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# Situation Report on Sweden

## Introduction

1. The most remarkable feature of modern Swedish history is the uniquely steady course her external and internal affairs have followed for decades and even longer.

2. The war against Napoleon (1814/15) was the last war in which Sweden participated. She has, thus, enjoyed almost 150 years of peace and during that entire period Sweden joined none of the several alliances or power groupings which used to divide Europe, and now divide the world, into opposing camps. During this same period, however, Sweden has constantly maintained a very sizeable military establishment and her policy of non-entanglement in alliances or blocs has been, and continues to be, one of ARMED Neutrality.

3. Internally Sweden still lives under a constitution enacted in 1809 following the loss of Finland. The document, in the course of time, has been amended frequently and quite significantly but the changes were gradual and evolutionary rather than abrupt and revolutionary. The most important of these changes was made as far back as 1866, when the medieval four-chamber Parliament of Estates (Nobility, Clergy, Burghers, Peasants) was transformed into a modern two-chamber legislature composed of an Upper and a Lower House.

Members of the Upper House are elected by the 24 Provincial Diets and by the Municipal Councils of Sweden's four largest cities. Members of the Lower House are chosen directly by the people (Swedish citizens over 21 years of age) under a system of Proportional Representation. Every year the Provincial Diets and Municipal Councils elect one-eighth of the Upper House total membership - which, therefore, can change but very gradually. National elections for the Lower House occur, normally, every four years (1960, 1964 etc.), but the preferences of the Swedish electorate have become stabilized to such an extent that the basic strength-relationship among Sweden's five parties has remained unchanged for more than a generation.

Among the five parties the **Communists** represent the radical and the **Social Democrats** (SocDem) the moderate left. The position of a center party is held by the **Agrarians** who represent Sweden's farmers. There follow, right-of-center, first the **Liberals** and then the **Conservatives**, whose conservatism, however, is distinctly moderate.

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4. For many decades now almost one-half of Sweden's voters have habitually cast their ballots for the **Socialdemocratic** party which, as a result, has regularly held **just** under one-half, or even exactly one-half, of the Lower Chamber's 230 (since 1960: 232) seats. The other half of the seats has gone, with the same regularity, to the **Agrarians** (at present 35) **Liberals** (at present 39) and **Conservatives** (at present 36) and to the very small **Communist** party (at present 6). While the number of Communist representatives has become virtually static in recent years, there have been strength shifts from election to election **within** the Agrarian-Liberal-Conservative sector of Parliament, but the basic features of the Swedish political scene appear now firmly established: The SocDems can count on the allegiance of nearly 50% of the electorate, the Communists draw between 4 and 5% of the vote, and the other three parties compete for the remaining 45 plus % of the ballots. The SocDems, as a result, have governed Sweden **ever since** 1932 (except for a 3-months interval in 1936) either alone or - 1936/39 and 1951/57 - in coalition with the Agrarians. But even during the periods of SocDem-Agrarian coalition key Cabinet posts were always reserved to the SocDems. The present Prime Minister, SocDem Erlander, has held the **Premiership** **uninterruptedly** since Oct 1946, a length of service very rarely encountered in other parliamentary democracies where heads of government change rather frequently due to political shifts in the Legislature and in the electorate.

5. Sweden's course in foreign and domestic affairs is not only extraordinarily "steady," it is also unfailingly middle-of-the-rain. "Country of the Middle Way" has, in fact, become Sweden's sobriquet. Most thoroughly Western in her way of life and political sentiments, she nevertheless pursues a carefully balanced policy of neutrality in the East/West conflict. The nation for almost 30 years has chosen to be governed by the SocDems, yet about 90% of Sweden's productive apparatus has remained privately owned and the economy as a whole is not "planned" but free. Swedish living standards are high, higher perhaps than anywhere else outside the US, but the wealth and income of the nation are so evenly spread that few Swedes are left who are either very rich or very poor. If, on the one hand, the great private fortunes and huge individual incomes are missing which can be found in the US, there are also in Sweden none of the slums and blighted areas which form part of the picture of American cities.

6. The fact that Sweden for such a long time has not known war, foreign occupation, revolution, or bitter class struggle and great economic crises does not mean, of course, that she has no problems. The Swedes themselves - despite a considerable degree of smug self-satisfaction with their economic and social progress and with their foreign policy of neutrality which kept them out of two World Wars - take pains to point out to non-Swedes that they are not simply a quaint, lucky little nation without serious troubles, but that there

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are difficulties to be overcome internally as well as in Sweden's relations with the outside world. Yet, even if one does take a close look at Swedish foreign and domestic affairs, one cannot help concluding that, in comparison not only to her neighbor Finland but also to virtually all other countries of the globe, Sweden's problems are limited in number and undramatic in nature.

## Foreign Relations

### The Policy of Neutrality

7. Sweden's main problem lies in the simple fact that in a world of super-powers she is but a very small country. She cannot actively shape the course of world events and in the conflict of the giants her role, in the final analysis, is limited to that of a bystander. This feeling of being innocent-impotent bystanders in a conflict which may destroy not only the contestants but Sweden as well, explains why the Swedes, on occasion, assume a somewhat irrational plague-on-both-your-houses attitude. Being very civilized people who have kept out of the fight for a century and a half they seem to feel, at times, that everything could be so simple, if only the big countries - *all* of them - would be as reasonable and enlightened as little Sweden. Knowing only too well, however, that they cannot decisively influence the great powers, the Swedes are firmly resolved to hold themselves aloof from the E/W struggle and to cling more than ever to their traditional policy of neutrality.

8. Since Sweden is so clearly a Western country it would be useless for the Swedes to pretend that they have no warmer feelings for the democratic West than for the Communist East. But the official policy of the country follows scrupulously the line of non-alignment - especially in the military field - with either bloc. The paramount objective of this policy is to demonstrate to the Soviets that Sweden is not throwing in her lot with the NATO West, that on the contrary she has remained, and will remain, "independent" and never turn against the USSR - *unless* the USSR attacks Sweden first. The Defense Forces of Sweden - which are far larger than those of comparable NATO countries - have the declared mission of resisting an "aggressor's" first assault at least long enough to permit forces "from outside Sweden" to come to the rescue before the country is overrun. In theory the "aggressor" might be either the USSR or the US-led West. But it would be difficult to find a Swede who would not assume as a matter of course that an attack, if any, would actually come from the East and help, if any, from the West. In other words: While Sweden is deeply wedded to her neutrality policy, the nation nevertheless knows that the potential enemy is the USSR and potential ally the US and NATO.

