- The economic downturn is more serious than politicians and media reports. What happens if telecom giant Ericsson collapses?
- We are moving from four relatively calm years to outbreaks of struggle. We will see local protest movements as well as trade union conflicts and strikes of a more generalised character. Amongst a growing layer of young people there is a radicalisation towards the left.
- The new period means polarisation, which in the election was underlined by the threat from racist parties.
This offers new possiblities and challenges for socialists, but also for a broader layer of workers and youth.
Political parties - growing instability
The Social Democratic election victory was not a show of strength or regained stable support. Persson was saved by a number of temporary factors, some of which appeared with good timing for the election campaign:
- The fear of the extreme tax cuts and connected huge cuts promised by the Moderates (right wing capitalist party). Social Democracy was seen as a lesser threat because of:
- The boom 1998-2000. The government did not have to implement new big austerity programmes. People in unemployment or schemes for unemployed fell from 10.2 per cent in 1998 to 6.2 per cent this year. Households received their biggest boost in purchase power for 40 years in 2002, or 5.2 per cent. This was mostly out of a big reduction in child care fees and tax cuts. Those with high incomes gained most.
- The lack of a national alternative. The Left Party (former Communist Party) in the period 1998-2002 failed to stand out as a left alternative and was shown to be just a smaller variant of social democracy.
- The employers’ federation, which represent the major capitalists, wanted a Social Democratic government. When after the elections, the Greens held talks with the Liberals, Centre Party and the Christian Democrats, the value of the currency, the krona, fell.
- The threat from openly racist parties and racist proposals from the Liberals and Moderates increased the Social Democrats’ support from immigrants. According to poll made on election day, 50 per cent of imigrants voted for the Social Democrats, and a further 22 per cent voted for the Left Party.
- The unstable world situation, with the danger of terrorism and war, has skillfully been used by Persson to present himself as a guarantee for stability.
But social democracy has in no way regained its former strength. In its stronghold Norrbotten, traditionally the most left wing region, the former miner Lars Törnman received almost 14 000 votes (9.2 per cent) for a radical populist party in the parliamentary elections. In both Norrbotten and Värmland "health care parties" got strong support in the regional elections. Locally in Umeå and Luleå, Rättvisepartiet Socialisterna (CWI Sweden) went from 2 to 5 councillors.
The Social Democrats got 39.9 per cent in the national election, which should be compared to 45.3 per cent in 1994. In the period 1994-98, when Social Democratic governments led by first Ingvar Carlsson and then Göran Persson declared themselves world champions in austerity measures, the party fell to 36.3 per cent. Less than half of the loss was regained despite the boom in the economy.
The weak basis of the parties was underlined by sharp swings, where the Liberals more than doubled and both the Left Party and the Moderates lost a third of their votes. But while the Moderates are shaken by tough internal debates, and five out of their top leaders have resigned, the Left Party does not seem to be seriousy discussing its losses in the elections. The fact that the party stands by its right wing policy of cuts was clear immediately after the elections.
In Gothenburg the Left Party is responsible for a total slaughter of complementary education for adults. The week after election they stopped education for 4.300 students and 370 teachers. The council unit in charge had already been formed into a company, and did now lose the "contract" to 16 private competitors. Two Left Party council leaders are responsible for this decision. The Left Party runs Gothenburg in coalition with the Social Democrats.
After the loss of almost every third voter, and extra big losses in councils where the party has been in ruling coalitions, the Left Party has moved even closer to the Social Democrats. The party leader Gudrun Schyman is proud of the fact that cooperation with the government has been extended to new areas, and criticises the Greens for not being loyal enough. They have formed an informal government with Social Democracy, without gaining seats in the government.
"We in the Left Party stand behind the proposals of the budget regarding incomes and new tax rules. Not because everything is what we want, but because the budget is good enough", the party spokes person Lars Bäckström declared in Parliament in a speech which received big coverage for its conciliationism towards the right-wing opposition.
The Left Party secretary Pernilla Zethraeus in her evaluation thinks that Social Democracy adopted Left Party policies during the election. She wants no change of course, but speaks of strengthening the party organisation. But the election on the contrary confirmed that the Left Party mainly consists of councillors etc and to a lesser degree of ordinary members.
