Swedes Announce Austerity Plan

The government reached agreement Sunday with the main opposition party on a precedent-setting austerity program that further erodes Sweden’s cradle-to-grave welfare system.

The deal helped Prime Minister Carl Bildt avoid a collapse of his center-right coalition government. It is intended to restore confidence in the economy in advance of Sweden’s expected entry into the European Community by 1997.

“The package constitutes a signal to the rest of the world that Sweden is a country which has the will and the ability to tackle its financial problems,” Bildt said. The problems include a large budget deficit, a weak currency and high unemployment.

The national news agency TT said the package includes higher gasoline and tobacco taxes and delays cuts on property and wealth taxes--even though Bildt’s coalition came to power in September, 1991, promising tax cuts.