9. The Swedes contend that their continued policy of neutrality serves not only the national interests of Sweden, but constitutes also

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the best contribution their country could make to the peace and stability of all N Europe. They point above all to the close connection between Swedish neutrality and Finland's survival as an independent nation. Most political observers outside Sweden, and certainly the Finns themselves, do believe, in fact, that Moscow's surprisingly tolerant attitude toward Finland would cease, if neighboring Sweden, instead of remaining neutral, were to transform herself into a political and military outpost of the Western alliance. The Swedes maintain, furthermore, that even the NATO members Norway and Denmark are less likely to come under Soviet pressure as long as Sweden continues her role as a neutral buffer state. It deserves to be noted that Sweden has never been enthusiastic about Norway's and Denmark's membership in NATO. Despite her long no-alliance tradition Sweden in 1948/49 had engaged in protracted negotiations with both countries for the establishment of a purely Scandinavian Defense Alliance. When Norway and Denmark ultimately decided to join NATO instead, Sweden's Foreign Minister publicly expressed his country's regret at this choice. The Swedes remain basically convinced that not only for themselves but for their Scandinavian neighbors as well Armed Neutrality between the blocs offers greater protection than military alignment with the West.

10. In estimating the extent to which neutral Sweden in a future emergency could actually withstand outside pressure, one ought to remember certain Swedish experiences during WWII. Nazi Germany by massive pressure forced Sweden to permit the movement of German military personnel and equipment across Swedish territory, from German occupied Norway to Northern Finland where German forces were committed against the Russians. At first the Swedes were asked to tolerate such transit traffic for individual German soldiers, allegedly, on leave status. Later Sweden had to give formal consent to the move of an entire, heavily equipped German division from Norway to Finland through Sweden. The Norwegians who had reasons to believe that far more was actually involved than "one" division, joked bitterly at the time: "It is not a division but a multiplication." Sweden did withdraw permission for this German military transit traffic through her neutral territory in Aug 1943, that means as soon as a change in the overall war picture made the Nazi power appear less awesome. But the fact remains that by overwhelming pressure the Nazis were able to dent Swedish neutrality to a very considerable extent.

## Swedish-Soviet Relations

11. Except for the relatively few years of Nazi ascendancy in Northern Europe the Swedes, for centuries, have seen the only real danger to their country as coming from the East, from huge, expansionist Russia - czarist or Communist. Suspicion and fear of Russian aims have remained strong in Sweden even though, in accordance with its neutrality policy, the Swedish Government makes every effort to deal with the USSR in the same normal manner in which it deals with

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other foreign powers. Swedish-Soviet relations have, in fact, in the last two decades, been tolerably "normal," but the underlying tension has come to the surface on more than one occasion.

12. In the immediate post-War years, when the recently victorious USSR was visibly in the process of gaining control over all E Europe, Sweden seemed inclined, to some extent, to buy Soviet good will with economic concessions. In October 1946 she granted to the USSR a credit of 1 billion kronor ($200,000,000) to be spent in 5 years for the purchase of Swedish goods and to be repaid in 15 years. This attempt to promote Swedish-Soviet trade on a broad scale proved disappointing: At the end of the 5-year period (1951) the Soviets had actually used only about one-half of the one billion total, mainly because they were unwilling to pay Swedish prices. Today Sweden's trade with the USSR is insignificant.

13. During the late forties and early fifties Moscow remained well satisfied, however, with Sweden's strict non-alignment policy and particularly with her essentially negative attitude toward Norway's and Denmark's membership in NATO. When in the spring of 1956 Premier Erlander visited the USSR, the Soviets pointedly praised Sweden's general conduct. A joint Swedish-Soviet communique "reaffirmed" Swedish neutrality.

14. The next few years, however, brought considerable Swedish-Soviet friction. In late 1956 after the savage suppression of the Hungarian revolt, and after several cases of Soviet spying in Sweden had become known, there was such an outcry in the Swedish press against the Soviet Ambassador in Stockholm that the latter was recalled to be replaced only after an interval of several months. In March 1957 Premier Erlander, opening the foreign policy debate in the Upper House, accused the USSR of having shown "tragic misjudgment" in Hungary, and demanded a "broader measure of independence" for Poland.

15. A few days after Erlander's remarks Norway received a threatening note from Soviet Premier Bulganin warning against the installation of NATO atomic weapons on Norwegian soil and depicting in brutal terms the catastrophe that would befall the country if, one day, the USSR should have to "retaliate" against NATO bases in Norway. Swedish officials expressed the view that the note was directed "almost as much against Sweden as against Norway" and that it marked a transition from an era of smiles to one of frowns. Swedish government circles saw a special significance in the fact that the note to Norway followed closely an intensive debate in the Swedish Parliament and in the Swedish press which had made it clear that all branches of the Swedish Armed Forces were united in demanding tactical atomic weapons for Sweden's defense. Nobody in Sweden seemed to have any doubt that, the Bulganin note was aimed at all the Scandinavian countries, including Sweden, and the Swedish press reacted sharply to the Moscow intimidation

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effort variously described as a "propaganda offensive," "scare campaign" or "war of nerves." The press was particularly incensed by the fact that at a news conference in Moscow, just before publication of the Bulganin note, a Kremlin spokesman had suggested that the "Swedish authorities take measures to prevent certain comments /in the Swedish press/ which are obviously made to mislead public opinion and do not contribute to improve USSR-Swedish relations." Editorials throughout Sweden seemed as indignant about this Soviet suggestion that the free Swedish press be censored as about the Soviet Premier's note to Norway. The following editorial comments - by leading Stockholm papers known for their generally rather reserved tone - are typical:

"Moscow's propaganda barrage must be motivated by a desire to frighten public opinion /in Scandinavia/ from showing so openly what they think of the USSR and its brutal crushing of...the Hungarian people...We must meet with firmness and cool heads the continued pressure from the East that is to be expected."

