An evening with Goran Persson

Thank you, Michael. Thank you for giving me this opportunity to address such a distinguished audience. I will reflect upon the Swedish experiences from our crisis because it was our crisis. We designed it on our own and we created it on our own. And we were, if not alone internationally at that time, so we were not so many countries experiencing that type of problem. It was Sweden, it was Canada, it was Finland. Perhaps a couple more. Today, it's a different picture. Many countries have the same problem as UK. We must remember that. And it is obvious how it is linked to the international crisis. But it is also obvious that the international crisis has come to a turning point. The worst is behind. And probably we will stand in front of a quite long period of economic growth. When we started in Sweden, we had the year before I became Minister of Finance a deficit around 13-14% of GDP. I started with 12.something. We had a debt that doubled under a few years. And it is easy to double the debt, I can assure you. And it is extremely painful to halve it again, I can assure you. The problem is that the debt service is not often regarded among the electorate as a real expenditure. That's a problem. Because it is a real expenditure. And what is ahead of us just now is a completely different story compared to the Swedish. I could take responsibility for our program in a time when I had lower interest rates as a reward. Constantly lower and lower interest rates because we started with a 10-year bond that was 450 basis points above the German one because of lack of credibility for our ability to handle the public finances. And when we started our program gaining results, we were rewarded by lower interest rates. So the fiscal contraction was balanced by a monetary stimulus. That is important to remember. What you have ahead of you is higher interest rates. Not only you, the rest of the world as well. It's globalized nowadays and you will follow even if you have an independent central bank, you will follow Frankfurt and the others when they go for higher interest rates. The problem ahead of us in Europe, in UK, in US, in many countries is that unemployment is still rising. So this autumn and next spring will be a fight between governments and central bankers about the right time to go for higher interest rates. In Frankfurt, defending the new currency, they have to stick to price stability. It's a part of their way building credibility. I'm convinced they will start raising the interest rate quite soon. But in the other corner, you will have 12, 13, 14 European governments constantly claiming, 'Don't do it because unemployment is still on its way up.' On top of this, doing reinforcement of public finances, reducing expenditure, and also increasing taxes. It is a risky process, of course. But on the other hand, not doing it is probably even more dangerous. That was my choice, so to say, when I became Minister of Finance. I knew going for a program of this kind will not be popular. And everyone who have met a politician know one thing. Being elected is not enough. That is not the masterpiece. It's being reelected. And I had to ask myself and my colleagues in the leadership of the party, 'What is the forecast being reelected four years from now if we don't take action? Zero. What is the probability of being reelected if we go for a reinforcement program? Very small, but good chances. What did we prefer? Yes. Put our jobs and offices at stake. Perhaps losing them. But after having done the right thing. To lose your position after having done nothing is humiliating. So we did it. My idea was don't wait. Don't confuse things. Because it doesn't take a genius to realize what the problem is. If you have a deficit of as we had 12-13%, to reduce that takes both cuts and tax increases. Nothing is popular in the electorate of that. But don't pretend that there are other ways to go. The difficult thing is not to see what to do. The difficult thing is to do it. That goes for your own private economy. That goes for a small company. That goes for my farm, I can assure you. And that goes also for a national budget. The difficult thing is to do it. It's a pure political task. It's a pure political process. Of course, there are different options underway, so to say. But if you don't want to take the risk, if you're not prepared to put your office at stake, you can never do anything to solve the problem. You have to take the risk. So, we went away. The first thing I said was a low deficit is a prerequisite for economic growth. Sometimes, that discussion is also confused because many think it is possible in the long run to combine a deficit with economic growth. It is for a while, but sooner or later, a deficit turns out into a debt. A debt turns out into lack of confidence on the market, and that turns out into higher interest rates. Higher interest rates will put pressure on investment, and investment will put pressure downwards on economic growth. Our economies work best when inflation is low, when interest rates are low, when deficit is under control, and when debt is manageable. The so-called Maastricht criteria are a good summary of good economic performance. There will be no sustainable economic growth without public finances in order. Then I also want to add because we have seen that in the Baltic states, we could also have taken the Swedish case from the '80s. Yes, we had a quite good surplus in our public finances, but that was because of consumption that the private households had borrowed money to be able to maintain. And the current account was disastrous. I often say that current account is underestimated and neglected when we discuss a nation's economic situation. You can't go on with a deficit in current account forever. Also, that will punish you sooner or later. Look for instance on the three, four cases just now, the Baltic states with a tremendous economic growth rate for a couple of years. Also, good public financial situation. Latvia was extremely close qualifying for membership in the Euro group. A year later, they collapsed. Everything was built on borrowed money to the households, and they started a boom and bust created quite big tax revenues. So, also from that perspective, we must be prudent. Current account must be under control. And still, that problem is not approached during this financial crisis. If you look upon the imbalances in world economy, it is