (despite the endorsement of the national government).
Domestic economic policy has been mainly concerned with making the labor market more flexible and with addressing Sweden’s large government debt. The economy was in recession between 1999 and 2002, but is now slowly recovering. Current annual GDP growth is 1.6 per cent, and this is expected to increase during the next two years. Both inflation and unemployment (2.2 and 4 per cent respectively) are close to the EU average. Sweden’s major bilateral trading partners are Germany, the UK, Norway, Denmark and the USA.
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