"Such innocent clumsiness /i.e., the suggestion that the Swedish press be censored/ can only bring back a grim smile of recognition of a nearly identical statement from the Nazi Goebbels...more than a decade ago."

16. The next crisis in Swedish-Soviet relations occurred in 1959. It was triggered in part by a Khrushchev speech (June 1959) in the Baltic port city of Riga in which the Soviet Premier proposed, not for the first time, that all Scandinavia and the entire Baltic Sea area be converted into a "Zone of Peace," free of atomic and rocket weapons. Swedish Foreign Minister Unden, speaking in Parliament, commented rather sarcastically (June 1959) that the only nuclear power in the Baltic region at present was the USSR and that Moscow would hardly be prepared to free a huge zone of her own territory of nuclear weapons. Unden rejected the idea of a Nordic-Baltic "peace zone" as "impracticable" and declared, moreover, that "Sweden considers the Baltic Sea, its inlets and waters, free for all vessels in peace and war." The specific reference to the freedom of all traffic in the Baltic Sea was in reply to frequent Soviet hints that the Baltic should be closed to all warships of "non-baltic" nations, and be transformed into a kind of private Soviet-Scandinavian lake. Despite this rebuff Khrushchev's campaign for a Baltic "peace zone" continued. In late July 1959, speaking in another Baltic port city (Stettin, Poland), he stated that the Scandinavian leaders who opposed his scheme "must be motivated by a desire to increase tension." He accused the "aggressive forces of certain states," meaning the US, of wanting atomic weapons bases in Scandinavia so that these bases would attract part of the atomic and H-bomb "counter-blasts" (from the USSR) which would otherwise fall on bases in the aggressor's own territory. Scandinavian public opinion became more and more critical of the Soviets and their high pressure "peace campaign" and newspapers as well as opposition leaders

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in Norway, Denmark, and Sweden spoke out sharply against an impending Khrushchev state visit to all three countries scheduled for August 1959. At the end of July Khrushchev abruptly cancelled his planned Scandinavian tour. In similar notes to Oslo, Copenhagen and Stockholm he asserted that there was no point in making the trip "for perhaps a year" because of the "anti-Soviet atmosphere" prevailing in Scandinavia. The notes assailed the three governments for "not having stopped insulting attacks" against the USSR and its Premier by the papers and by the opposition leaders who had protested the prospective Khrushchev visit. It was widely felt that the cancellation of the visits was in reality but another move in the Soviet war of nerves against establishment of nuclear rocket bases in Scandinavia. The Swedish official reply to Khrushchev's note did express regret that some newspapers, organizations and opposition spokesmen had protested the Soviet Premier's planned visit, but it declared at the same time that the USSR had "exaggerated the importance of these manifestations" and pointed out curtly that "Swedish law guarantees freedom of press and assembly."

17. After this exchange of notes Swedish-Soviet relations reverted to routine normalcy until in late 1960 Sweden became aroused by Soviet hostility to UN Secretary General Hammarskjold. At the UN General Assembly meeting (Sep 1960) Khrushchev himself berated Hammarskjold for his handling of the Congo crisis and called for his ouster as Secretary General. The Swedish Foreign Minister, addressing the Assembly, voiced Sweden's unqualified support for the Secretary General and his Congo policy. Sweden also set herself strongly against Khrushchev's demand that the Secretary General be replaced, as head of the UN Secretariat, by a "Troika" i.e., an executive committee composed of three co-equal members representing respectively the East, West and Non-Committed "Blocs." The Swedish Foreign Minister declared that Sweden, for one, did _not_ consider herself as belonging to _any_ "bloc" - neutral, non-committed or other - and that, moreover, the UN should not be run by "blocs," but by an agency independent of blocs, "an agency such as is the office of the Secretary General at present."

18. The seemingly most critical moment in post-WWII Swedish-Soviet relations came in late 1961, when Moscow abruptly demanded that Finland "consult with the USSR on measures for insuring the defense of... both countries from the threat of a military attack by W Germany and allied NATO states." The extraordinarily harsh note, with the tone and tenor of an ultimatum, made it appear a possible first move in a Soviet campaign to draw Finland into the Warsaw Pact and, thus, into the "camp of socialists states." The note seemed all the more ominous since on the very day of its delivery the Soviets had set off - in flagrant violation of their pledge not to test - the largest nuclear bomb ever exploded. This combination of events caused considerable anxiety, but no panic, in Sweden and the other Nordic countries. The Soviet note to Finland specifically criticized Sweden for "underestimating the danger of a military attack by Germany and her allies"

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and for supplying arms to the German Bundeswehr. The immediate reaction in Sweden was a statement by Prime Minister Erlander declaring, in very restrained language, that the USSR demand for Soviet-Finnish consultations was "of concern to Sweden." Erlander, furthermore, stressed the peaceful aims of Sweden's neutrality policy and pointed out that "Swedish arms deliveries to Germany are entirely insignificant, since they constitute but a small part of Sweden's total arms exports which, altogether, amount to only kronor 100 million" ($19.6 million). This very mild riposte to the Soviet blast was, however, supplemented by Erlander telling the Swedish Parliament almost simultaneously that "Sweden can mobilize her essential military forces within 24 hours and can carry out full mobilization within a few days." Commented the New York Herald Tribune: "He /Erlander/ evidently intended his statement /to Parliament/ as a warning that Sweden is prepared to fight...if the need should arise." As we know now, the Soviet-Finnish crisis ended unexpectedly quickly with the withdrawal from the Finnish presidential race of a candidate objectionable to the USSR. Soviet-Finnish consultations, then, proved entirely "unnecessary" and the ultimatum-like note, including the charges it contained against Sweden, was no longer mentioned. Sweden, therefore, was not really put to the test in this Finnish-Soviet crisis which, at first, seemed of such ominous implications for Finland and, indirectly, for all Scandinavia.