quite frightening. Not least the relation China-US current account, the oil producing countries and those who are consuming. It is a disastrous situation not yet addressed. We decided to go for a program. And I tried to convince everyone I met that this was also a prerequisite for political strength. Because I was as newly appointed Minister of Finance given the task to travel abroad to borrow money to finance the deficit in the Swedish public finances. I remember the first time I came to London as Minister of Finance and met with the young sneering boys sitting there, 27, 28 years. Went to Wall Street. Met the same group. Went to Paris. Little bit more polite, but nevertheless, the same group. And I realized they decided literally about how much we could go on with our public expenditures. I had the task to tell them about our reinforcement program and I knew if I was skillful enough, they could lend me money. If I was not so skillful, they nevertheless should lend me money. But it would be extremely expensive. I said to my Prime Minister at that time, 'This is humiliating. This is dangerous. If we go on like this, in the end people have no reason to vote for us at all because others are deciding about our future.' And I said, 'Those who are in debt are not free.' That is something that poor people always have recognized. No, it was a rich state, a rich country by a mismanagement of public finances that were in debt and not free. We had to ask others. And I will never forget when a young American asked me about our unemployment benefits and told me wasn't that a little bit too generous. And I was almost telling him that it's none of your business, but I suddenly realized it was. That was the problem. Then, after having realized this, we started with our program. And the first and most perhaps most important thing was to say that if we fail, we will resign. It is so important. So, we are prepared to put our offices at stake. That was easy to say, but because it was obvious. If we had failed, we should have been forced to resign. So, why not turn it around and say it the other way. We are prepared to resign if we fail with this task. That sent also a signal that was important. There were persons that were responsible for a program. You could identify them. And I was the main target. It was not pleasant, I can tell you. As long as we talked about restoring public finances, it was quite easy to have support. And the discussion and decision period then follows with a lag of an implementation period. And then it is for real. Lower pensions, lower unemployment benefits, lower child care resources, everything, literally everything. Then they started to mobilize. Because in the beginning, we were not rewarded by the market with lower interest rates. And my own party even decided to go for extra party conference with the aim to replace me. That was obvious. 2,300 different amendments was sent in to the party conference just to destroy the whole program. You can imagine. But it took a year according to the regulation and the statute of the party to call an extra party conference. And during that year, the program started to work. And when the party conference gathered, the situation was completely different. Instead of replacing me, they elected me as party leader and appointed me as prime minister. Tells you something about timing. And how difficult politics is. No, be prepared to put your office at stake. That is necessary to say. Then set up goals. That was something we hadn't planned from the beginning. But I was inspired by the success in monetary policy. Setting up inflation targets, communicating them, sticking to them, taking measures to live up to them. It was quite impressive. Couldn't we do the same thing for fiscal policy? Yes, perhaps. And we decided 96, we took office 94, 96 we shall have stabilized our debt. 97, we must have a deficit on a 3% level. And 98, we shall have a surplus in public finances. We reached the goals. But it was not by chance or by luck, it was because of hard work. The business cycle was against us during 96. Could have been easier then to blame the business cycle and say sorry, it was not possible to reach the goal because of the business cycle is going down, you must all understand this is not possible to do. Instead of that, we went to the parliament with even harsher measures. That was painful and that was the tipping point. Because after that, the interest rates began sharply to fall. So, stick to your goals. Set your goals. Set goals that is possible to reach, but difficult to reach. Then you are credible. Because in the end, a lot of this type of restructuring would be a question of communication. Remember I said it's a pure political issue. You must be able constantly to communicate. And you must be able constantly to explain what you are doing. Message discipline. For us, it was also important to say, 'Don't let vested interests protect their part of the public finances.' You don't have any interests of that kind in UK, I'm convinced. But in Sweden, they were present, I can assure you. So, therefore, we started the debate from another perspective. Not about the measures, about the level of reinforcement that was necessary to agree upon. Forcing all political forces to have an opinion. Is it a 10% reinforcement program we need? Or is it 8%? Or is it 11? Or is it 7? And that was a macroeconomic discussion. It was quite easy to unite upon. It's around 10%. Having that decision and a broad majority behind, then it was time to present the package. 10% means a package of this kind. And then they said, 'Oh, this is not possible.' Okay, I accept this is not possible, but what do you have instead? Because we have agreed this is the level to go ahead with. That worked. If you don't have a package, a comprehensive package, you will be open for attacks from every vested interest. Now you could meet every interest telling them, 'You are not alone.' Look up on the disabled. Look up on the unemployed. Look up on our foreign relations activities, and not least the Ministry of Foreign Affairs and all the embassies. Also they have had a quite harsh package to swallow. That was the ultimate proof. If you don't have a package, you will be constantly open for attacks from vested interests. Then it was necessary to have a fair distribution. In our political tradition with a turnout of sometimes 90% and with quite big groups in society dependent on the welfare sector, for instance, it is necessary to have a fair distribution. In a country with 50% turnout and where the richest are going to the polling station, it is perhaps not necessary. But in our political tradition, it was. So, we had also to present a package of taxes. Those who are better off are not always those who are hurt by reductions in pensions, the public pension system, or unemployment schemes, or what you want. So, there was also a need for tax increases. 