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Beyond the Myth: The Challenges Facing the Nordic Model

Northern Europe includes Denmark on the Jutland Peninsula, Norway and Sweden on the Scandinavian Peninsula, as well as five countries including Finland and Iceland. It also includes the Danish affiliated territories of the Faroe Islands and Greenland, and the Åland Islands belonging to Finland. and Svalbard, an archipelago belonging to Norway. After World War II, Northern Europe gradually became a “mythical existence” – economically developed, superior in welfare, political stability, and social harmony, making it a “top student” in global development. The “Nordic model” once became a very attractive development model around the world.
Superior economic location and excellent natural endowments

In fact, the development and prosperity of Northern Europe is largely due to its natural conditions.

First, the economic location of the five Nordic countries is very advantageous. Because they are located on peninsulas, quasi-peninsulas and islands in northwestern Europe, they can not only enjoy the spillover and radiation effects of the Western European economy, but also avoid to a certain extent the continued consumption of conflicts between major powers. Second, the five Nordic countries are all small countries with vast territories and sparsely populated areas. Sweden, the most populous country, has only 10.3 million people, with a population density of 24.6 people per square kilometer. Denmark, which has the highest population density, has 136.5 people per square kilometer, but has a population of only 5.84 million. Finland has a population of 5.539 million, Norway has a population of 5.534 million, and Iceland, the least populous, has only 370,000 people, with a population density of 3.4 people per square kilometer. Third, the five Nordic countries have a mild climate. Although they all belong to high latitudes, due to the effect of the North Atlantic Warm Current, Northern Europe has warm and humid areas suitable for human habitation. Fourth, the five Nordic countries have excellent natural endowments and are rich in fishery, forestry and mineral resources. Norway and Denmark are also the main developers of North Sea oil. Norway is the world’s third largest crude oil exporter and Europe’s largest natural gas producer. Obviously, talking about the success of the “Nordic model” without these conditions belongs to the creation of “myths”. Moreover, Northern Europe has actually undergone profound changes since the end of the Cold War. The Ukraine crisis has accelerated this change, and the “Norse mythology” is coming to an end.
Abandon the policy of non-aligned neutrality

An important prerequisite for the formation of “Norse mythology” is that Europe continued to maintain peace and stability after World War II. The five Nordic countries are located in the northwest corner of Europe. In modern times, they have been trying to stay away from the disputes between the great powers. Although this national policy did not completely shield them from the two world wars, the damage suffered was much less than that of other European countries. After the end of World War II, Denmark, Norway and Iceland became founding members of NATO, while Sweden and Finland, which were closer to the Soviet Union, pursued a policy of military non-alignment and maintained neutral status to avoid becoming outposts in the confrontation between the United States and the Soviet Union. After the Ukrainian crisis fully escalated in 2022, Finland and Sweden applied to join NATO. Although there have been some setbacks due to the obstruction of Turkey, Hungary and other countries, Finland has officially joined NATO on April 4, 2023, and Sweden’s accession process is also accelerating. As Turkey completed the approval of Sweden’s accession to NATO on January 25 this year, After all the procedures, Hungary is the only NATO member that has not ratified Sweden’s accession to the treaty. Finland and Sweden chose to join NATO during the Ukraine crisis, not so much because they were afraid of Russia, but because they were no longer afraid of Russia and took advantage of the Ukraine crisis to change their historical neutrality policies and fully integrate into the leadership of the United States. of the Western camp.

Historically, Sweden and Finland’s insistence on neutrality was a helpless and even humiliating choice. Sweden was once a Baltic power. It declined due to its complete defeat in the “Northern War” for hegemony with Tsarist Russia from 1700 to 1721, and turned to pursue a non-aligned neutrality policy. During the two world wars, Sweden always walked a tightrope between being pro-German and pro-British and pro-French. It not only protected the country from the ravages of war, but also made a lot of money from the war. It can be said that it benefited greatly from the policy of neutrality. In contrast, Finland’s neutrality has a history of humiliation. From November 1939 to March 1940, Finland and the Soviet Union fought a brutal “Winter War”. The Soviet Union captured the Karelia region, including Vyborg, Finland’s second largest city, at the cost of one million casualties. In June 1941, Finland collaborated with Nazi Germany to retake the occupied territories, but never recognized its alliance with Germany. This “neutral” policy left Finland with a lot of room for maneuver. In February 1944, Finland decided to “rebellion” after seeing that the Soviet Union’s victory was determined, so that it did not become a defeated country together with Germany. Basikivi and Kikkonen, who governed Finland during and after the war, established the “Basikivi-Kikkonen line” of strict neutrality for the country’s diplomacy. Obviously, both Sweden and Finland have historical grudges with Russia. They did not join NATO immediately after the war because they did not want to become the front line in the confrontation between the United States and the Soviet Union.

