Europe's news in English

COPY LINK

JOBS

Sweden best in EU for competition: ranking

Sweden's economy remains the most competitive in the European Union, according to a new ranking from the Geneva-based World Economic Forum.

Published: 9 May 2010 11:33 CEST

Sweden, which also led last year’s list, pipped Denmark and Finland to the top EU spots as WEF gave the Nordic nations high marks for innovation and cooperation between the business and tertiary education sectors.

“The Nordic countries have also achieved a high level of social inclusion, with low unemployment (especially in Denmark, pioneer of the “flexicurity” system) and strong participation of women in the workforce (especially in Finland and Sweden),” WEF said in a statement.

“These countries also have developed highly-skilled workforces through top-notch educational systems and strong on-the-job training programmes.”

The 27 EU countries were measured in terms of their success in relation the EU’s competition benchmark, commonly referred to as the Lisbon criteria.

However, in its fifth and final biennial review, WEF found that the EU as a whole had failed to measure up to its goal of becoming the most competitive economy in the world.

“In 2000, the EU set for itself an ambitious action and development plan with the Lisbon Agenda. As this Review indicates, while some progress has been made, much remains to be achieved in order to fully harness Europe’s economic potential.”

The World Economic Forum is a non-profit foundation best know for its annual meeting in Davos in the Swiss Alps, where business leaders and intellectuals converge to discuss potential resolutions to global problems.

Rank 2010 (Source: World Economic Forum)

1. Sweden

2. Finland

3. Denmark

4. Netherlands

5. Luxembourg

6. Germany

7. Austria

8. France

9. United Kingdom

10. Belgium

11. Ireland

12. Estonia

13. Cyprus

14. Slovenia

15. Czech Republic

16. Portugal

17. Malta

18. Spain

19. Slovak Republic

20. Lithuania

21. Hungary

22. Latvia

23. Greece

24. Poland

25. Italy

26. Romania

27. Bulgaria

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

Three ways Sweden's slashed interest rate will boost your finances

Lower mortgage rates

The policy rate is not the same as the interest rate on your mortgage, although they are linked. In a policy rate prognosis from March, the bank predicted that the policy rate could drop to as low as 2.75 percent by the end of 2025, a drop of 1.25 percentage points since the beginning of 2024.

If mortgage rates drop by the same amount, you could expect a drop in the monthly cost of a 3 million kronor mortgage of around 3,000 kronor a month, not including the tax rebate for interest costs.

IN FIGURES: How could lower interest rates affect your Swedish mortgage?

Higher property prices

As mortgage rates get lower, the housing market is likely to improve, as buyers know their monthly costs aren’t going to skyrocket due to ever-rising interest rates.

If you already own a home and you’re planning on buying and selling at the same time in the market, this will affect you less, as the price of your new home will most likely go up at the same rate as the price of your old home, but this is good news for anyone planning on selling.

It’s worse news for first-time buyers, who will have to save a larger deposit as prices go up, but on the other hand they’ll get lower mortgage rates and a more stable policy rate makes it easier to plan ahead for the future without being surprised by ever-increasing rates.

A stronger Swedish economy

The Riksbank’s decision to lower the interest rate is proof that the bank believes inflation is over – for now at least. This means that we can expect to see inflation remain at a more stable level, and we’re unlikely to see anything close to the ten percent inflation we saw at the end of 2022.

Lower inflation means that Swedish monetary policy won’t need to be as cautious or restrictive in the future, as the government and the central bank no longer need to put all their efforts into fighting inflation.

That’s not to say that authorities will start stimulating the economy just yet – they’re likely to proceed with caution to make sure inflation really is down for the long-term – but Thursday’s interest rate announcement indicates that the “economic winter” Finance Minister Elisabeth Svantesson warned of in September last year could be drawing to a close.

Is it all good news?

In the short term, the value of the krona is likely to worsen somewhat, as the central bank has lowered Sweden’s interest rate ahead of other major central banks. The krona weakened slightly after the bank’s announcement on Thursday, dropping 8 öre in value against the dollar and 7 öre against the euro.

This is good news for people with income in other currencies, but bad news for those of us who are paid in kronor.

Having said that, a stronger Swedish economy is good news for the value of the krona in the long term, although it’s difficult to predict when the krona will start to gain in value and by how much.

At the end of last year, Riksbank governor Erik Thedéen described the krona as “undervalued”, and underlined the importance of having strong foundations in the Swedish economy.

“The Swedish economy is, at its foundations, well-managed, and sooner or later this will lead to a stronger exchange rate,” he said. “Sweden has strong finances, a well-educated labour force, responsible salaries and a good underlying level of competition.”

“As anyone who has tried to predict the exchange rate knows, it’s genuinely difficult to say exactly when it will go up and by how much, but it can also happen quickly when the trend is broken and the krona starts to gain in value.”

Url copied to clipboard!