50/50 was our proportions. And I spoke with my Canadian friend. And Canada has been a partner for Sweden in this fight for public finances for many many years. We started the same year. And she told me that the year before they started their consolidation program, they had their tax increases. So, if you add '93 with '94, and so on, in Canada, they might also have a ratio between taxes and cuts that is not the Swedish, of course, but more close to it than if you just take the reinforcement program. I don't think it's possible in any democracy to do this without also using the tax instrument. I don't think so. A fair distribution. Then, it was tempting for many to solve the public financial problem that the state had. And for us, with our decentralized responsibility for the welfare sector, the school system, the care of the elderly, the health care, everything is on the local level with the right to tax for the local authorities. It's a decentralized system. So, the state finances, so the public finances connected with the government could easily be solved if you just push the problem to the next level. But, that was not possible to do. That was a constant fight during the whole process to see to that the activities in school and health care not were hurt too much. They also had problems, of course, but it was necessary to see to. Never solve your problem giving it away to another authority to handle. You have to take care of the problem you created yourself. And we tried to do so. Quite successful, but not completely successful. Then, we also said that when you communicate, you must be very disciplined and honest. No bookkeeping tricks. The idea was that I as Minister of Finance should be able to sit in TV explaining everything we did. And never ever lying. Always being completely honest. Always being open about the calculations and the assumptions. How do we calculate this public expenditure program? On which factors is it built? Because if you are honest there, there are no escape ways for yourself, and there is a credibility dimension in it that should not be underestimated. We also said, 'Never ever belittle the small sums.' Remember that a billion starts with a million. And a million starts with 100,000, and 100,000 starts with 10,000, and so on. Because they who I am directing myself to, they don't understand what a billion is. They don't do that. It's difficult even for me to see it in front of me. So, if we start mismanaging the small sums, we lose all credibility. You shall be extremely careful about your own expenditures. Extremely careful and prudent. There was one trick I used. It was not a trick, but close to it. And that was always being extremely conservative about the forecast for economic growth. Extremely conservative. Because it's not a problem to solve the public financial situation if you are over-optimistic about economic growth. Then it solves itself. It's not a problem. Put into a calculation 5% annual growth during 5 years and be careful about your expenditures and you will see you solve the problem. But that is not realistic. I did it the other way around. If we thought that there were good reasons to believe in 2.8, then we said we calculate with 2.5 or 2.3. And no one ever attacked us for that. I have often reflected upon that because it was so strange having a government constantly underestimating the growth performance. The opposite is the usual behavior. When the government presents their budget bill, it is based on quite optimistic calculations. Here we had a government doing the opposite. And in the end of the year, it was not 2.3. It was 2.9 or even sometime 3.1. And that 0.8 gave a tremendous leverage in the public finances. And I managed to do so almost for 8 years. And that was not bad, I can tell you. I didn't lie. I was just cautious. I was careful. I was a little bit conservative according calculations. That is important. We also said that this is an opportunity for structural reforms. But don't confuse budget consolidation with structural reforms. Tell the right story, so to say. If you want to reduce unemployment benefits because they are too generous, that is not because of budget reasons or fiscal reasons. It is because of structural reasons. You need to create a better system. Do so. And use the right argument. Otherwise, you will not be believed. The structure reform that was most important have not yet began to work. And that was a new pension system. It is starting to work now. And if I look around in Europe, I can see many many countries with a very bad economic situation, huge public deficits, and pension systems that are not reformed. Pension systems that will be almost impossible to attack. Because when we reform pension systems today in Europe, that means that we make them a little bit less generous. That is what the word reform means in that context. Let's be honest. But soon you will have a situation in many European countries, not least in Southern Europe, where at least 50% of the electorate will be 50 years or older. And then to go for a reform of the pension system, that will be extremely difficult. Vote for me and I will reduce your pension. I don't think that will work. So, we managed in a bipartisan agreement between right and left agree upon a new pension system. Now, it starts to work in Sweden. Next year, automatically, the pensions in Sweden will be reduced. It's not the level of indexation. No, they will be reduced. They will be lower next year compared with this year. And that goes for everyone. That is the new system. Connected to the economic development. And I said once when I gave a lecture in New Zealand that I think that we will not be so popular this system than people realize what we have designed. Now, it's up for a test. So, those who have not yet started a discussion about the pension system, you have a huge problem ahead of you. And I used to say that I believe that the European tax rate will converge. Roughly somewhere around 45 plus minus 2.

