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WORLD : Swedish Economy ‘Falling Apart’

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<i> From Times wire services</i>

Swedish Prime Minister Ingvar Carlsson today said the economy is “falling apart” and his government will resign unless Parliament bans strikes and imposes a wage-price freeze for two years.

The plan that Finance Minister Kjell-Olof Feldt outlined in Parliament would also put a two-year freeze on local taxes, rents and stock dividends.

Collective bargaining is a pillar of the Swedish welfare system, which has eliminated poverty and guaranteed health care and education for everyone. The Swedish mix of socialism and capitalism became a model for the industrial welfare state.

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“What was known as the Swedish Model is, on the whole, gone, and this is just another sign,” bank economist Nils Lundgren said on Swedish radio.

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