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OPINION: The countryside has the best possibilities for creating a new life in Sweden

Life in rural Sweden may have its drawbacks, but the countryside is more welcoming towards immigrants than many people think, writes Ariz Kader in this opinion piece.

Published: 30 July 2021 11:55 CEST

OPINION: The countryside has the best possibilities for creating a new life in Sweden

Life in the Swedish countryside is starkly different to life in the city, writes Ariz Kader. Photo: Private

In July 2021, Ariz Kader wrote a short Twitter thread documenting his experiences as an immigrant to Sweden. The thread contrasted his experiences growing up in an immigrant-heavy suburb of Stockholm with his current life in the Swedish countryside and included his thoughts on what this could mean for integration into either community.

As the thread gained a lot of traction online and was widely discussed, we asked Aziz to write a version of the it for our readers. Some of the text has been altered for clarity’s sake.

I lived in Stockholm for about 14 years in my childhood and teenage years, and in retrospect, I can’t think of a more segregated experience. Echoing a lot of my friends of the same generation (first generation of immigrants) – to a certain extent – it feels as if the generation that were born here in the suburbs speak Swedish less fluently than we did. To me, this seems natural as it reflects the concentration of non-native speakers creating their own dialect, rather than learning established ones from native speakers.

Schools in these areas also suffered growing up. Many teachers preferred not to be assigned there and kids from troubled backgrounds made teaching difficult for everyone. This was the case in my school as well.

In Sweden, there is a pedagogical culture of parent involvement in teaching with parents being involved heavily in school meetings, collaborating with teachers, and actively participating in other activities. With few Swedes around, teachers who worked in our schools later told me that immigrant parents simply didn’t pick up these cultural habits.

Shops in these areas also reflected both the kinds of communities that exist with immigrant food shops, cafes, and clothing shops mirroring the diverse background of residents, but you typically also got fewer general stores because those businesses didn’t think it was worth the investment to set up shop. This resulted in immigrant suburbs with a good variety of ethnic foods and clothes, but generally not much else, and so limiting the ability of people to have access to jobs locally.

All in all, these areas have a pretty heavy “us vs them” mentality, with immigrants believing the state isn’t doing enough to promote good services and investment, while businesses and services refuse to invest because of a real or perceived unsafe environment.

As a kid growing up there, there was an extreme sense of hopelessness. Society was perceived as being against immigrants in general. My first clear memory/experience of speaking to a Swede my age from a non-immigrant background is from when I was 12.

The stark cultural differences between Swedish families and immigrant families also created huge hurdles for understanding and feeling welcome. In my family, if we had unexpected guests, we would simply cook more food. In many Swedish families, though of course not all, you were expected to go home to eat or even stay in your friend’s room while the family had dinner.

Many Swedish cities are heavily segregated. Photo: Bertil Ericson/TT

Moving back to Sweden after spending a decade abroad, I settled down in the countryside, and it genuinely felt like I had moved to another country entirely to the one I remember from my childhood years. When we moved in, every single neighbour came to welcome us. We were invited to dinner at everyone’s house.

I get questions and comments about my background that may be perceived as a bit naive or even offensive without context, but when you get to know my neighbours, you understand it comes from a genuine desire to know more about where I come from; it’s never a wish to offend.

In the city, I often feel prejudices seem to be held to oneself with the effect being obvious segregation with people in affluent suburbs being “anti-racist” while never setting foot in an immigrant-heavy area. In the country, prejudices are there, but are open to change with a conversation.

There are drawbacks, of course. There is little to no access to my traditional foods, nor is there a community of immigrants that might speak my language. My kids will also have a harder time learning my language despite my effort to teach them. But since we live in this country, and since it is their home, I consider that a small price to pay for them growing up as an equal and appreciated part of their community, and not some outsider who will never truly fit in.

This probably boils down to the larger question of what becoming a part of a new country really means. How much do we keep of where we came from if we want to successfully live where we have decided to settle down?

But, in case you really do want to live and be part of the place you decide to call home, I honestly believe the countryside has the best possibilities for creating that new life, and not turning you into a third, fourth, or even fifth generation “immigrant”.

Ariz Kader is a research assistant at Uppsala University’s Peace and Conflict Research Institute. Follow him on Twitter HERE.

Ariz Kader. Photo: Private

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Should Sweden abandon a weak krona for the euro?

The krona hitting rock bottom has reawakened a debate that had been dead for twenty years.

Hedge fund manager Christer Gardell kickstarted the debate before the New Year, when he said Sweden should abandon the krona, which was now “a shitty little currency”. In January, the Moderate Party grandee Gunnar Hökmark, chief of the Frivärld think-tank and long-term euro advocate, argued that Sweden should join.