In many states, many nations where they have a pension system that is not reformed, the only possibility to maintain the pensions is to use taxes. If they are right who say that the graying population also will demand more of health care. I'm not sure that they are right, but those who are experts claim that. If that is right, then we have a troublesome situation. In that period, we shall reduce our deficits and create a debt that is under control. It's not easy. Structural reforms, yes, it's a golden opportunity. A new pension system, a new budget system. We had the laxest budget system in the whole European Union. That was perhaps one of the explanations for our situation. We created the opposite, the most disciplined. And it works. And we created also almost a competition between the government and the opposition, who is the best caretaker of the public finances. That is not a bad outcome of a process of this kind. So, still you can see, if you look up on the public financial situation, even in this deep economic crisis, Sweden has roughly deficit of 2.53 and debt that is not growing. It is stable compared year to year. But nevertheless, we have been able to expand our automatic stabilizers because of strong public finances. That is also a lesson learned. I'm not against deficits. Of course not. If they are used for investments with a safe and quite quick return, it's okay. You need to do that sometimes. I'm not afraid of a deficit that is used for stimulating in a downturn in the business cycle. But if you go for that type of policy, you must also be able to create a surplus in the good business cycle. And that was our earlier mistake. We always were world champions combating the downturn, but when it comes to the upturn, every group joined forces claiming lower taxes or new reforms. We managed during the years of fiscal consolidation and reinforcement to create a new norm for public finances, and that was 2% surplus over the business cycle. Have worked so far. And also gave in this downturn a very good support for our automatic stabilizers. What have I told you? This is a pure political project. That is the first thing. The second thing, it's not so difficult to realize what to do. The difficult thing is to do it. The third thing, never ever underestimate ordinary people's fear for changes. They might be totally dependent on our programs. Never ever underestimate that. On the other hand, not taking action is risking everything. And that is to betray those who elected you. Finally, it was time for structural reforms, but they were not a part of the budget consolidation program. We had them as a bonus because there was a general awareness of this must not happen again. That is a Swedish story, close to the Canadian. I survived this period of budget consolidation and I was heavily rewarded politically 4 years later 2002 with a beautiful election victory because of the good times in Sweden compared to the awful situation we had 8 years earlier. That's Sweden. Thank you for listening.