19. Since the 1961 Finnish-Soviet crisis the Soviet relationship with all Nordic countries, including Sweden, has, on the whole, been quiet and uneventful. In March 1963 it was announced that Khrushchev had accepted an invitation to visit Sweden from the Swedish Foreign Minister, then touring the USSR as a guest of the Soviet Government. No date has officially been set for the visit, but it will probably take place somewhat in the spring of 1964. There have been some hostile reactions to the proposed Khrushchev visit. Open criticism, however, seems to have been expressed, so far, only by leaders of Liberal and Conservative youth organizations, i.e., by younger elements of Sweden's two right-of-center opposition parties. The leader of the Conservative party's youth organization, for example, stated in June 1963: "The Soviet Premier's visit would be an insult to the Esthonians, Latvians, Poles, Hungarians and others who have come to Sweden for refuge from Communist rule." Since criticism of this kind caused Khrushchev in 1959 to cancel an impending visit to Sweden, it is likely that, in order to avoid a similar eclat in 1964, responsible Swedes will try to keep anti-visit voices muted. A new element of irritation has very recently been injected, though, into Swedish-Soviet relations through the case of Swedish Air Force Colonel Wennerstrom who - as became publicly known, in July 1963 - had been paid by the Soviets for years to spy on Swedish Defense. Because of the Wennerstrom affair a scheduled visit to the USSR by a 17-member delegation of the Swedish Parliament was called off at the beginning of August 1963. As one member (Liberal) of the delegation explained to the press: "After the Wennerstrom spy case I think it impossible to visit a country that has done such things against our nation."

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20. As these latest events show Swedish-Soviet relations have remained potentially tense despite protracted periods of surface calm. The Swedes, however, somewhat like the Finns, have lived so long with the Russian threat, that they feel quite confident, perhaps somewhat too confident, as regards their ability to deal with it.

## Swedish-US Relations

21. Culturally, and in her political institutions, democratic, enlightened, prosperous Sweden is, of course, as much a part of the Western World as the United States itself. But the basically pro-Western and pro-US sentiments of the Swedish nation leave still considerable room for differences of opinion between Sweden and the US. Like virtually all small countries Sweden, to some extent, resents our very bigness and the fact that decisions made in Washington, and over which Sweden has no control, may nevertheless deeply affect Swedish national interests and, ultimately, her entire future. Because of her long non-alignment tradition Sweden, moreover, has become accustomed to exercising a very independent judgement in international affairs and to remaining quite critical even of countries with which she maintains friendly ties.

22. In the UN, for example, Sweden has not infrequently taken positions contrasting with US aims and policy. Already in the early 1950's Sweden constantly advocated immediate admission of Red China to the UN. At the 1961 UN General Assembly the Swedish representative, demanding once again that Red China be admitted forthwith, chided the US for its continued "attempt to delay a decision on China's entry/ that will be inevitable." He added, somewhat patronizingly, that Sweden understood how difficult it must be for the US "to change a policy that Washington has so long persuaded itself is the only right one." He then derided the "fiction that General Chiang's government is the legitimate representative of the Chinese people" and described the "Peking regime as a well stabilized government of a stable republic." When in 1958 the US landed forces in Lebanon to save that small country from civil war and complete chaos, the Swedish Foreign Minister regretted this "hastily improvised US intervention" and criticized generally "US precipitous actions that might frighten peoples in the same way as would Kremlin threats of war." He also remarked that "both the US and the USSR pay only lip service to the principle of non-intervention." Sweden is deeply suspicious of anything that smacks of big power and big stick methods, and there is some inclination among Swedes to forget at times that, after all, she can remain "neutral" and unabsorbed by the USSR, mainly because the US happens to be a big power willing to use her strength, if need be, against Communist expansionism and subversion.

23. It would be wrong, of course, to exaggerate the political differences between the US and Sweden, since in essentials the

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ultimate objectives of the two countries are closely parallel. It is
important, however, to remain fully aware that, despite her great
affinity with the US, Sweden is also remarkably "independent" and self-
reliant. An interesting illustration of this self-reliance is the fact
that Sweden did accept Marshall Plan aid for a few years ($106.8 million
Apr 1948-Jun 1951), but renounced further aid in mid 1951, because she
felt her economic situation to have sufficiently improved. In June
1962, incidentally, Sweden repaid to the US her remaining Marshall Plan
loan debt ($16.3 million) 21 years ahead of the time the debt would have
been due. The early repayment was explained as a Swedish effort to
help alleviate the deficit in the US balance of payments.

24. The Swedes are probably even prouder than nations habitually are of their own internal achievements, and the criticism often voiced by Americans in regard to the Swedish "welfare state" never fails to arouse emotional and angry reactions among all Swedes, including those who disagree with the domestic policies of the SocDem government. Any foreign criticism immediately seems to involve Swedish national pride. In July 1960 President Eisenhower told a Chicago breakfast club that a European Socialist country - presumably Sweden - suffered increased drunkenness, suicides and lack of ambition because of its paternalistic form of government. These rather off-hand remarks caused, in the words of the New York Times, "an explosion of wrath throughout Scandinavia." When General Eisenhower visited Sweden two years later he made a point of apologizing formally for those remarks and of admitting his error. The incident was therewith closed, but the high degree of Swedish sensitivity to American "lack of understanding" for the "Swedish way" should always be kept in mind.

## Sweden and the Nordic Countries

25. Sweden and the other Nordic countries (Finland, Norway, Denmark, Iceland) belong to the so-called Nordic Council, an advisory body in which each of the five nations is represented by members of its Parliament. These Parliamentarians meet once a year to make "recommendations" (on political, economic, social, cultural, legal and technical matters) to the five Governments. The last Council meeting, which took place in Stockholm in February 1963, was attended by the five Nordic Prime Ministers and many of their Cabinet members, although the right to vote in the Council is reserved to the parliamentarians only. Swedes and other Scandinavians point to the Council as the foremost agency of Nordic cooperation, but it should be noted that in reality they no longer consider it effective. Premier Erlander, after having attended the 1963 meeting criticized sharply the lack of tangible results. A leading Oslo paper wrote, in describing the Council proceedings: "Words, words, words." And the idea is now being ventilated of having the Council meet only every two years.