The Left Party will hardly abandon its cooperation with the Social Democrats voluntarily. But Göran Persson, on the other hand, can quite possibly dump the Left Party for the benefit of the Centre Party (as in 1995), the Liberals (as in the west Swedish regional council) or even the Moderates (as in the currency crisis 1992). A deep crisis or other big events can lead Social Democracy to switch parliamentary allies. On the Stockholm Regional Council the Social Democrats was prepared to form some kind of grand coalition because of huge deficits, before it settled for a new "red-green" alliance.
The negotiations by the Greens with every possible party to form a government, hyped by the media attention, led to nothing. They came crawling back to support Perssons’ government. With the support of the Greens the course in favor of the EU and EMU is cemented, as in Germany, with the difference that they don’t have any Ministers in Sweden. Two of the party’s issues in Sweden is support for privatisation in education and for "labour market reforms", i.e. worsening conditions for workers.
The Centre Party left the talks with the Greens and the Liberals because the parties could not agree on cuts worth 70 billion SEK (€7.8 billion), which were needed to pay for their programme of for example tax cuts for the rich. A weak centre government was not in the interest of the speculators of the "market".
Within the right-wing Moderates the fighting between neo-liberals and conservatives continues up to their extra party congress in November. One trend would like to drop its programme of extreme tax cuts in order to become electable again. The neo-liberals, led by the Party youth leauge, want a break with other parties and a programme of mass privatisation. Within the conservatives, the election campaign exposed a number of racists, and many of them received high votes. In one city, Ystad, the Moderates attempted to take power with support of the racist Sweden Democrats, but were blocked by the central party leadership. Now it looks as if the party leader Bo Lundgren can remain, as the only candidate balancing between both wings.
An issue for debate amongst the traditional capitalist parties is how they are actually going to survive in the next few years. Neo-liberal Mauricio Rojas, elected to parliament for the Liberals, has proposed to scrap to whole concept of "bourgeoisie" because it is a title for the ruling class. Instead of stressing tax cuts and privatisations he wants to achieve the same result through a programme for "civil society", "individual power" and "self administration". In a similar way to the Tories in Britain the traditional capitalist parties would in this way project themselves as "caring", at the same time as they attack the welfare state. In reality these ideas reflect an understanding of the opposition and strength of the working class, and are a way to avoid head-on confrontations.
Economy: empty promises and shaky prognosis
The Social Democratic leadership would without any doubt repeat enormous cuts as it did 1994-98 if the economy enters a new deep crisis. This years’ state budget repeatedly declares its loyality towards the self-imposed targets of a 2 % budget surplus in order to pay off the state debt and to keep under the expenditure ceiling.
The expenditure ceiling of the new budget for 2003, presented two weeks after the election, is set to 818 billion SEK and for 2004 its 852 billion SEK. As a share of the total economy (GDP) this ceiling fell from 39% in 1997 to 34% in 2004. GDP is over 2100 billion SEK, so 5% equals 105 billion SEK. Parliament has therefore voluntarily lowered its expenditure by 105 billion! Also the Left Party and the Greens support this system, which in the budget has declared to have "in general to have worked out well".
In the same way, the councils’ share of GDP drops with 10 billion SEK in two years. The 9 billion SEK promised as new money to health care over four years should be compared the 30 billion needed - every year! - according to the Doctors’ Association. This year’s money will not even be enough to cover the deficits of the regional councils, which are in charge of health care. The cuts in councils and regional councils, which have continued even in the elections year, will therefore continue.
A clear example is education. The government promised 6 000 new jobs but in the budget there is only a vague promise to give money later, "if the economy allows". The teachers union has already protested.