There is one important difference. And I hesitate to say because the conservative government in UK, they were in office. They were connected with the problem. I represented '94, '93, the opposition. So, it is much easier for an opposition that wants to go for a harsh program. Of course, it is. It's much more difficult for a government. I belong to left-wing political tradition. For us, it has always been important to have a well-functioning redistributing large public sector. It has been a part of our political tradition. I was the one who killed my darlings. That was not a joke. Therefore, it created credibility. But, for the conservatives, they had been in office for many, many years. And they should have taken action earlier, and so on. It's not so easy. That doesn't mean that the same goes for today's situation in UK. Must be careful about that. This is they were currently government having things to the government at the time.

Mhm.

Yes.

It's a difference. And there might be a valid argument that you just described. But I don't know. I only know one thing. If you continue with today's policy, you will for sure end up in a problem of that kind. Perhaps a couple years later, but you will end up there. Take I took a quick glance at your public financial figures. And already now you can see that the debt service is almost of the same size as your expenditure for transportation or for individual social affairs around 30 billion pounds. That is now with the strong and fast raise of debt. And if you on top of that also will have a fast increase in interest rates. Of course, now you have an authority taking care of how you are financing your debt. And they are of course, as always when they come to British authorities, of top class. I'm convinced about that. But even they will sooner or later have to accept that today's extremely low interest rates will be replaced by something that is so And now we are talking about 100% up from two to four. And on the same basis, on the same broad base. And if the base continues to grow and the interest rates will be doubled, and that is quite realistic calculation, I think. And that's easy to see that your debt service would be around 70 80 billion if you don't do anything. And then we are talking about the same resources as your school system. And that will be done in a couple years. So, that is the problem. And I have made this calculation for Sweden for many many times. We had an annual deficit of 240 billion kronor. 10% interest rate at that time. Divide and then divide it with the number of taxpayers. And then with the number of months, it ended up in every year we had to add roughly 50 euro of tax collecting from those who were ordinary workers to just pay the last year's debt service of the debt we are producing. It's easy to do that calculation. Do it and you'll realize soon that you have to take action. Of course, the other way it's a question of timing. Perhaps you can wait half a year, a year, I don't know. But it's a very high risk to take. It's a risk. And politics is about making choices.

Which area did we protect? None. I know we started with a general cut of all government's expenditure with 11%. That created a very good momentum inside the organization, I can tell you. Everyone realized that this was just not serious. We have to do something. And they contributed. They contributed, no doubt. And we tried to avoid the school system, the health care. If we had a choice, the transfers or the direct public consumption, we went to attack the transfers. We started with the pension system. And we made quite big reductions in the outgoing pensions. And those who are retired, they go to the polling station, you know that. And many of them have not yet come back. So, that was painful politically, no doubt. But transfers before consumption, to reduce transfers before consumption, yes. And investments. Investments, that is one of the most strange thing in international politics. Everyone is talking about investment. But okay, as long as it is investment in the education system, I can understand it. But investment in capital investments, many of them will not stand a cost-benefit analysis. And when the downturn comes, everyone talks about now we must have more of investments. Go for a very careful scrutiny of those projects and you will see many of them will not qualify. But sad to say they are regarded as a motor in the business cycle in the downturn. As a driving force. They are not always at least.

Yeah.

They responded quickly and very competent. Very loyal. And we had the method asking if we should reduce with 11% we asked for a proposal of 20. And then we told them we must have the possibility to finally make our own judgement about what we shall take away. And they came up. We had long lists. The first evening when I was appointed Minister of Finance we sat until 2:00 in the morning with long lists already prepared by the civil servants because they had followed the election campaign and realized what we had promised to do. So the day after that was the 20th of September 2 months later I was prepared to go to the parliament with the first reinforcement program that was of such size so if we had stopped there I think we could perhaps have managed with that program. But that we didn't know at that time. So it was a very quick start front-loaded and firm political support in parliament. At the same time we had the referendum about our membership in the European Union. And that was a little bit tricky. There were those who tried to say we have to do these reinforcement because of our membership in the European Union. I constantly say we can do this reinforcement because we have we can become members in the European Union. And they are helpful and supportive. But also the membership fee we have to pay to the European Union was enormous. And we also had to find room for those 21 billion we pay as a membership fee to the European Union in a budget that already was totally squeezed. That was a thriller, I can tell you. But we managed we managed also that. It hurt the agriculture sector too much. Of course we had a principle at that time every single euro that comes from the European Union to the Swedish agriculture sector that is more than they have received before, we take it back as some type of a tax we use it to finance the membership in the European Union. It almost killed Swedish farmers. Today I am a farmer myself and I realized that was not a wise policy. So the European Union membership was important for us and not least the convergence criteria and the Maastricht discussion and the convergence program very important.

Yes. You can take for instance if you take transfers it's obvious. It's obvious you have to reduce. And then if you go into the school system, the health care system, it was more rational organization, fewer schools, fewer hospitals because in the end it is about that. And it also had a tremendous effect on the housing programs. We took away almost every subsidy we had in that sector. So, it was financed on the market. That was also extremely painful. We had a very generous subsidy system for our housing. So, we not needed at all. Now, 10 years later, no one is discussing it at all. And most of it was used to reduce high interest rates. You know, we had mismanaged our public finances, created high interest rates. To afford to build new houses, we had to subsidize the interest rate. That was the circle. And we broke it. And that was not popular.

