A military power during the 17th century, Sweden has not participated in any war in almost two centuries. An armed neutrality was preserved in both World Wars. Sweden's long-successful economic formula of a capitalist system interlarded with substantial welfare elements was challenged in the 1990s by high unemployment, rising maintenance costs, and a declining position in world markets. Indecision over the country's role in the political and economic integration of Europe delayed Sweden's entry into the EU until 1995, and waived the introduction of the euro in 1999.

PEOPLE
Sweden has one of the world's highest life expectancies and one of the lowest birth rates. The country counts at least 17,000 Sami among its population. About one fifth of Sweden's population are immigrants or have at least one foreign-born parent. The largest immigrant groups are from Finland, the Federal Republic of Yugoslavia, Bosnia-Herzegovina, Iran, Norway, Denmark, and Poland. This reflects the Nordic immigration, earlier periods of labor immigration, and later decades of refugee and family immigration. The proportion of European immigrants has risen, the main reason being the conflicts in former Yugoslavia.

Swedish is a Germanic language related to Danish and Norwegian but different in pronunciation and orthography. English is by far the leading foreign language, particularly among students and those under age 50. 

HISTORY
During the seventh and eighth centuries, the Swedes were merchant seamen well known for their far-reaching trade. In the ninth century, Nordic Vikings raided and ravaged the European Continent as far as the Black and Caspian Seas. During the 11th and 12th centuries, Sweden gradually became a unified Christian kingdom that later included Finland. Queen Margaret of Denmark united all the Nordic lands in the "Kalmar Union" in 1397. Continual tension within the countries and within the union gradually led to open conflict between the Swedes and the Danes in the 15th century. The union's final disintegration in the early 16th century brought on a long-lived rivalry between Norway and Denmark on one side and Sweden and Finland on the other

In the 16th century, Gustav Vasa fought for an independent Sweden crushing an attempt to restore the Kalmar Union and laying the foundation for modern Sweden. At the same time, he broke with the Catholic Church and established the Reformation. During the 17th century, after winning wars against Denmark, Russia, and Poland, Sweden-Finland (with scarcely more than 1 million inhabitants) emerged as a great power. Its contributions during the Thirty Years War under Gustav II Adolf (Gustavus Adolphus) determined the political as well as the religious balance of power in Europe. By 1658, Sweden ruled several provinces of Denmark as well as what is now Finland, Ingermanland (in which St. Petersburg is located), Estonia, Latvia, and important coastal towns and other areas of northern Germany.

ECONOMY
Sweden is an industrial country. Agriculture, once accounting for nearly all of Sweden's economy, now employs less than 3% of the labor force. Extensive forests, rich iron ore deposits, and hydroelectric power are the natural resources which, through the application of technology and efficient organization, have enabled Sweden to become a leading producing and exporting nation.

The Swedish economic picture has brightened significantly since the severe recession in the early 1990s. Growth has been strong in recent years, and even though the economy slackened during the first half of 2001, the long-run prospects for growth remain favorable. The inflation rate is low and stable, with projections for continued low levels over the next 2-3 years. Since the mid-1990s the export sector has been booming, acting as the main engine for economic growth. Swedish exports also have proven to be surprisingly robust. A marked shift in the structure of the exports, where services, the IT industry, and telecommunications have taken over from traditional industries such as steel, paper, and pulp, has made the Swedish export sector less vulnerable to international fluctuations.

U.S.-SWEDEN RELATIONS
Friendship and cooperation between the United States and Sweden is strong and close. The United States welcomes Sweden's continued independence, secured through self-reliance or in cooperation with other democracies. Swedish-American friendship is buttressed by the presence of nearly 14 million Americans of Swedish heritage. Both countries in 1988 celebrated the 350th anniversary of the first Swedish settlement in the United States.
 
Area: 450,000 sq km (175,500 sq mi)
Population: 8,850,000
Capital city: Stockholm (pop 736,000)
People: 90% Swedes, 3% Finns, 0.15% Sami (indigenous Lapp inhabitants)
Language: Swedish, but English is widely spoken. Five Samish dialects are still spoken.
Religion: Lutheran
Government: Constitutional hereditary monarchy
Prime Minister: Gφran PerssonGDP: US$250 billion
GDP per head: US$28,283
Annual growth: 1%
Inflation: 2%
Major industries: Forestry, mining, agriculture, engineering and high tech manufacturing, telecommunications, IKEA
Major trading partners: EU, US
Member of EU: yes
Euro zone participant: no