Sweden Background A military power during the 17th century, Sweden has not participated in any war in almost two centuries. An armed neutrality was preserved in both World Wars. Sweden's long-successful economic formula of a capitalist system interlarded with substantial welfare elements was challenged in the 1990s by high unemployment, rising maintenance costs, and a declining position in world markets. Indecision over the country's role in the political and economic integration of Europe delayed Sweden's entry into the EU until 1995, and waived the introduction of the euro in 1999.
Sweden Economy Aided by peace and neutrality for the whole 20th century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Privately owned firms account for about 90% of industrial output, of which the engineering sector accounts for 50% of output and exports. Agriculture accounts for only 2% of GDP and 2% of the jobs. The government's commitment to fiscal discipline resulted in a substantial budgetary surplus in 2001, which was cut by more than half in 2002, due to the global economic slowdown, revenue declines, and spending increases. The Swedish central bank (the Riksbank) is focusing on price stability with its inflation target of 2%. Growth remained sluggish in 2003. On September 14, 2003, Swedish voters turned down entry into the euro system, concerned about the impact on democracy and sovereignty.
Sweden Location Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, Kattegat, and Skagerrak, between Finland and Norway
Sweden Flag blue with a golden yellow cross extending to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag)