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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (270164)	1/27/2006 3:15:38 PM
From: Taro	Read Replies (1) \| Respond to of 1572262

Sweden isn't really doing this. Just leftist panic propaganda ahead of their losing April elections. Swedes are very realistic indeed, very pragmatic as well. Taro

To: RetiredNow who wrote (270164)	2/10/2006 1:01:48 PM
From: TimF	Read Replies (1) \| Respond to of 1572262

Scaling back socialism Sweden looks to fuel growth via economic, market reforms STOCKHOLM (MarketWatch) -- Niklas Zennström is one of Sweden's growing ranks of entrepreneurial exporters. Zennström and partner Janus Friis launched an Internet telephony company called Skype in 2003 that's already gained a global market. Yet the native Swede decided to base the company's headquarters outside his homeland to escape the burden of what is, in many ways, a socialist economy. "Regrdless of where people are from, we always want to employ the very best. It is always hard to get them to come and work in Sweden because of the high taxation on labor," said Zennström, whose company was bought by eBay Inc. (EBAY : ebay inc com in Sept. 2005. He also co-founded file-sharing service KaZaa. His lament is often heard among start-up business owners who set up shop in neighboring countries. Their move abroad has become a rallying cry for four of Sweden's more conservative political parties, who have formed a coalition that will try to unseat the Social Democrates from their close to 70-year reign. Largely dependent on foreign markets, Sweden has benefited from an economic upswing that began in 2004. Research and development investment is among the highest in the world at 3.7% of gross domestic product in December 2005. And few other countries have a higher patent filing per capita. Yet many innovations have been commercialized abroad and not enough entrepreneurs are starting new companies within the Swedish borders. "People do business in Sweden and it goes well; they may try launching the product in Denmark instead of considering a global business plan. On the financing side, VCs require too much downside protection and are not willing enough to take risks," said Zennström. It's not that investors can't find good Swedish companies. Volvo AK, Ericsson LM Tele. and retailer Ikea have helped Sweden become internationallly reknown for advanced research and internationally successful business ideas. A changing political scenario may be good news for investors looking to invest in a few more Swedish names. And it comes amid moves to privatize companies away from government ownership, increase foreign venture capital and develop a more attractive combined pan-European capital market. Non-Socialist alliance Sweden endured a deep financial crisis in the early '90s, with sluggish growth and high unemployment, but this provided an impetus to new approaches in fiscal policy. As a result, the central bank became independent and set a low inflation target of 2%. Centralized salary negotiations were abolished and the labor market developed into one of Europe's most flexible. Large companies have long been the major driving force behind the Swedish economy, but attention is now focused on the lack of small and emerging companies. Growth of new European Union members is creating more competition and increased mobility across borders; the Swedish Trade Council expects one in four Swedish companies to transfer production abroad in the coming years. Household appliance giant Electrolux AB and security services group Securitas are further examples of large companies dominating the Swedish market. Existing large corporations now make up to 80% of Sweden's economy; none were started after 1970. "We have quite a good policy for big companies but we have the same rules for small companies. If you only have one or two employees it's very hard to follow all the regulations," said Maud Olofsson, leader for the Center Party. Together with the three other non-socialist parties, the Center Party has formed an alliance that's working to gain political power in 2006. The Social Democrates have been in power 65 out of the past 74 years, with a brief four-year interruption in the early '90s. One of the biggest challenges for the conservative parties over time has been to step forth as a credible alternative to the government, and win voters who have been reluctant to embrace change. Coalition attempts have been frustrated by quarrels over fiscal policy and taxation. However, for the first time in many years an equally strong, or even stronger, opposition is challenging the Social Democrates with concrete proposals for structural reform of the economy. "The Swedish state is the biggest owner on the Stockholm Stock Exchange, which means that the state owns companies with a combined turnover of $43.86 billion. We have to privatize many of them," said Mats Odell, vice-president for the Christian Democrates. The lag between production and unemployment is now longer than usual and household spending is relatively weak thanks to the stagnation on the labor market. The unemployment rate is around 5.5 %. Trade Union Economist Irene Wennemo says the conservative coalition is not the only factor threatening the current government. "The Social Democratic model is dependent on the people thinking it's OK to pay high taxes as long as they get a well-functioning social security system in return. But it's also very important that enough people are employed to finance the system. That's where we will have a problem in the future," said Wennemo. Larger questions lie in the challenge of Sweden's ability to stay attractive and keep growing in an ever-more competitive environment, and retain young businesses and commercialize innovations. Because of high costs involved in starting up an incorporated firm, currently only one out of five entrepreneurs is under 30 years old. "A lot more soft financing as seed capital is needed for the early stages. We also think companies should be able to postpone taxation on capital gains if they are investing in new projects. We call it the 'forest account,'" said Tom Berggren, the general secretary for the Swedish Private Equity and Venture Capital Association. The non-socialist alliance's main goal is to lower taxation on labor and wealth, but it seeks to abolish unnecessary rules and regulations for those who start up their own company. Easing the path for Swedish entrepreneurs is a key issue on both sides of the political spectrum. Since the peak years between 1997 and 2000, the number of entrepreneurs has gone down dramatically with 20,000 fewer people starting up their own company in 2005... marketwatch.com