SWEDEN FACES DIFFICULTIES

Press, Volume LXXXIX, Issue 26967, 17 February 1953, Page 6

SWEDEN FACES DIFFICULTIES

INCIPIENT EXPORT SLUMP POSSIBLE LABOUR UNREST AND UNEMPLOYMENT (From a Reuter Correspondent.) STOCKHOLM. Sweden is facing harder times and labour unrest in 1953. An incipient export, slump, impending wage cuts and tens of thousands of men and women stood off in the factories during the last few weeks show that the long years of easy living are over. The Swedes must work harder and more cheaply if they* are to avoid severe unemployment and maintain their standard of living which many of them say is now the highest in Europe. As their own statistics and the recently published report of the Office of European Economic Co-operation show, general production costs have risen more in Sweden since 1950 than in any other European country. The Swedish engineering industry has published statistics showing that its particular labour costs have risen 39 per cent, since 1950. In West Germany, the increase for the same industry was only 6 per cent., in Holland 7 per cent., in Great. Britain 12 per ce'nt., in Italy 17 per cent., and in Finland and Norway 22 per cent., according to the same Swedish statistics. The result is that many of Sweden’s exports are too expensive to compete with the lower-priced goods of West Germany, Great Britain, Japan and other Countries. Foreign firms offering cheaper goods are also getting a firmer foothold in the Swedish domestic market. For example, 80 per cent, of all the nylon stockings in Sweden four years ago were home manufactured. Now 55 per cent, are imported because toreign producers, mainly British, are able to offer good quality stockings at little more than half the price of the Swedish product. Even the Swedish State Railways are buying from overseas. An order for 300 goods trucks has just been placed with a Belgian firm. The Belgian price, affer payment of freight and customs duties, is 24,620 crowns (about £1640) a truck. The lowest Swedish tender was 26,060 crowns (about £1738), although no freight charges or customs duties applied. Some Swedish exports, like wood pulp, have maintained their volume against foreign competition, in this case North- American, but their value has fallen sharply. Pulp Manufacturers Swedish pulp manufacturers a year ago were in luxury in a sellers’ market with, the highest prices in history, although their own Government had introduced an export tax to skim the top off them. Naw, the same producers have to fignt hard to sell at little more than half last year’s prices. Things would not be so bad if the prices of Sweden’s imports were falling as fast as the prices of her exports, because this would mean that her terms of trade were unchanged. The official wholesale prices index shows, however, that Sweden is importing more expensively and exporting proportionately more cheaply than a few months ago. Exports fetched more than imports cost in the first quarter of the year. By the last quarter, exports were fetching less than imports cost. Both employers and labour agree that these are the symptoms of eqonojpic di sease - But they advocate different remedies. The Trades Unions Federation offered to make a pegged wages pact with the employers’ associations instead of pressing for wage increases when the new collective agreements are negotiated at the turn of the year, in January and early February. As such a pact would mean that wages rose only if the cost of living went up. the unions felt—and said—that they were showing a sense of responsibility which should earn the employers’ gratitude. They expected the employers to welcome their proposal as realistic and restrained. Offer Declined Instead, the employers declined the offer. In talks with the federation, they made it clear that they wanted to be free to reduce wages in 1953 in some industries. A pegged wages pact, the employers said, would not .enable them to reduce their overhead costs and compete with foreign producers. They said, too, that they did not trust the accuracy of the official cost of living index to which it was proposed to peg wages. The result is that each union is now seeking to make the best deal it can for its members. “Distressed” industries like textiles and engineering will probably pay lower wages. Industries just holding thei s , own » like paper and pulp, will Probably pay unchanged wages. In industries where the unions press hard for increases and the employers insist equally hard on decreases, a deadlock may well arise, leading to strikes. With employer-employee relations strikingly smooth during the last quarter of a century in Sweden, strikes oave been unusual. Disputes have generally ended' in an amicable compromise before a strike could be called. N °w« there is bitterness on both sides. Employers’ Federation rejected the Trades Unions Federation’s pegged wages offer with a sharpness which was strongly criticised in both capitalist ana labour newspapers.

Nationalisation „ r ln the labour camp, the big Metal Workers’ Union at Gothenburg in West Sweden, has appealed to the Government to nationalise more industries and to increase the taxes on companies’ profits. This union plea for more nationalisation struck a jarring, ideological in political discussions here. Hitherto, neither the trades unions nor the Socialist Party have campaigned for. more nationalisation. Their policy has been to let private enterprise bake the biggest possible cake and then ensure that the workers get a fair slice. The few existing nationalised enterprises • were all started with the approval of the other parties and, in. some cases, at their instigation. •

In the same way, restrictive practices have never been advocated or tolerated in Sweden. “Greater output per worker for greater national prosperity,” has been the slogan of the unions and all the political parties except the Communists. As Sweden enters her hardest year in a quarter of a century, new ideological controversies are arising at a time when national unity is essential. These controversies are sharpened by the fact that the employers urge less, not more, State control as a remedy for Sweden’s economic ills. They want the Socialist-Agrarian Government to loosen its bold on the money market so that companies can finance new projects more easily. The investments tax, designed to prevent companies from inflating their overhead costs—and thus reducing the profits shown on their books—by unnecessary purchases of new plant and equipment should go, the employers say, because it hampers expansion and rationalisation. The Government has shown no sign of sharpening or loosening controls. It has recently appointee! a committee of experts to “recommend measures for stimulating marketing, production and employment.” The Prime Minister (Mr Tage Erlander) has publicly promised that the State will place orders with distressed industries to keep them going. A Government bill- is being introduced to increase unemployment beneAll in all, 1953 looks like being a testing year for the Swedes. After years of plenty by Europe’s warthey are in for a spell of- austerity. If they can weather it without strikes on the one side or exploitation on the other, they can rightly claim that their small neutral corner of Europe is a political oasis.