In the election campaign, analysts said that cuts were needed to keep below the expenditure ceiling. In the new budget, this is mainly done through plans for massive cuts in the number of people on sick leave. This costs for sick pay (a state insurance) and early retirement have increased enormously the last years, now reaching 100 billion SEK a year. The big increase is among public sector women workers, who are on long term sick leave for six months or longer. This in turn is a result of increased pressure at work because of the cuts. Economists, managers and capitalist politicians blame the sick, saying that they are parasites on the system. In words, Social Democracy and the Left Party disagree, but in the budget they aim to cut the costs by 10 billion SEK next year and successively increase these cuts to 25 billion in 2008. The aim of the government is to change "attitudes", putting pressure on both workers and employers, i e on workers from two directions. "The individual also has a strong responsibility to return to work and for his/her own income", the two parties wrote in the budget. They are introducing part-time sick leave, putting a time limit on early retirement (three years) etc. These repressive measures are combined with talk about the public sector as "model work places" - written by people who have no idea about the pressure on the work places and don’t allocate any new money to ease the pressure. The Left Party praised itself for blocking a proposal to make it compulsary to have documents from two doctors in order for workers to be granted sick leave. But it will still be demanded "in certain cases".
The budget has an entirely capitalist perspective. It is "worried" over wage increases. "Company managers must take the same responsibility as the trade unions over their wages." In line with this, Göran Persson will now have to prove what his talk of the public sector as new "model employers" is worth since the council workers union Kommunal (equivalent of Unison) has decided to break up the old wage deal for the last third year and go for new negotiations.
A pet word in the budget is "growth". When politicians and managers speak about "growth policy", the content is tax cuts for companies, worsening working conditions, opening the public sector for competition etc. The budget advocates co-operation and conciliation beyond class and party "borders", and praises the "Lisbon-strategy" of the European Union. The latter intends to create the worlds’ best conditions for business, to attact investments and increase exports. On a smaller scale, the Swedish government aims to "increase profits for those who start or expand companies". Companies and agriculture are both exceptions from a new so-called "green" tax on carbonite fuels. On this question, the budget includes privatisation of state companies for 15 billion SEK.
Yet, the budget can quickly fall into deficit which will force new big austerity packages. The boom years gave increased tax incomes (75 billion SEK in 2001 alone) and 250 billion SEK in incomes from pension funds. These will not be repeated in the coming years.
The economic crisis within industry, particularly severe for Ericsson and now the Swedish-Swiss ABB, will have turbulent consequenses. When the property and bank crisis hit Sweden in the late 80s and beginning of the 90s, the state was forced to buy them out and take over the debts. The rapid increase of the state debt in turn became the major argument for huge public sector cuts.
When Ericsson shares - once 37% of the Stockholm exchange - now have lost an incredible 97% the consequenses are more than statistical. A leading economist, Hans Söderström, thinks that the share price collapse is more reliable to predict the coming economic conjuncture, than his own optimistic colleagues.
Ericsson is slashing the number of employed world wide from 110 000 to 60 000. And it can go much further. Its competitor Lucent started with about this levelof employees and is now heading for 32 000. Flextronics and other rapidly growing subcontractors are also closing factories. Last week, hundreds of workers in Visby demonstrated against Flextronics.
Ericsson will cut its research and development, once 45 billion SEk a year, by half. According to Aftonbladet (a Swedish newspaper), this equals half of the costs of universities in Sweden. In panic, the government is planning to take over some of that research, in the same way as the state in Finland has done.
Telecom "experts" believe that only 4-5 telecom giants world-wide will survive, so the whole future of Ericsson could be in danger. "Save Ericsson", demands metal workers union leader Göran Johnsson, who wants the state to ease the conditions for third generation mobile phones so that it can start earlier. Even so, the Swedish market alone will not be able to save Ericsson.
The government budget is based on the unrealistic prognosis of a growth of between 1.5 and 2.2% this year and next. This is building on expectations of growing exports at the same time as the world economy is going in the opposite direction. A global purchase index for Swedish export markets in September fell to 49.7 (below 50 marks a down turn). The two most important export markets, the US and Germany, were on 49.5 and 46.0 respectively.
The prognosis for the US is now revised down on a regular basis, while the EU countries are pressurised by the "stability pact" which forces cuts and blocks stimulating the economy.
Household consumption forms an important part of economic growth. But this will not continue either. This years’ wage increases will be followed by raised taxes (particularly by new Social Democratic administrations in Stockholm regional council and local council). The fall in share prices makes insurances etc more expensive and will increase saving because of worries over pensions. The old state pension funds and the new "individual" pension funds have lost in the region of 30 billion SEK each.
