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Sweden

Sweden’s centre-right coalition government will not propose a fifth so-called earned income tax credit in this autumn’s budget. A worsened economic situation makes it more important to focus on measures which create jobs in a more direct way and to maintain room for economic manoeuvre. It also means the government won’t have to contemplate a defeat in parliament, where the Sweden Democrats have said they will join the rest of the opposition in not supporting the earned income tax credit. A proposed halving of VAT for the restaurant trade will stay. It will cost an estimated five to six billion Swedish Kronor (€5.5bn - €6.5bn) and the restaurant trade says it could mean 10,000 new jobs. Nearly 58 percent of all hotel and restaurant employees are young people. During the 2008-2009 financial crisis youth unemployment rose from 14 to 20 percent, while the total unemployment figure rose from 6.1 to 8.4 percent. 

Denmark

Three years ago Denmark’s Prime Minister Lars Løkke Rasmussen said the country’s unemployed would not even fill Parken, the country’s largest sports arena. He was minister of finance at the time and exaggerated a bit - the venue can hold 42,000 people and the number of unemployed was 44,000 people. But now the unemployed would fill nine of the country’s largest football stadiums. Unemployment has risen to  163,000 people, and 18,000 more Danes have been marginalised since 2008 - i.e. they have no job and are not in education.

Not surprisingly the economy has dominated in the run-up to Denmark’s 15 September parliamentary elections. Denmark has plummeted from being the seventh most productive country to being the 17th, while maintaining the second highest salary level within the OECD. 

Norway

Norway is also in the middle of an election campaign for the 12 September municipal elections. The debate has been somewhat muted in the wake of the 22 July terror attacks, but Norwegians are less worried about being affected by an economic crisis. 

Norway’s Minister of Finance Sigbjørn Johnsen says Norway has managed well in face of the backlash which has hit many countries in the wake of the financial crisis. The mainland economy has increased seven quarters in a row, unemployment has remained steady at 3.25 percent during the first half of 2011 - 0.25 percent lower than 2010 levels. Unemployment is lower than the average for the past 20 years. 

Even the oil industry is doing well. There have been two big oil finds so far this year.

Finland

Finland’s Minisiter of Finance Jytta Urpilainen is looking for ways to cut the state budget. The previous government spent three years overseeing large budget deficits. The money has been spent to stimulate the economy and to fight unemployment after the financial crisis which hit Finland hard.

When six political parties agreed to form a coalition government on 22 June this year, they also agreed to cut costs. Many of those measures will be brought in early. Next year will see cuts to the tune of up €1.16bn and €1.1bn in tax increases, according to Urpilainen. This should reduce the budget deficit down to €6.8bn from €8.3bn.   

Iceland

Iceland’s recovery has been swifter than most observers thought possible.

The Icesave negotiations with the UK and the Netherlands has so far remained a black cloud. Icesave was owned by the Icelandic bank Landsbanki. When it went bust, Iceland’s President was reluctant to accept an agreement to pay compensation to foreign Icesave account holders. Icelanders have also said no to Icesave in referendums.

But according to the latest calculations Landsbanki’s assets exceed the demands from  the creditors. The issue will be dealt with in the EFTA court.