LESSONS THAT W APPLIED:

Though Sweden's latest GDP figures were a surprise, and have resulted in a hurried upward revision of 2012 growth forecasts, they were no flash in the pan.

After slumping 5% in 2009, Sweden's economy surged 5.8% in 2010 and 4% last year. Britain shrunk a little less in 2009, 4%, but grew only 1.8% in 2010 and 0.8% last year. Leaving aside the vagaries of the data, the maths suggest any growth this year will be difficult. Sweden's economy is well above pre-crisis levels of GDP, while Britain's is more than 4% below it.

What is Sweden's secret? It helps to have had a banking crisis in the past. The Swedish crisis of the early 1990s was used as a template in the wider crisis of 2008-9.

Bust banks were nationalised and assets sold off. Taxpayer funds were injected at considerable cost. The banks were later privatized and, on some measures, at no overall cost to government of the rescue.

The episode did not make Sweden immune to the crisis in 2008-9, as the GDP figures show. But, unlike in Britain, there has been no prolonged banking hangover.

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