In the 1990s, Sweden experienced a major economic crisis similar to the one EU countries are facing today, notes Prof. Núria Mas of IESE's Department of Economics. Following a real estate boom and bubble, the country's public debt skyrocketed from 40 to 78 percent. But Sweden rebounded and today is a top economic performer.
The country's comeback strategy included balancing the budget, setting a surplus target and imposing a productivity adjustment. It also created a system for allocating surplus funds to government projects in a much more effective way.