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(David Smith)

The bespectacled and pony-tailed Swedish politician Anders Borg may be the only male finance minister in Europe to wear an earring to work, but don't let his unlikely appearance throw you: he is not to be underestimated.

Perhaps it is because this libertarian does not see himself as a politician but as an economist that he isn't bothered much by how others perceive him. Borg has advocated drug legalisation and, in keeping with his slightly hippie image, admits that he smoked pot in his youth. Perhaps this attitude explains why he had the courage to push through spending cuts and controversial tax cuts. Although scrapping a wealth tax and several property taxes was politically difficult at the time and lost his party some support, the results are paying political dividends.

Unusually for someone in such a senior government position Borg, who is 44, doesn't have an academic degree although he spent several years at university. Judging by his success, his time spent studying political science, philosophy and eventually focusing on economics was not wasted and led him away from a Keynesian view of the world. His view of how Sweden's economy should work was undoubtedly also shaped by six years working in the banking sector before victory in the 2006 election led to his appointment as finance minister in the new centre-right cabinet. It was a leap of faith for Prime Minster Fredrik Reinfeldt, as Borg's previous political experience amounted to two years in the early 1990s as a political adviser in the prime minister's office, coordinating the work of various non-financial ministries, followed by two years as an adviser to the then prime minister Carl Bildt.

Borg is bold. He refused to listen to those shouting down his approach at a time when the Obama administration was planning an enormous stimulus package and the whole of Europe seemed to be cheerleading for bailouts. He dismissed that approach and said the US President was wrong to risk future deficits to provide first aid to the American economy. He has been vindicated. Sweden's economy is outperforming the rest of Europe and commentators all over the world are urging other finance ministers to take a leaf out of Sweden's book. Reinfeldt and Borg's reward was to see their coalition re-elected in 2010. But Borg modestly declines to take all the credit, saying merely that the Swedish economy's performance has been helped by "strong institutions" and "broad support for responsible policies". 

As Sweden is outside the eurozone, Borg has to some extent been dealt a lucky hand, in that he has avoided the bond market turmoil that the rest of Europe faces. He doesn't sit on the sidelines and dish out advice, venturing only to suggest that other finance ministers learn from Sweden's 1990s banking crisis. It is this understanding of historical events and quiet confidence that distinguish him as one to watch. His main advice to George Osborne, his British counterpart, has been to focus on dealing with the deficit, as he himself has successfully done.

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