October 29th, 2009
We meet at a critical time.
Together we will in the coming days to shape a policy to address the serious challenges our country faces.
Sweden needs a strong economic policy. It requires a policy that turns crisis into opportunity, social exclusion into a job and deficits into surpluses. It requires a policy that puts an end to taxes financed by borrowed money, and instead invests in jobs and prosperity. It requires a policy that shares the burden equitably.
The challenges are great. The crisis is deep. The demands on us Social Democrats - and our red-green cooperation – are far reaching.
1) The risk of high unemployment becoming entrenched at very high levels. 1 of 3 of the unemployed is unlikely to return to work.
2) The quality of welfare and its long-term financing must be secured. The demographic change with an aging population makes it critical. Work is the prerequisite for prosperity. Every hour worked contributes to paying for welfare.
3), Sweden's future lies in competing with the knowledge and skills, not with low wages. It is knowledge, creativity and innovation that make Sweden's future.
We can feel confident in that we have the experience. We have taken Sweden out of crisis before. Our response to today's and tomorrow's challenges is to strengthen, develop and renew the Swedish model. Where bridges are can be built between the old and the new jobs.
The Swedish model
For me, the core of the Swedish model is the strong solidarity that exists in our society, that means that no matter who you are and where you were born you can shape your life and realize your own dreams. For many, the Swedish model is deeply personal.
I was born in a working-class home. I grew up in a strong society that through clear expectations and wise investments made it possible for me to pursue academic studies and gain post-graduate research training. My road into education is lined with dedicated teachers, district libraries, culture, the expectations adults who believed that all children can achieve if only they are given the chance.
I was given the great privilege of meeting my dreams. I want us to build a society that meets every young person dreams of studying and working.
Before Congress, I have traveled around Sweden. Härnösand I visited last week. Met some refugee children, now teenagers, who come to Sweden alone, without a mother or a father. Ali from Afghanistan, which has just begun a Children and Youth program in secondary school dreaming of becoming a policeman. Sabha from Somalia unsure about her future. She wants to become a truck driver, but do not know if she dares to borrow the money in order to study. Mokhtar, also from Somalia, wants to train as a train in handling conflicts. No one dreams of unemployment and welfare dependency.
Sweden needs these young people, Sweden needs all our young people, they want to study and work, they should be able to study and work. Nothing is more important to me in my political work than giving young people the best possible conditions to shape their own lives and meet their own dreams. Today, youth unemployment in Sweden is among the highest in Europe. It should not be like that. Young people have a right to shape their own lives with jobs and education.
The conservative government's lack of action in the face of the growing unemployment among young people must be stopped. In no other area is it so clear that Sweden needs a new sense of direction. Sweden needs a Social Democratic-led government that puts jobs first, and future of young people first .
Global financial crisis
A year ago, the global economy came close to total collapse. But the effects of the crisis will persist for a long time to come.
The crisis stems from a speculative economy with huge global imbalances.
The financial markets had been integrated across the globe while the regulation and supervision remained on the national level.
Now, politics must regain its power over the market:
• There must be an end to excess bonus payments. Political rhetoric must be replaced by action.
• The demands on the banks must be clearer to all.
• Banks must contribute more to society.
• Only through cooperation across national borders, can we safeguard society.
The financial market needs, also for their own good, must be anchored in democracy. Let us be proactive in drawing up the rules and institutions needed to tame the markets. Next year the deficit in Sweden will grow to over 100 billion and unemployment will be close on a half-million people.
The economic crisis is global. But that does not mean that nothing can be done.
The Moderates have developed a policy on the idea that jobs are created by threatening people with shattered household finances.
It is this idea that underlies the policy of tearing down the bridges to education and adapting to change. It lies behind the reduction in and costs for joining the unemployment insurance fund so that 500 000 employees left the insurance system just before the crisis hit with full force.
Moderates refused to answer the question how the new jobs will be from the fact that those who become unemployed risk becoming poor. They dare not tell the Swedish people that the purpose of their policies is to reduce wages. What sort of future strategy is that in an era of globalization?
We are now seeing the consequences. More and more people are forced to seek social assistance. Today there are 70 000 more people experiencing social exclusion than there were when we had a change of government. The economy is functioning much worse. The Swedish model has been weakened and Sweden is lagging behind.
Back to the top
The crisis is global, but there is no natural law that says that Sweden will develop much worse than the world around us. Sweden was once a leading country in the fight against unemployment. We belonged to the leading countries in Europe. Now Sweden has fallen behind. Unemployment is rising faster in Sweden than in Europe. We social democrats seek the trust of Swedish people to take Sweden back to the top in Europe
To meet the challenge we need to make extensive efforts. Therefore, we must be clear in our priorities. First, the fight against unemployment. The goal of our policy is full employment. The jobs come first.
Security and structural change
The jobs of the future work will come from our being open to global trade and competition. We have built our prosperity by being open to imports and being successful in exports. Sweden has a union movement that, unlike unions in many other countries welcomes the structural change which follows from having an open economy.
It has been possible because Sweden has a social model that encourages change. It is a model that says: If you lose your job, there is a society that gives you strength and support. You are entitled to support and we expect you to do your best.