After the end of the Cold War, Sweden and Finland joined the EU in 1995, and their cooperation with NATO has also increased. In fact, they have long since abandoned their non-alignment policy. However, against the background of NATO’s continuous eastward expansion, the two countries still choose to stay outside NATO. After the Ukrainian crisis escalated, Sweden and Finland uncharacteristically actively participated in NATO operations and provided military assistance to Ukraine. Among them, Finland, which has a 1,200-kilometer border with Russia, actively provides assistance to Ukraine. As of February this year, Finland has provided 22 batches of military aid to Ukraine, donating military equipment worth billions of dollars including F-16 fighter jets. On December 13, 2023, Ukrainian President Zelensky went to Oslo, Norway, to attend the second Ukraine-Nordic Summit. The five Nordic countries pledged to provide Ukraine with billions of dollars in aid and military equipment. Made in the context of military aid. The Nordic countries dare to make such a hawkish posture towards Russia, not so much because they believe that NATO will provide them with security guarantees, but because they conclude that Russia is not capable or even willing to go to war with them. Sure enough, Russia’s response to Finland’s joining NATO was only to emphasize that this move would have a “negative impact” on Russia-Finland relations, and the main response was to establish the “Leningrad Military District.”

There is no evidence that Sweden and Finland’s abandonment of their neutrality was the result of pressure from outside forces. For them, remaining neutral in Western collective actions is an independent foreign policy, and this may bring higher risks than actively squeezing Russia. Finland and Sweden should have settled this debt. At the level of “Norse mythology”, the Nordic countries’ aggressive aid to Ukraine has changed their image of adhering to the bottom line of peace after World War II, and the erosion of their soft power cannot be underestimated.

The deep crisis of the welfare state

Nordic countries are the most typical welfare states in the West. The commonality is that the state provides all residents with comprehensive welfare care “from cradle to grave” through high taxes, covering fertility, children, education, employment, work-related injuries, unemployment, pensions, housing, Medical, funeral, etc. The “Nordic model” of the welfare state is characterized by comprehensive coverage, high level, large proportion of social services, and relatively small personal burden. Therefore, Northern Europe was once considered to be the region with the highest happiness index in the world. The Gini index, which measures the gap between rich and poor, is between 0.2 and 0.26, ranking among the lowest levels in the world. However, even for developed economies like the Nordic countries, which are small countries with few people and abundant endowments, it is not easy to maintain this high-tax-high-welfare model. After the end of the Cold War, the Nordic countries also successively launched “neoliberal reforms”, following the example of the United Kingdom and the United States in promoting the privatization of state-owned enterprises, controlling the growth of public welfare, and market-oriented social welfare. After decades of reforms, the basic structure of the Nordic welfare state has not changed, but the social model still has some “British and American model” characteristics.

On the surface, the pressure for reform in the Nordic countries comes mainly from financial difficulties. As the region with the highest proportion of public expenditure in Europe, after decades of cuts, the five Nordic countries’ current public expenditure accounts for about 50% of gross domestic product (GDP), which is higher than the EU average (46.3%). Among them, the highest Norway reaches 63%. Since more than 80% of government expenditures are spent on social welfare, many people believe that high taxes caused by high welfare have restricted Nordic labor enthusiasm and international competitiveness. This is certainly not wrong, but in fact the export-oriented economic structure of the Nordic countries is the underlying reason that challenges the fiscal sustainability of the welfare state. There has been a popular saying in the outside world – “The world economy has a cold, and the Nordic economy has a fever.” Affected by the international financial crisis, the GDP of Sweden, Denmark, Finland, Norway and Iceland shrank by 5.2%, 4.9%, 8.3%, 1.7% and 6.8% respectively in 2009. Iceland became the first country to fall into a sovereign debt crisis. In this case, rigid welfare expenditure standards will inevitably exacerbate financial difficulties. After the Ukrainian crisis escalated in an all-round way, the “Nordic model” faced another wave of serious challenges. The five Nordic countries were all troubled by low growth and high inflation. According to EU statistics, Sweden’s GDP will grow by 2.9% year-on-year in 2022, Finland’s growth will be 1.6%, and Denmark’s growth will be 2.7%, all lower than the EU average of 3.4%. Norway and Iceland, which have not joined the EU, are in a better situation, but they also have structural problems. It can be seen that the model of a small country with a small population on which the “Norse Mythology” relies is inevitably highly dependent on external factors, and external fluctuations will inevitably require increased flexibility in high welfare.