Looking just at budget figures (debt, deficits etc), the situation looks much better than before the last downturn. But the economy is at the same time much more dereulgated now, more connected to the EU and EMU and more dependent on foreign owners and markets.
The racist threat
The major racist party, sverigedemokraterna (Sweden Democrats), increased their number of councillors from 8 to 49 and got 76 300 votes (1.4%) for the riksdag (Parliament). Another, more openly nazi-linked group gained four councillors.
This is a warning, even though the total vote for the far right did not increase much. Their votes mainly came from previous local racist parties, the Pensioners Party which in some councils was racist, and remnants from "New Democracy" a looser right wing racist populist party which came into Parliament in 1991 and now has disappeared.
The racist parties base themselves on the discontent against cuts, on propaganda that immigrants cort too much and are criminals, and on the state repressions against refugees. This year, they did get real help from the Liberals and the Moderates. The Liberal party leader invited the racist Sweden Democrats for a national TV debate, which resulted in a lot a publicity (free advertising) for the racists. Then the Liberal went on to attack immigrants for not being good enough in the Swedish language and therefore needed a test to get Swedish citizenship. The Moderates wanted to transform grants for refugees into loans. Both parties are in favour of labour immigration, but are against state support for these workers, who would be deported after losing their jobs.
Now, after the election, the establishment parties are repeating mistakes made by their French equivalents against Le Pen. In several councils, they are coming together "to block the Sweden Democrats", but by doing that simply confirming that they are all the same. The establishment politicians can’t stop the racists, because a) they create the conditions from which racism is cultivated, b) they themselves have a racist policy towards refugees and some of them more than this and c) They are not trusted by acitivists and they are not involved in any real campaigns against racism
The election result has so far not led to an increase in the acitivities of the racist parties. Even in the election campaign, they were relying on their passive, secret, supporters, and did not organise so many public acitivities. The issue of racism will nevertheless be one of the priorities of Rättvisepartiet Socialisterna and for workers and youth in the coming period.
Radicalisation and struggle
The global anticapitalist movement, in the beginning mainly based among youth, has recieved a mighty impetus from workers’ struggle and anti-war movements the last year. Southern Europe, Italy, Spain, Greece, Portugal and France has seen general strikes and workers’ struggle on a new level. Unions and workers have also played an important role in the mass protests against US imperialism and racism.
This is having an effetc in Sweden as well, with clear left trends among youth, for example at music festivals and in many schools. A military attack from the US against Iraq will lead to the biggest demonstrations in Sweden for a long time.
Even trade unions which have not been fighting for a long time can be forced to struggle, which has been shown in Britain. In July, Unison organised a one-day strike over wages. In Sweden, the pressure has forced Kommunal to decide to rip up the old wage deal, although other Social Democratic union leaders are being mobilised to try to stop them. "My members will ask why we’re not doing the same thing", said one national union chairman.
The leadership in Kommunal fears the expectations from its members. The leadership is very right wing - not against privatisation - but that does not exclude a decision in line with the opinion of the members. Locally, newer more radical leaders have been elected to positions in Kommunal as well as in the communication union, Seko.
This is reflecting increased pressure on the work places, where even some of the sick leaves are a kind of desperate protests. But now we can expect increased struggle, not just on wages. Already we have seen signs of struggle in local transport against working conditions. With more factory closures, routinist demonstrations will be replaced by real struggle. In the beginning of the 90s, the unemployed played an important role in workers’ struggles.
Local protest movements - like in Lycksele, a small town in the north, where the Social Democrats and the Left Party are conducting a vitual slaughter of council service - will take place elsewhere and underline the need for a new mass workers party with a socialist programme. Rättvisepartiet Socialisterna can play an important and growing role in the increased struggle. The suppport we were able to to get in the elections in Luleå and Umeå shows the potential for a socialist party on a national level.
This article was printed in Offensiv, socialist weekly of Rättvisepartiet Socialisterna in Sweden, on 17th October 2002.