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26. The fact is that because of their common culture and because of the similarity of their political and social institutions the five countries have long organized their intra-Nordic relations (economic, social, educational, scientific, etc.,) so well that these relations have become routine and do not require a high powered political body for still further improvement. As regards, however, the relations of the five with the *outside* world, they can well agree on such general objectives as peace, strengthening of the UN, the desirability of disarmament and of reducing international trade barriers, but their individual positions in the field of foreign affairs are actually so different that neither the Nordic Council nor any other agency could develop a *meaningful* common denominator: Finland, due to her special situation in regard to the USSR, is bound to follow a policy of "friendship" with the latter; Norway, Denmark and Iceland are members of the Western military alliance; Sweden has persisted in her policy of Armed Neutrality. It is true, of course, that the Nordic Nations are bound together by very strong ties of mutual sympathy. Thus, with or without formal organization of a common front vis-a-vis the outside world, they will always try to help and support each other as much as possible. But there is no "Nordic Bloc" pursuing a common foreign or defense policy, even though the individual policies of the Nordic countries supplement each other in many respects.

27. A good example of mutual "strategic" support is the Swedish-Norwegian Agreement of 1956 by which Norway granted Sweden the right to build a marine oil terminal at the Norwegian port of Trondheim and to construct a new highway between Trondheim and the Swedish border. The acknowledged purpose of the Agreement was to give Sweden an outlet to the open sea in case of a wartime blockade of Swedish ports.

## Sweden the EFTA and the Common Market

28. Sweden has been a member of the *European Free Trade Association* ("Outer Seven") since it was established in late 1959. When in mid-1961 Britain - leader of the Outer Seven - announced her intention to seek admission to the European Common Market, it appeared that the EFTA would soon go out of existence. Norway and Denmark - Sweden's Scandinavian companions among the Outer Seven - decided to follow Britain's example and to apply likewise for Market membership. This development posed a serious dilemma for Sweden: If virtually all Western and Northern Europe were to join the Market and thus form one huge Customs Union, Sweden - for obvious economic reasons - could not afford to remain outside the Market. Full membership in the Market, on the other hand, appeared to the Swedish Government incompatible with Sweden's policy of non-alignment. After considerable soul searching Premier Erlander announced in Oct 1961 that Sweden would apply for *Associate* membership. The idea was that associate membership would get Sweden inside the Market Customs Union and, yet, leave her free to negotiate trade and tariff agreements *independently* with countries (e.g. E Europe) outside the Market. The failure of Britain's attempt to enter the Market has for the time being kept the EFTA alive. But the question of Common Market membership will be a thorny one for Sweden, when it becomes acute once more.

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Defense Affairs

29. Any authoritative analysis of Sweden's Defense effort and policy must be left to the military experts. There are two Defense problems, however, which, due to their special psychological and political connotations, must be briefly mentioned.

30. There is, first, the haunting question of how, after 150 years of peace, the Swedish nation and armed forces would stand the unaccustomed test of war. Official Swedish answers, understandably, are reassuring. Swedish Army Colonel Sam Myhrman stated, for example, in 1961 (in an article which appeared originally in a W German military journal and subsequently in the US Military Review):

> "Fortunately there is no evidence to indicate that the Swedish nation would take...an attack worse than would other nations...Historical studies reveal that the Swedish people act against war and its demands by drawing closely together, and by taking a positive attitude when the nation's existence is at stake."

Myhrman, who at the time was Head of the Swedish Defense College, pointed out, however, in the same article that: "Pacifist and nihilistic elements, indifferent toward defense, have in today's Sweden found elbowroom in the press and in the general /public/ debate." The overall political, social and intellectual atmosphere of long-neutral, "progressive" Sweden is, in fact, such that any objective observer must feel some anxiety regarding the spiritual and psychological preparedness of her people, especially the younger and youngest generation. It should be remembered in this connection that the Swedish contingent in the Congo was generally considered quite mediocre from a military point of view. It might well be that Col Myhrman's brief reference to pacifism and nihilism indicates a far deeper concern than the Swedish military are willing to express in their *public* utterances.

31. a. The second defense problem we must mention, because of its political aspects, is the atomic weapons issue. As early as spring 1957 a group of leading military and civilian Swedish defense experts published a semi-official report "The West, the East and We" in which they unanimously demanded *tactical* atomic weapons - be it home-made or imported - for Sweden's Armed Forces. They argued that in an E/W war strategically important Sweden would be confronted, sooner or later, with an unacceptable Soviet ultimatum, whereupon Sweden would be drawn into an active conflict which without tactical nuclear weapons she simply could not sustain. Later in the same year the C in C Swedish Armed Forces insisted publicly, in a report to the Minister of Defense, that Sweden must obtain atomic warheads for tactical weapons shortly.

b. The *only* significant opposition to the C in C's demand for "tactical nucs soon" came from Stockholm's leading SocDem daily, generally considered the editorial mouthpiece of the government party.

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The atomic weapons question was clearly becoming an issue in Swedish politics. The SocDem leadership wanted to put off a decision which, if affirmative, would not have been popular with many of the labor voters. The SocDem party was not, however, opposed to nuclear weapons as a matter of principle. This became quite clear, when in July 1958 the Lower House defeated a resolution prohibiting the manufacture and acquisition of nuclear arms by Sweden. Only the 5 Communists and 5 of the 111 SocDems in the House voted for the resolution. Thus the question remained open. In fact, Premier Erlander in late 1958 declared, at a news conference, that Sweden "could" manufacture her own atomic weapons, if efforts to achieve international control over such weapons should fail. In the late fifties it seemed, at times, that Sweden was inching ever closer to a decision actually to start nuclear warhead production, but since then the trend has been in the opposite direction. It appears, in particular, that Premier Erlander himself has become decidedly skeptical about the value of atomic arms in the hands of small powers. The Swedish Armed Forces, however, continue to insist that the government and nation must be realistic enough to assume that "an aggressor" might support an invasion of Sweden with nuclear warheads. Aware of the politico-psychological implications of the atomic question Military leaders have come to stress especially the "deterrent effect" of Swedish nuclear arms on a potential enemy and their role as "a means to avoid war."