The Moderates attacked this particular part of the model. The policy aims at depressed wages, lower rates of membership in the union and greater income differentials.
There is a real risk that opposition to openness and protectionism will emerge. Sweden is becoming more timid.
We Social Democrats want instead to shift from jobs that disappear to new jobs to be made easier. We must build bridges.
That is why insurance is important for every individual in need of protection, but also for our country if we are to remain open to competition and structural change. We want to invest broadly in order to get the sick back into work. We want to repair the unemployment insurance fund. The cost of membership will be reduced. The ceilings will be raised.
An effective unemployment insurance fund for broad groups of wage earners is fundamental to the Swedish model. Engineers, auxiliary nurses, industrial workers and registered nurses shall - like all other wage earners - have proper protection when unemployed.
Compete with education not with low wages
The jobs of the future will come from our investing in education and skills.
The Swedish labor market is going through a major restructuring. Hundreds of thousands of jobs are disappearing, many never to return. Sweden will never again have as many manufacturing jobs as we had in 2008.
Investment is needed that allows employees who lose their jobs to move to new jobs within a new industry, often in the growing service sector, perhaps at a new location and with the new higher demands on proficiency. We must invest in education.
Tage Erlander, is my greatest role model. He inspired social democracy to be the party that paved the way for the knowledge society. In the early 1960s Tage Erlander pushed for the target of 50 per cent of young people in high school. Erlander mocked by a bourgeoisie that argued that working class children did not need a secondary education. Erlander was proved right. The bourgeoisie were proved wrong.
A few years ago we social democrats set up a goal of 50 per cent of young people being given the opportunity to study at university. The bourgeoisie was of course firmly against that.
Unless we invest now in a broad educational effort then the consequence can be that the young people of today will be the first group in modern Swedish history with lower education than the generation that went before. Social mobility will be lower and the Swedish model will be weakened.
We have the strength and experience to expand educational opportunities for people. Adult education needs to be strengthened, not least of vocational employment training. Universities are needed in more locations.
Society's responsibility is to provide opportunities; the individual’s responsibility is to do their best. We know what passivity does to people, with a loss of self-confidence, crashed dreams. What is needed is an active line on education that gives people hope and confidence. Sweden needs a knowledge hike to get us out of the crisis.
The jobs of the future will largely come from small businesses and the service sector. To take Sweden to the top again, entrepreneurship must be strengthened.
Our policy is to make it easier for the entrepreneur to start and obtain capital, to hire, expand and to export. The power to innovate in Sweden needs to be strengthened. Research needs more resources.
The jobs of the future will come through investing in a stronger infrastructure and by building a modern Sweden that is climate smart.
We want to invest in infrastructure in railways, roads and broadband. By linking the various regions to each other we will create increased opportunities for jobs and development. We want to bring forward all the necessary renovations in the million homes estates.
The jobs of the future will come through welfare services. A strong welfare based on solidarity is one of the pillars of the Swedish model. Now 60 0000 jobs are threatened. There will be 60 000 fewer nurses, teachers, nursing assistants and other welfare workers in 2011 than there were 2008.
We require now information that is clear and that gives us a long term perspective: will care services and children's school be given priority over tax cuts: that there must be an end to shoveling over costs from the state to the municipalities. We must be honest and talk plain Swedish: welfare costs.
If you want a good welfare system with a school and a hospital of world class then there is no room for big tax cuts. Let us be clear about one thing. If we are to manage financing our welfare system more people must work and the number of hours must be increased. Demographic changes can never be met with only the tax instruments; there is more people working and more years of work if we are to be able to develop welfare.
That is why the fight against unemployment is also a struggle to strengthen the quality of care and of schooling.
If we take Sweden back to top then all need to pull together. It requires justice. Our experience of taking Sweden out of crises tells us that all of us have to contribute. Those who have large incomes and substantial wealth must be given the opportunity to contribute more. Pensioners who have worked a long and industrious life should not be taxed more heavily than wage earners.
Work must pay. That is important. But it must also pay to have worked. Let us also make this clear to the country's pensioners.
Strong public finances are a hallmark of social democracy. Basically it is a question of ideology. For those of us who defend welfare there is nothing more important than strong public finances. Weak public finances are a dream for those who want to weaken welfare. For those of us who care about employment there is nothing more important than that we are also prepared the next time a recession is imminent. A surplus in boom times gives us the power to combat unemployment when times are bad.
A cap on public spending and surplus are our social democratic instruments, our rudder for steering Sweden back to full employment and an economy in balance.
That is why it hurts to see how the government deliberately abuses the intentions behind our strong economic framework. The government inherited a surplus of 70 billion from the social democratic government. But the money burnt a hole in their pockets. Now it has reduced taxes by 100 billion. Next year the deficit is projected to be 100 billion.
To take Sweden back to a top position we need to turn the deficit into a surplus. Jobs and welfare must take priority over the irresponsible tax cuts that dig deep holes in public finances.
Sweden will to return to a top position. Full employment is our goal. We must build bridges to the jobs of the future. We shall invest in a stronger Swedish model where more people get the opportunity to realize their dreams.