Prime Minister Reinfeldt
Economic Forum

Reinfeldt Warns of Dangers of Stimulus Plan.

Sweden’s Prime Minister Fredrik Reinfeldt has warned leaders at the World Economic Forum in Davos of the dangers of large fiscal stimulus packages.

”We learned in the early 1990s that huge deficits can lead to future imbalances, and that lesson should be remembered.” Reinfeldt said.

The United States Congress has been looking for ways of expanding President Barack Obama’s 819 billion dollar economic stimulus package which many at the forum in Switzerland fear could drive up inflation around the world.

Sweden’s Finance Minister Anders Borg attended the Forum with Prime Minister Reinfeldt and told reporters that Sweden needed to do more to stabilise the banking sector.

”We have done measures to stabilise the banking and the financial system but obviously we need to do more, in terms of stabilising the banking sector, in terms of fiscal policy, Borg said.”

”We need expansionary policy at the current juncture.We are planning to strengthen our programme in dealing with banks. In the near future we will come back on this issue.”

The Finance Minister and the Prime Minister also reiterated their desire for Sweden to join the Euro but said that a referendum was unlikely in the next couple of years.

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