A Warning From Sweden
07. May 2025From Model to Warning: How Sweden’s Welfare Reforms Spark Alarm Across Europe
Sweden’s experiment in privatising welfare has triggered rising inequality, corporate profiteering, and criminal infiltration — now its model is being exported abroad.
A Radical Shift in Welfare
Once the poster child of social democracy, Sweden has undergone a profound transformation since the 1990s, driven by a sweeping wave of privatisation in its welfare services. The introduction of market principles, voucher systems, and open competition was supposed to boost efficiency and user choice. Instead, it has created a powerful sector of profit-driven corporations — and mounting evidence suggests the costs to society have been severe.
As Lisa Pelling outlines in a recent report, Swedish welfare’s neoliberal turn has been so far-reaching that it now serves as a cautionary tale for the rest of Europe. The changes, initially hailed as innovative, have led to significant inequality, degraded public services, and, alarmingly, the infiltration of organised crime into tax-funded institutions.
The School System’s Fall from Grace
The first major arena of reform was education. In 1991, Sweden introduced voucher-funded schooling, allowing families to divert public funds to private institutions. While theoretically promoting choice, in practice it favoured wealthier families. Privileged pupils were readily admitted into profit-oriented private schools, while disadvantaged children were concentrated in underfunded public ones. This deepened socio-economic and ethnic segregation — with serious academic consequences. Sweden has recorded the steepest drop in PISA scores among OECD nations.
Nevertheless, major Swedish school corporations are aggressively expanding into Europe. AcadeMedia, a leading player, recently acquired over 100 pre-schools in Finland and is growing its footprint in Germany.
Healthcare: Profit Over Patients
The same logic extended to healthcare. A compulsory voucher system was introduced in 2010 for primary care. As with schools, this empowered private actors to cherry-pick low-cost patients, typically those with minor ailments and higher incomes. The result? Unequal care and strain on public health budgets. Digital healthcare providers, such as Kry, have surged in popularity — but largely serve those with mild symptoms, further diverting resources from those most in need.
These models are now crossing borders. Kry has already established operations in the UK, France, Norway, and Germany, offering streamlined, app-based care that prioritises profit margins.
Elder Care and the Covid Reckoning
The privatisation of elderly care has also raised red flags. Firms like Attendo and Ambea have been criticised for relying on insecure employment contracts. During the Covid-19 pandemic, these staffing practices were linked to higher death rates. Nevertheless, these companies are expanding their operations into Finland, Norway, and Denmark.
Criminal Infiltration and Public Backlash
More disturbing still is the recent involvement of criminal gangs. In 2025, Sweden’s Economic Crime Authority revealed that tax-funded welfare sectors — including healthcare, pre-schools, and pharmacies — have been infiltrated by organised crime. Raids in Göteborg exposed how privatisation has created vulnerabilities ripe for exploitation.
Exporting a Flawed Model
Despite these alarming developments, Sweden’s welfare companies, often backed by international venture capital, are exporting their business models across Europe. By leveraging Sweden’s legacy image of progressive welfare — invoking imagery of idyllic childhoods and Nordic purity — these firms obscure their profit-driven motives.
As European countries face pressure to reform their own welfare systems, Sweden’s experience offers a clear lesson: marketising public services can erode quality, increase inequality, and threaten the very foundations of the welfare state.
The message from Sweden is stark: don’t try this at home.
Source: Social Europe