Nordic welfare states also face the challenge of ethnic diversity. Fundamentally speaking, the high welfare of Nordic countries is a government-operated system in which citizens take care of each other, and the basis of their identity is that the citizens are of the same race, race, and faith. After the 1980s, the number of immigrants from Nordic countries continued to increase. According to statistics, Sweden’s immigrant population accounted for 19.8% of the total population in 2020, Iceland’s 15.2%, Norway’s 14%, Denmark’s 11%, and Finland’s 6.4%. The situation of mutual disidentification between foreign immigrants and the local residents of Northern Europe is widespread, which has caused considerable erosion to the social foundation of the welfare state. Swedish Immigration Minister Stenlgaard believes that the sudden increase in the number of immigrants in recent years, coupled with poor social integration, has led to prominent social exclusion in Sweden. Currently, anti-immigration far-right thoughts are growing in the Nordic countries. Many people believe that immigrants have threatened the country’s traditional culture, values ​​and social order, which is tantamount to the Nordic welfare state system that aims at a harmonious society. Take the fire out of the cauldron.
The pendulum of consensus politics swings right

After World War II, Nordic countries generally established a consensus political structure dominated by center-left social democratic parties. They advocated social equality, social solidarity and the welfare state in terms of values, and long-term implemented Keynesian policies of high employment, high taxes, and high expenditures. After the end of the Cold War, social democratic ideology was comprehensively suppressed by British and American neoliberalism, and the influence of the Nordic center-right parties increased significantly. In recent years, the Nordic far-right has been on the rise, and most countries have the far-right participating in the governing coalition. Ideologically speaking, in the post-Cold War era, the Nordic countries have all experienced a transformation process from “social democracy” to “liberal democracy” and then to “national democracy.”

The five Nordic countries all implement a proportional representation electoral system, which makes it difficult for one party to dominate the majority of seats in the parliament. The ruling party usually needs to form a coalition government with other parties to come to power. If this multi-party cooperation system wants to maintain political stability, it must form a political consensus. Its advantage is that it helps ensure that different interest groups and social classes have the opportunity to participate in politics, forming a relatively stable and moderate political atmosphere. Its disadvantage is that it easily gives radical parties the opportunity to participate in politics, and the political opinions of the far right are more likely to be transformed into government decisions. In October 2022, Kristersson of the Swedish right-wing moderate party came to power. He was the Swedish Prime Minister elected with the lowest vote rate in the parliament since 1978 (176 votes in favor and 173 votes against). In order to maintain his position in power, Kristersson chose to form a coalition government with the far-right Sweden Democrats. Although the far right did not get a government position, the coalition government had to compromise with the party on immigration issues, drastically reducing the annual refugee quota from 6,400 to 900, while planning to deport immigrants who misbehave.

As the political consensus shifts to the right, even if the center-left party is in power, the political views of the center-right and even the far-right may still exert considerable influence. Since June 2019, Frederiksen from the center-left Social Democratic Party has been the Prime Minister of Denmark. In the 2022 parliamentary election, her Social Democratic Party won 90 seats, while the right-wing and far-right alliance won 73 seats. In the end, the Social Democratic Party, the Liberal Party and the Moderate Party formed a new coalition government. In this election, the far-right Danish People’s Party only received 2.6% of the votes, but the party’s anti-immigration ideas still had a great influence on the Danish government.

The right-wing swing of consensus politics in the Nordic countries has eroded the Nordic political myth of humanity, equality, and harmony established after World War II. First, criticizing globalization is no longer a political taboo. Danish Prime Minister Frederiksen emphasized during the 2019 election campaign, “It is increasingly clear to me that uncontrolled globalization, mass immigration and worker freedom The price of mobility is paid by the grassroots class”, so Denmark has to implement strict immigration access policies. The second is the rise of radical forces. On September 3, 2023, an anti-Muslim protester publicly burned the Quran in Malmö, Sweden’s third largest city, triggering violent riots and causing tension in relations between Sweden and Middle Eastern countries including Turkey. . According to Agence France-Presse, nearly half of the population of Malmö is immigrants or comes from immigrant families, and “shootings and bombings occur almost every day” there, which has disturbed many locals. Third, welfare state reform is becoming increasingly radical. Among the five Nordic countries, Sweden has undergone the most intensive welfare state reform. It has already faced challenges such as declining public medical service levels, shortages of medical staff, and uneven distribution of medical resources. In order to save financial expenses, the Swedish government has also taken measures to abolish some police stations and reduce police forces, further increasing the risk to social security.

The “Nordic mythology” formed after World War II is facing comprehensive economic, social, and political challenges. This certainly does not mean that the Nordic countries will move towards economic decline, social unrest, and political crisis, but it can remind people to pay more attention to the “top students” in the international community. “The objective conditions upon which existence depends. Every country should choose the path to modernization based on its own national conditions. The experience of other countries can be used as a reference, but it must not become a golden rule. In terms of the connotation of Chinese-style modernization, including high-quality development, common prosperity, and harmonious coexistence between man and nature, the Nordic countries have some experiences worthy of reference. Perhaps, breaking the “Norse myth” will help us better learn from the “Nordic experience”.

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