Money v. Principles: Sweden Turns Its Back on Saudi Arabia, Cancels Defense Deal

It’s not often one has the chance to write this sentence and have it actually be true: What a fascinating few months it’s been in Swedish foreign policy!

In the opening months of the country’s new leftist government, Swedenbecame the first in Europe to recognize the state of Palestine, leading Israel to withdraw its ambassador in protest, and Sweden’s military carried out a frantic hunt for what in all likelihood was a Russian submarine lurking outside Stockholm. The country is now embroiled in a diplomatic standoff with Saudi Arabia after cancelling an arms deal worth hundreds of millions of dollars. Riyadh has now also withdrawn its ambassador and joined the Israelis in venting a hollow kind of indignation over Sweden’s decisions.

Sweden Turns Japanese

 

Paul Krugman

 

Three years ago Sweden was widely regarded as a role model in how to deal with a global crisis. The nation’s exports were hit hard by slumping world trade but snapped back; its well-regulated banks rode out the financial storm; its strong social insurance programs supported consumer demand; and unlike much of Europe, it still had its own currency, giving it much-needed flexibility. By mid-2010 output was surging, and unemployment was falling fast. Sweden, declared The Washington Post, was “the rock star of the recovery.”