Veteran economist Lars Calmfors, who chaired the government inquiry which in 1999 recommended that Sweden stay outside, made a similar call shortly afterwards. Carl Hammer, chief strategist at SEB, who had voted against joining in the 2003 referendum wrote in May that he, too, was now “leaning towards a ‘yes'” on euro membership.

Now one of Sweden’s three government parties has started to campaign on the issue. The Liberal Party, long in theory in favour of euro membership, on September 4th called for a new government inquiry on joining the currency.

“We can quite simply no longer afford to stay outside [the euro],” the party’s leader Johan Pehrson wrote in the Aftonbladet newspaper. “Let’s upgrade our EU membership from ‘basic’ to ‘premium’. Let’s bring in the euro now!'”

Is it a hot topic?

According to Calmfors and Hammer, the debate is raging in the circles they move in, but has yet to really spread to the general public.

“Between 2010 and the end of last year, I don’t think I was asked even once to speak about Sweden and the euro. But now I have two or three invitations each week, and in fact six this week when we are approaching the 20th anniversary of the referendum.”

“I see a lot of academic and business seminars on the weak krona,” Hammer agreed.

For both of them, the revival in interest has come about mainly due to the weakness of the krona, which Calmfors complained had been trading as if Sweden were a “banana republic”. And unlike during the 1999 internet crash or the 2007 financial crisis, when a drop in the krona helped bolster Sweden’s economy, this time the weak currency was causing problems.

“Earlier it has benefitted us,” Calmfors said. “The krona depreciated and firms could gain market share. It helped stabilise output and employment,” he explained. “But this time, it’s different. Now, the depreciation of the krona counteracts the efforts of the Riksbank to get inflation down and reduce aggregate demand. So this time, it is a problem.”

For Hammer, the weakness of the krona was more understandable, reflecting a flight to strong currencies in reaction to the war in Ukraine.

“Had we not had Ukraine, and had we not had other global issues, I think the krona would have been stronger,” he said.

Calmfors isn’t so certain about this, pointing out that the Swiss Franc, another small floating currency, has not been similarly weak. He does, however, see the invasion of Ukrainian as the second big reason why the euro debate has revived.

“The war in Ukraine has made Swedes recalibrate our view of our position in the world,” he said. “The application for Nato membership is the most obvious evidence for this, but I think it spills over to the euro issue as well.”

Lars Calmfors, Professor Emeritus in Economics at Stockholm University. Photo: Anders Wiklund/TT

HOW HAVE THE FUNDAMENTALS CHANGED?

1. Sweden’s government finances are much stronger

While the weak krona is the catalyst for the debate, for Calmfors, the improvement in Sweden’s government finances is a much better reason for sceptics to change their minds.

When he submitted his report in 1999, his committee’s main argument against joining was the risk of a country-specific economic shock which would affect Sweden, but not other EU countries. Such a shock would be hard to combat if Sweden no longer had the freedom to set its own interest rates or devalue its currency.

“We argued that (…) it’s good to have your own monetary policy, an exchange rate that can change,” he said.

At that time, Sweden’s national debt was at 70-75 percent of GDP, well above the 60 percent that is the (increasingly theoretical) maximum for countries signed up to the EU’s Stability and Growth Pact.

“This was very important in the 1990s, because we had a sovereign debt crisis in Sweden, so fiscal policy could not be used as a substitute for monetary policy,” he remembered.

Now, Sweden’s national debt is just 35 percent of GDP, well below that of France at 98 percent or Germany at 60 percent and, for Calmfors, this removes the biggest obstacle to joining, as Sweden’s government would be able to spend its way out of any country-specific shock.

“That’s very low in an international context, so we have a lot of fiscal firepower. No one would argue with us if we had an expansionary fiscal policy.”

Hammer, arguing along the same lines, pointed out that in the years before and since the euro referendum, Sweden had never in fact suffered the sort of country-specific shock that Calmfors and his committee had worried about. The Riksbank, meanwhile, had always run a monetary policy in line with that of the European Central Bank.

“For the past 30 years, Sweden has been living with a floating exchange rate but living as if we’ve had a fixed exchange rate,” he said.

The country, he explained, had had strict limitations on government spending, a surplus target, a very coordinated and orderly wage bargaining process, and a fully funded pension system. “So if any country would have the room and possibility to live with a fixed exchange rate, it’s Sweden.”

2. Businesses don’t use the krona anyway

For Hammer, the biggest new argument against the krona is not so much improved government finances as the fact that Sweden’s big companies now barely use it.

