----- Original Message ----- From: "Soren" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Sunday, June 25, 2000 11:48 PM Subject: (50 Years) IMF on Sweden: more inequality needed! > The following news story and brief analysis were posted on another listserv. > They concern the IMF's recent Article IV consultation with Sweden, that is, > the annual review of the economy performed by the IMF. THe IMF does this > with all member countries; it's just that since it has no power in the > North, its recommendations are usually just noted and ignored (it's been > telling the U.S. to raise interest rates for several years). As Michael > Pollak points out, the case of Sweden, one of the most economically > comfortable countries on Earth, presents a good occasion for seeing just > what the IMF's real agenda is, always and everywhere. No amount of nice > rhetoric will ever be able to obscure its hardcore philosophy .... > > From: Michael Pollak <[EMAIL PROTECTED]> > Subject: IMF: Inequality is good > > [It's probably a blinding stroke of naivete on my part, but I was > flabbergasted at how bald this IMF report is. Everything is going > swimmingly in Sweden right now, and they think it's a golden opportunity > to shrink the welfare state because . . .well because improving people's > welfare is bad on principle. It "reduces the incentives to work and > save." Meaning, I think, that if you're not terrified of being sick and > old and poor or losing your job, you don't need to make or save as much > money. But what really floored me was that they said a "fundamental > rigidity" is the "limited amount of wage differentiation." Up until now > I thought decreasing inequality was an absurdly low priority for the > IMF. But this seems to say they are actually *trying* to increase it! > Normally there's some kind of obvious fault in the economy they can > point to and assert that these things would fix. But in this article it > seems clear that even if everything were perfect they would still praise > austerity and recommend cutting social services & weakening the safety > net. That's just > what they're for, come hell or high water, and they just pretend it's > got something to do with the crisis du jour.] > > [Okay. I *said* I was being naive.] > > Financial Times ; 22-Jun-2000 > > WORLD NEWS: EUROPE: Swedish tax cut urged to fuel expansion: IMF > > By CHRISTOPHER BROWN-HUMES and NICHOLAS GEORGE > > Sweden was told yesterday it must not waste a "golden opportunity" to > lower its taxes sharply and sustain its economic expansion. > > The International Monetary Fund also highlighted a number of problems > that it said were preventing the dynamism of the country's telecoms > industry spreading to other parts of the economy. > > In a report on the country's economy, the fund said Sweden had no need > to cut its debt any faster than already planned, adding that all further > surpluses should be channelled into tax cuts. > > The report said: "There is a real risk that if not fully used for tax > cuts, the initial gains for expenditure restraint would soon lead to > policy slippages on current expenditure and possibly to political > pressures for new expenditure programmes. Sweden would then have wasted > a golden opportunity." > > The report was a reminder of the structural problems facing the country, > despite the economic upswing and progress in cutting debt. Sweden could > afford to cut taxes by the equivalent of 4 per cent of gross domestic > product between 2001 and 2003, the IMF believes. > > "Notwithstanding the sharp reduction in the ratio of government > expenditure to GDP in recent years, the role of government remains large > in comparison with other industrial countries. > > "This is financed by numerous taxes which piled on top of each other > considerably weaken and distort the incentives to work, save and invest. > > > "Other prominent rigidities include the limited amount of wage > differentiation and weak job search incentives." > > But the IMF praised Sweden's austerity measures in the 1990s. > > "The elimination of the long-term interest rate differential vis-a`-vis > Germany from a peak exceeding 500 basis points in 1994 is a clear sign > that Swedish macroeconomic policy is now fully credible." > > The fund predicts the Swedish economy will grow by nearly 4.5 per cent > this year and 3.5 per cent in 2001, with unemployment falling below 4 > per cent next year. > > The IMF also praised the Swedish central bank for not raising interest > rates too aggressively too early to choke off the boom. But it warned > that a less accommodating stance would be needed soon. > > Central bank to drop cheap loans for directors > > The Swedish central bank was yesterday forced to abandon its policy of > giving its directors cheap loans after revelations of the practice > prompted sharp criticism from politicians and newspapers, writes > Nicholas George in Stockholm. > > The bank's directors, who set the country's key interest rates, have > been able to borrow at the discount rate plus one percentage point, a > rate considerably cheaper than offered by commercial banks. The discount > rate is 2.25 per cent compared with a housing loan rate of just over 7 > per cent available to most Swedes. > > Yesterday the daily newspaper Dagens Nyheter reported that four of the > six directors had taken loans. Within hours of publication the bank said > it was to end the scheme. > > Copyright � The Financial Times Limited > > ------------------------------ > > > > ============================================ > PLEASE NOTE: CHANGE OF E-MAIL ADDRESS > I am switching over to: <[EMAIL PROTECTED]> (formerly @igc.org) > Please use this address in the future. > - Soren Ambrose > - 50 Years Is Enough Network / Alliance for Global Justice > > > =========================================================== > 50 Years Is Enough Network http://www.50years.org > To unsubscribe, email [EMAIL PROTECTED] with > unsubscribe > in the body of the message. Questions? email [EMAIL PROTECTED] <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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