32. As matters stand now it seems certain that the ruling SocDems will continue their policy of non-decision. This appears quite obvious from the following paragraph of the communique (7 Aug 1963) in which the Erlander government announced Sweden's adherence to the Limited Nuclear Test Ban Treaty:

"When it comes to the question of Swedish nuclear weapons, our policy has been for the time being not to make any decision in one or the other direction. We have wanted to await developments, both regarding internal scientific and industrial prerequisites for Swedish production of nuclear weapons and international conditions which are important for a decision. By adhering to the present treaty we do not bind ourselves to anything else than not to conduct certain types of tests. But it has always been clear that progress in the disarmament question, in the first place achievement of a Test Ban Agreement, must affect Swedish judgement on the question of acquiring our own nuclear weapons. It is the Government's hope that the Moscow Test Ban Agreement will lead to further concrete results in disarmament. If these hopes should be realized, the important first step which has been taken through the Moscow Agreement may be of decisive importance to the definition of our standpoint on the question of Swedish nuclear weapons."

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## Domestic Affairs

33. The essential facts about Sweden's internal situation have been stated in the Introduction (see above p 1/2). Since the Swedish domestic scene is so uniformly quiet and the trend of her internal affairs so remarkably steady, it does not seem necessary to add much to the picture already given. But there are a few points where some elaboration might be useful.

34. a. As noted in the Introduction the SocDems have governed Sweden since 1932 and they have for decades received somewhat less than one-half of the total vote in all national elections. Normally, when a party has been in power that long, its popularity has a tendency to wane. In the last national elections, those of 1960, the SocDems, however, surprised everyone, including themselves, by gaining an even greater number of votes, and coming even nearer to the 50% mark, than ever before.

b. The elections had been fought almost exclusively over the issue of old age pensions. The SocDems, in 1959, had enacted legislation providing for a very considerable raise in such pensions, to be financed _exclusively_ by increased employers' contributions to the pension fund. The opposition parties went before the electorate with a plan under which a raise in old age pensions would have been financed not through a _compulsory_ increase in employers' contributions, but through _voluntary_ agreements between workers and employers. The SocDem 1960 election success was unanimously ascribed to the voters' desire to defend the Welfare State, which is expected to bestow benefits on the "economically weaker" classes by legislation, instead of making such benefits dependent on the outcome of worker/employer bargaining i.e., on the employers' consent.

c. It would appear that the Swedes have become so appreciative of the Welfare State that they will continue to vote the SocDems into power, although _actually_ the bourgeois opposition parties (Agrarians, Liberals, Conservatives) over the years, have tacitly accepted so much of the SocDem social reform program that by now only its secondary features are still controversial between ruling party and opposition. Indeed, Swedish politicians seem to have difficulties in finding stirring problems, any issues of substance, on which to fight their campaigns. On the eve of the Provincial and Municipal elections of 1962 (in which, incidentally, the SocDems did better than in _any_ previous Provincial/Municipal voting) a leading SocDem stated publicly: "If we had another election campaign as dull as this one, I would lose all interest in politics."

35. But what exactly is the Welfare State sponsored by the Swedish Social Democrats? First, it must be understood that Sweden's SocDems - although at one time orthodox Socialists - have given up very long ago the basic and classic Socialist concept of State ownership of the

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means of production, i.e., the idea of nationalizing the farms as well as all industrial enterprises. The SocDems, thus, are far less socialistic than the British Labor party which continues to advocate the nationalization of important branches of industry. The fact that Sweden's transportation (especially the railroads), telecommunication systems, and public utilities are mostly owned and operated by the State, or by municipalities, is due not to the Socialdemocrats but to a particular European tradition of long standing in regard to so-called "public services." This tradition is at least as pronounced in non-socialist Germany and Switzerland, for example, as in Sweden. But while the SocDems have let private ownership and enterprise continue, so that 90% of Sweden's productive apparatus is still privately owned and run, they have carried out a most comprehensive "welfare" program aimed at promoting the economic and social security of the wage earning classes. The program's more specific objectives are: full employment, a "fair" share for all in the country's wealth, and maintenance at a high level of the wage earners' purchasing power. The characteristic benefits provided are, among others, unemployment insurance, free education, near-free medical care, old age pensions, child and maternity allowances. In order to finance these social welfare measures the SocDem government has levied very high taxes which have been considered, at the same time, as a convenient means to "redistribute" the nation's wealth. The government also influences economic trends greatly by the use of its far reaching powers of control over private investment.

36. That many aspects of this "Swedish Socialism" have aroused American doubts and criticism is not surprising. More surprising, and less well known, is the fact that the SocDems themselves seem to have a feeling that they have gone very far, perhaps somewhat too far, in their welfare state program. The SocDem leaders have actually declared that the increase of old age pensions, enacted in 1959, would be their last major reform for a long time to come. More revealing, however, than such a generic declaration of intention are the tax reforms actually undertaken by the SocDems in 1962. The Government, on the one hand, reduced the income tax, for the declared purpose of providing individuals with an added incentive to take extra jobs (which would help alleviate the labor shortage prevailing in Sweden); At the same time the Government raised several indirect levies like the sales tax. When critics of this latter measure pointed out that increase of indirect taxes was diametrically opposed to Socialist principles, because such taxes put exactly the same burden on lower as on higher income groups, the SocDem Minister of Finance admitted the point. He explained, however, that "Swedish workers now receive such high pay that the old Socialist philosophy of using income taxes as a means of redistributing wealth is out of date." He added, in accordance with government plans, "the reduction of income taxes will continue." These may be straws in the wind that the SocDems have decided to go very slow in pushing their Welfare State policy beyond its present limits.

F. G. A. KRAEMER

4 October 1963

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Attached are two items on Sweden from the
New York Times. Although they appeared several
years ago they are still entirely pertinent. The
author, Werner Wiskari, who for several years
represented the New York Times in Stockholm, gives
a vivid and yet reliable account of the Swedish
scene with a natural emphasis on matters likely
to be of particular interest to a US visitor of
that country.

It is felt, moreover, that Wiskari's decidedly
un-bureaucratic writing would be a welcome relief
after perusal of the present Situation Report.

[LC]

FROM: MAGAZINE SECTION - NEW YORK TIMES

23 Oct 1960

REJOINDER TO SWEDEN'S CRITICS

The country of the 'middle way' isn't perfect, the Swedes themselves admit, but neither is it a land of 'sin, suicide, socialism and smorgasbord.'

By WERNER WISKARI

STOCKHOLM

Sin, suicide, socialism and smorgasbord - these are what a good many foreigners think Sweden is made of.

Having basked in pre-war praise, this land of the "middle way" has been disconfited by post-war barbs of criticism - especially from the United States. The facts, however, indicate that the attacks are often unfair.