And the same goes for Sweden’s pension funds.

“Large corporations don’t want to deal in the krona – they prefer to make transactions and trade in euros and dollars – and we channel a huge part of our surplus or excess savings into foreign asset markets,” he said. “So, we’ve already to some extent adopted foreign currencies, but we’ve also kept the krona, which from my perspective makes the arguments for having it less strong.”

It is this which has pushed him towards a “yes” despite continuing to believe that the euro is “a suboptimal currency union”.

“I’m leaning towards voting yes if we were to have a new referendum on the basis that the foundation for the currency has been undermined by the fact that we’re so dependent on foreign currency,” he said. “From that perspective, I think, you can make a case for joining the euro on the grounds of greater financial stability.”

3. After Brexit Sweden looks more and more alone

With the UK leaving the European Union altogether, Croatia joining the euro this year, Bulgaria scheduled to join in 2025, and Romania in 2026, the number of countries who are in the EU but not the eurozone is falling.

“If you ask people, like Swedish commissioners in the EU or people that have been doing negotiations in in the EU, they have the view that we have lost out by not belonging to the core,” Calmfors said. “The risk that we will lose out probably becomes bigger, the greater the share of EU countries that adopt the euro.”

Carl Hammer, chief strategist at Sweden’s SEB Bank. Photo: SEB

WHAT ARE THE STRONGEST ARGUMENTS NOT TO JOIN?

1. The risk of country-specific shocks is real

Just because Sweden has more fiscal firepower to deal with a country specific shock does not mean the risk of such shocks is not a major drawback to euro membership.

Finland suffered one when Nokia, far and away the country’s biggest company, mismanaged its reaction to the launch of the iPhone and exited to the mobile phone business. Between 2008 and 2022 its debt to GDP ratio more than doubled from 33 percent to 74 percent.

Greece, Italy, Spain and Portugal arguably suffered from the issue during the European banking crisis.

As Sweden’s economy is unusually sensitive to interest rates, with much higher private debt and a high share of variable rate mortgages, the ECB could easily set an interest rate that, while right for most eurozone countries, would be too high for Sweden.

“That could be a problem, but it’s also a problem that could be dealt with by using fiscal policy,” Calmfors argues.

2. The risk of bank bailouts and country bailouts remains

The other big argument against joining the euro, which was clearly demonstrated during the European debt crisis from 2009 until about 2014, is that Sweden would have to help bail out countries, such as Italy and Greece, which have been less disciplined in the management of their government finances.

Joining the euro would also mean joining the European Banking Union, which means that Sweden might also have to participate in rescuing banks in countries with less well-functioning financial supervision.

Calmfors acknowledged that this was still a risk, but argued that members of the European Union who are not part of the eurozone were increasingly being asked to contribute to rescue packages anyway.

“If you look at the support after the Covid crisis and during the Covid crisis, we had to pay that as well, even though we were not a member of the monetary union,” he said.

And when it came to bank bailouts, Sweden was, he argued, as likely to benefit as to lose out, given the high indebtedness of Sweden’s citizens.

“We might end up having to pay for bank crises in other countries. But on the other hand, we would also be helped if we had a financial crisis, which of course is not something we can rule out,” he said.

Also, he said there might be an advantage in having banks and other financial services regulated by the European Central Bank and other European regulators, as a European regulator might have more expertise, there are many cross-border links between banks, and there would be less of a risk of a cosy relationship building up between local banks and the regulator.

HOW HAVE THE ADVANTAGES OF EURO MEMBERSHIP CHANGED?

Calmfors argues that while the negative risks of adopting the euro have diminished, the advantages remain more or less the same.

“The biggest benefit is of course that having different currencies is a kind of trade impediment and that would be eliminated, which would mean more trade, which would mean that we use our resources more efficiently, so it would give slightly higher growth over a long period, which, even if small each year, would accumulate to quite a lot in the long term.”

Recent research suggested, he added, that this effect might be more significant than people previously thought.

“Studies seem to point to much bigger effects than we expected in the 1990s. We’re talking about a 10 to 20 percent increase in trade, not from one year to another, but over a number of years,” he said.

The problem with the debate over euro membership had always been, he concluded, that the benefits and risks were of such a different character.

“You can’t really make an economic calculation, because you are comparing different things: We are comparing small, but certain positive gains – because there will be more trade that we will get slowly over years – with a risk of big macroeconomic shocks that can have huge effects over a few years.”

This makes it hard for economists to reach a firm conclusion.

“You can’t really say what is right and wrong, but I think what you can say is that the balance has shifted in the direction of being a more positive calculation for being a member today than there was 25 years ago.”

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