Yes. We introduced at the same time a yearly productivity improvement target. So, every year from that year and on, the programs carried out in the different ministries are always reduced with 2% annually. We start with that when we do our budget because the private sector has an efficiency gain of that kind or even more. So, we just give that as the first task for our public authorities. Start reducing 2%. You shall continue to do the same work as the year before. No new tasks, no old tasks gone away. You have to raise your productivity. It works. It has been problem in one sector, the police forces have not been so easy to have a gain in productivity in. But, yes, we had a huge productivity gain. You know, we created after many, many years of constant expansion, we created for the first time an awareness of crisis. And there are many, many talented, intelligent, well-educated civil servants who have seen for many years that this is not meaningful to continue doing. And suddenly they were asked and they had ideas about how to reduce. It was quite easy the first round. The second round was more difficult. And when they know how to with every year, it is quite painful. Consolidation might lead to that some industrialized regions may lose their last jobs. They have had problems to come back again because there was also a transformation of the labor market during this period. Health, no, we can't see any effects. The quality in the school system, no, roughly the same as before. It still is the nation in the world spending most on primary school. With results not bad, not good. It still is the nation together with Israel who are spending most on research and development, 4% of GDP. So, we still have a tax rate of 46%. But we have an expenditure rate of roughly the same level. So, no. The long-term unemployment, regional differences. There you can see it. And for sparsely populated country like Sweden, it is a problem.

Yes, it was intense and no, you are committed. You are tied to the mast. That was the idea. Going out, setting up goals, and telling I am prepared to set my office at stake. You tie yourself to the mast. And even if that is the rational description, it was a very, very difficult period politically. And the opinion polls were awful. Awful. And you know, there is nothing as nervous as a parliamentary group when the opinion polls are going down. And we started with an election result of 45%. And we were down on 28. And then you of course ask yourself, have I made the right choices? That is an ongoing discussion you have. And I don't know if the swing had waited had not come but 6 months later I would not have stand here today. I'm convinced about that. It was so close, so close. So and then I became Prime Minister and I continued as Prime Minister constantly advocating this program. I never left the Ministry of Finance. That was my problem as Prime Minister because I was so connected with this program. So it took at least 4 years before I became a normal Prime Minister for 5 years. And now it is difficult to transform a Minister of Finance to a Prime Minister. It is in Sweden. So because the Swedish tradition you know is the Social Democrats have more or less been in office as long as Sweden as the Conservatives have been in UK. It is therefore two different societies. So, the Swedish Prime Minister has always been a left-winger. And the Swedish Minister of Finance has always been a right-winger. And they have so to say covered the whole spectrum. And to transform a Swedish Prime Minister that is a right-wing politician into an ideological visionary left-wing internationally oriented politician, that was difficult, I can tell you. But I worked hard. And five years later, I think I was rewarded. I took five years, yes. So, no. But we were judged to see and that is what you will also be in UK on the markets. And we had constantly the TV set on. The text page from the market following the difference to German 10-year bonds. Germany was the best-performing economy in Europe and they were most credible. We had 450 basis point when we started and we took that gradually down. And when it started to come down, then you become very strong. At least in your own direct environment. For an ordinary person in the north part of Sweden who has left his job and have had a reduced unemployment benefit, that was completely impossible to understand what we did. But that was at least for us a signal that it worked and we believed in the program. You need to have such a stimulus. You need to have it. It was not easy.

Hopefully the budget process. That was important. Secondly, the goal for surplus in public finances over a business cycle. That was a tremendous political victory as well. Because there had been a constant fight between left and right in Sweden who shall save the money? Is it the public sector or is it the private persons? And here we suddenly ended up in a unanimous parliament deciding that we should have the saving at least 2% annually in the public sector. And if you have take for instance your own country. If you have a surplus of 2% in the public sector year after year, it is a tremendous resource you are building up. Why how can you argue for that? Yes, I say like this. Every private insurance company has some type of a fund. We have the biggest responsibility of all against the most vulnerable in our society. The social insurances, the health care system, the pension system, the child care, those who are weakest, we are responsible for them. We need also some type of a buffer. We need also to be able to tell them that every time the business cycle goes down, that doesn't mean that you have direct reductions, cuts in your sector because we have saved a lot of money that we can use in the downturn. The same way as a private insurance company, Argus. I think that is something that so far has not been attacked. But as you know, political victories, if they live 4 years, that is good. 8 years is marvelous. If they live 12, 16 years, it is something really, really big that have happened. And so far, they still live. The pension system, next year we know if it is solid enough. Yes. And awareness of the need for sound public finances is still there, no doubt. And that's also proud having created that. But then of course, I should have liked being compared with my predecessors with huge social reforms. That had been much nicer in a way. But on the other hand, I secured their reforms reinforcing the public finances. And that was not an unimportant task that I were. That was my destiny. Thank you.