Sin? "We don't sin any more than other people," a prominent banker says "but we probably sin more openly."

Suicide? Sweden's rate, though sixth-highest in the world has shown no startling increase in the past half century and no demonstrable connection with the social-welfare state.

Socialism? More than 90 per cent of industry is privately owned, although the Social Democratic Government has considerable control through its monopoly of the capital market.

And, finally, smorgasbord? You probably can find as much smorgasbord in New York's Scandinavian restaurants as you can in all of Stockholm.

But the stereotype persists, and so the Foreign Ministry's press section is resigned to hearing visiting reporters begin by asking why Sweden has such a high suicide rate and low moral standards - and isn't the welfare state to blame? Officials at the Social Affairs Ministry expect the opening question - especially from Americans - to be whether too much security doesn't sap individual initiative and make life, oh, so dull.

Occasionally an article published abroad will particularly rile the Swedes, as did an American magazine's description some years ago of a Sweden where "birth control, abortion and promiscuity - especially among the young - are regarded as inalienable rights." But cutting even more deeply was President Eisenhower's recent denunciation of a "fairly friendly European country" whose socialism had brought a sharp increase in suicides, "more than twice our drunkenness" and a "lack of moderation discernible on all sides."

Although the President did not identify his target, it was clear to the Swedes from the painfully familiar tenor of his remarks that he was striking at them. This attack by the President of a country long looked to as a friend wounded many a Swede.

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Nonetheless, among reflective Swedes at least, there is some understanding of why their country has been so frequently attacked from abroad. Part of the reason, they believe, is a feeling that a nation that has managed to stay out of war since 1814 - and especially out of World War II - has shirked its duty to mankind. Another part, they say, stems from preconceived notions about a Socialist-ruled society and an indisposition to inquire into the facts.

One American reporter arrived here a year ago for a two-week working trip and angered Swedish leaders by telling them at once that he had all the facts. All he wanted was their opinions for an article on what's wrong with the welfare state.

"It's that socialistic stigma," Erik Thor, Stockholm's tourist chief, says as he tells a story of what a difference a name makes.

Two summers ago he started what he called "a social tour," giving tourists a chance to visit a hospital, a factory, an elementary school, a day nursery, an average apartment and a home for the aged. But Americans weren't interested; many told him they didn't want any part of Sweden's "Socialist propaganda."

Last year Mr. Thor changed the English name to "life-seeing tour" and found American tourists enthusiastically buying tickets. He chuckles a bit about this, for the name in German and Swedish is still "social tour."

Still another kind of notion about Sweden was carried here by a 22-year-old Pennsylvania co-ed who rejoiced to discover that Stockholm shops sell bathing suits. She had been worried over whether she would have the courage to appear in the nude at a public beach as she thought Swedes always did. Some bathing in the nude, of course, is allowed in public here, but only if you are under 6.

Although the nude-bathing myth is readily exploded, puritanically minded Americans can easily be shocked by what they do encounter here - a completely frank attitude about sex, subject that Swedes can discuss openly and in great detail without embarrassment. Such a discussion recently proved so embarrassing to an American couple visiting relatives in Stockholm that they found it necessary to leave the living room in which their nephew was conversing with an obstetrical nurse about her work.

Swedes are taught from childhood that sex is natural and by no means a hush-hush matter. This instruction is begun in the first year of elementary school with the aim of preventing any taint of sin or dirt from being associated with the subject in children's minds. Adolescents are urged to avoid sexual relations during their formative years and are taught that such relations should be entered into only by persons who love each other and who are prepared to face the responsibility of rearing the child that might result. But premarital relations are not branded as sinful, and information on contraceptives is made available to teen-agers.

A foreigner may be shocked by some of the official statistics produced by the Swedes in their Teutonic passion for recording almost everything. Of the

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107,168 live births noted in 1957, 10,850 are listed as illegitimate and 13,628 others are recorded as having occurred within five months of the wedding day.

But before anyone starts casting stones, this question is raised here: What are the comparable American figures? It is easy, Swedes argue, to find fault with a homogeneous nation of 7,500,000 population that keeps unusually complete statistics, especially if the fault-finders cannot readily produce comparable figures in each case - as, for example, the number of children born in the United States within the first five months of marriage.

From the Archbishop of Uppsala, primate of the State Luthern Church, on down, there is general agreement here that moral standards in Sweden are just as high as elsewhere. Many Swedes, whose impressions of the United States are colored by the Kinsey reports and by wife-swapping tales of suburbia, are convinced that behind the American facade of hush-hush there lurks a concentration on sex that is unhealthy because of its furtiveness.

While Swedes defend their moral standards, they freely admit that their Church is weak. In fact, says Prof. Herbert Tingsten, the inconoclastic former editor of the nation's leading paper, Dagens Nyheter, "Sweden is the least religious country in all Christendom." Another intellectual suggests that Swedes on the whole have substituted "the care of humanity" for religion.

Religious leaders protest against such statements. But State Church figures show that only a little more than 3 per cent of the nearly 7,000,000 officially listed as members attend divine services. Some comfort, however, is taken in the fact that most Swedes are still christened and are married and buried by the Church.

Perhaps, some here say, the feebleness of Sweden's religious life is one reason for the nation's high suicide rate, which in 1957 was 19.9 per 100,000 inhabitants.

Perhaps, say a few Swedish psychiatrists and sociologists, the welfare state so softens some individuals with security that an unforeseen catastrophe proves too much for them. Nonsense, say other Swedish psychiatrists and sociologists, pointing to the fact that neighboring Norway has a social-welfare state that in some respects goes further than Sweden's, but a suicide rate of only 7.4 or less than half the Swedish figure.

All that is clear is that no one has more than speculation to offer in explanation of why Sweden, with the highest standard of living in Europe and a far-reaching social security system, should also have so many suicides. No comprehensive study of the question has been made. (It appears, however, that the Eisenhower remarks may have the effect of finally getting such research started.)

In any case, to those foreigners who tend to connect the word "suicide" with Sweden, it may come as a surprise to find that four other European nations have even higher rates - Austria with 23.9, Denmark with 22.5, Finland with 21.9 and

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Switzerland with 21.6. Japan tops them all with a 1957 rate of 24 per 100,000 inhabitants.

