Sweden has long enjoyed a high standard of living and a generous social welfare system, but the Scandinavian country has struggled in recent years to maintain the services its people have come to expect.
Sweden prides itself on its vast array of government benefits and cradle-to-grave care for its citizens, who have largely accepted higher taxes as the necessary price for expanded government services. Almost 90 percent of the Swedish labor force is unionized.
The nation has one of the world's highest life expectancies, as well as one of the lowest birth rates.
Aided by a heavily industrialized economy, a vigorous high-tech sector and decades of political neutrality, the country thrived for much of the 20th century, but the collapse of the 1990s technology boom and burdens of maintaining its welfare state hit the country hard.
The welfare system was reformed in 1991, but remains among the world's most extensive benefits programs.
Joining With Europe — Slowly
Sweden has not participated in any war in almost two centuries, and remained neutral in both World Wars and the Cold War. In recent years, however, it has gradually moved toward further integration with Europe.
The country is considering adoption of the euro, but is skipping the first round of the common currency to be used in many European countries.
Sweden, Britain and Denmark are the only members of the 15-nation European Union that will not replace their national currencies with euro notes and coins in 2002.
Reflecting its skepticism about international alliances, Sweden did not join the EU until 1995.
Sweden's 9 million inhabitants live mostly in major cities, interspersed with vast stretches of empty, frigid countryside. The country occupies a territory the size of California, located on the edge of the Arctic Circle between Norway and Finland. Only 7 percent of its territory is suitable for farming.
Sweden is home to the Nobel Prize, named after the 19th century Swedish inventor of dynamite who used his fortune to establish the prestigious awards.
Like Great Britain, Sweden is a constitutional monarchy, with King Carl XVI Gustaf as its head of state. Governmental power lies in the hands of a democratically elected prime minister and parliament. The national capital is Stockholm.
The country suffered a rare period of political turmoil when Prime Minister Olaf Palme was assassinated in 1986 by a gunman whose identity remains unknown.