If the link between security and suicide is questionable, can the benefits of
the welfare state be said at least to corrode individual initiative? Yes, says
Jari Hjalmarson leader, of the opposition Conservative party, which represents
big business. But the attitude of the vast majority of Swedes is expressed by
Arne Geijer, head of the Confederation of Trade Unions, who says it is his feel-
ing that Swedish workers, far from having lost initiative, actually work harder
than Americans.

He asserts that there is hustle here because of the piece-work system under which some 70 per cent of the labor force is paid, and because of the worker's own realization that they must remain competitive, inasmuch as 25 per cent of all Swedish commodities are sold abroad.

Many foreigners living in Sweden, however, are convinced that Swedes are
tropically slow and inefficient. This impression derives from dealings with
the service industries and stores. There is a labor shortage, and the best
workers, Swedish business men point out, have been snapped up by the higher-
paying manufacturers.

More Swedes would agree that high taxes may "hamper initiative" than would subscribe to any blame of "too much security." But it is significant that the opposition Conservatives, Liberals and agrarian Center party have not been able to capitalize on taxes as an argument to induce the people to turn against the ruling Socialists, who have dominated Sweden for twenty-eight years (except for one three-month interval).

In last month's election, the Conservatives, campaigning on the slogan "The
future on your own feet," vowed to cut taxes and to repeal what the Social
Democrats have labeled as their last major social reform for the foreseeable
future. That is a new employer-financed supplementary pension system, which
will raise retirement income from perhaps one-fifth of a person's best earn-
ings to about two-thirds.

Apparently interpreted as a frontal attack on the entire welfare state, the
campaign brought voters to the polls in record numbers. The result was a stum-
ning setback for the Conservatives and the greatest vote of confidence for
Premier Tage Erlander's Socialists in two decades.

Thus the Swedes elected to remain among the most heavily taxed of human beings. An unmarried worker making the average wage of $52 for a forty-five-hour work week, for example, finds that a lump sum of $14.40 is withheld from his pay. This represents both national and local income taxes, his compulsory health-insurance fee and his contribution to his basic old-age pension.

A married worker, regardless of the number of his children, finds $10.80 with-held. (Instead of granting a tax deduction to the father, the state pays an

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allowance of $90 a year for each child directly to the mother, in the hope
that there thus will be a better chance of the youngsters' benefiting.)

The main bill that tax money goes to pay is, of course, the cost of the wel-
fare state. In 1958, when it totaled $1,323,400,000 or 14 per cent of the net
national income, the national Government paid nearly half, and local govern-
ments nearly three-tenths. The rest was covered by individual and employer
contributions to various insurance funds.

Just what is the welfare state? Besides child allowances and pensions for
the aged, it means maternity benefits, pensions for widows, orphans and invalids,
free care in hospital wards, payment of half the cost of medicines over 60 cents
and three-fourths of doctors' fees. It means free school lunches and books and
university tuition, rent rebates for large families, special allowances to help
relocate the unemployed and a host of other benefits.

It's what Premier Erlander has in mind when he talks of the "public sector" that his Government intends to continue gradually to enlarge, for he believes that expanding "security for the old, the sick and the jobless and education opportunities for the young" is the best way of helping all to "stand on their own feet."

The Swedish way of life - the social-welfare state, a preponderance of private enterprise with the Government moving into areas where others cannot or will not act, a foreign policy of trying to stay out of trouble by avoiding alignment with any power bloc - clearly fits the desires of the Swedish people for a secure existence in which change, if it must come, is glacial.

How clearly this is so is indicated not only by the latest election but also
by a poll conducted by the Gallup-affiliated Swedish Institute of Opinion Re-
search on whether President Eisenhower was right about Sweden. Eighty per cent
of those questioned, including members of all Swedish political parties, said he
was dead wrong. (Only 3 per cent agreed with the President, while most of the
17 per cent with no opinion had never heard of his remarks.)

The Swedes do not claim, however, to have fashioned a paradise without problems - juvenile delinquency, crime, drunkenness or sin in general. They are not proud, for example, of the young punks who occasionally molest women in midtown Stockholm even in midafternoon - any more than Americans are proud of the muggers who prowl at night in New York's parks.

But the Swedes do not regard the muggers as a product of either Republican or Democratic administration, and they resent any American suggestions that Swedish sins are a result of Swedish socialism.

The Swedes feel that the pendulum has now swung to another extreme from that of the Nineteen Thirties, when, in the words of Professor Ohlin, "wild exagerations" were written about Sweden as "a heaven" on an earth shrouded with disillusionment. Many Swedes acknowledge - with some expression of guilt -

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that their progress has been spurred by the rare advantage of nearly a century
and a half of peace in which their geographical position has played a major part.

In some almost incredible way, the Swedes seem continually to wind up profitably
in the middle. During the Great Depression, for example, they suffered consider-
ably less than other European nations, for demand for their rich resources of
iron ore and timber enabled them to make a quicker recovery.

In recent times, the Swedes had fewer problems than their Nordic neighbors
in joining the European Free Trade Association. It just happens that the
Swedes, on the whole, sell their raw materials, on which tariffs are minimal,
to members of the rival Common Market, and their higher-tariff manufactured
goods within the free-trade area.

On the post-war political front, the Swedes refused to join the North Atlantic
Treaty Organization out of fear that doing so might bring Soviet occupation of
neighboring Finland. (Many Finns observe privately that the Swedes were moti-
vated less by a concern over their neighbor's fate than by fear of losing their
buffer against the Russians.)

Although they consider themselves culturally a part of the West, the Swedes
occupy a political position of Olympian detachment from which their Foreign
Minister, Osten Unden, alternately spanks the Russians and the Americans. The
fact that Sweden in turn draws criticism from both sides is interpreted as a
practical demonstration of how ideologically Swedes are in the middle.

Thus, Mme. Ulla Lindstrom, Minister Without Portfolio in the Erlander Govern-
ment, noted with satisfaction in a recent speech that the same high suicide rate
that President Eisenhower had alluded to in warning American voters of the
perils of socialism was subsequently denounced in a Soviet publication as proof
of Sweden's "capitalistic rottenness."

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