Thursday, 22 September 2011

Sweden in Europe: Carl Bildt and Anders Borg stress EU unity

The blog post Sweden promotes EU enlargement no end continued the discussion about Swedish EU politics as described in the Statement of Government Policy. There are also links to the earlier blog entries in the post.

Alternatively, you can read more or less the same thoughts in Swedish, with links here: Svensk EU-politik diskuteras.

Against this background, we can now turn to what two Swedish government ministers recently wrote about the institutional cracks and challenges of the European Union.


Carl Bildt & Anders Borg

Carl Bildt is the minister of foreign affairs and Anders Borg the minister of finance. Their op-ed piece was published in the Frankfurter Allgemeine Zeitung 15 September 2011.

A tweet by the author Hanneke Siebelink - @Europewatcher on Twitter – made me notice the column. I decided to write a few posts about Sweden in the European Union before presenting the article by the Swedish ministers.

Here is the English version of the text:

Carl Bildt & Anders Borg: The dangers of two-speed Europe

In German:

Carl Bildt & Anders Borg: Die Gefahren eines Europas zweier Geschwindigkeiten


Competitiveness

In the middle of the financial and economic crisis, Bildt and Borg chart a route through fiscal prudence and structural reforms to competitiveness:

States with deficits must pursue serious, substantial, and sustained fiscal consolidation, using all means available, including increased tax revenues and expenditure reductions. They should strengthen fiscal frameworks to help restore fiscal credibility. Similarly, labour and financial market reforms may be necessary domestically.

Growth-oriented restructuring must be a priority.

This is in line with the message in the Statement of Government Policy:

In times of economic crisis, the Government will underline the importance of long-term responsibility and sustainable economic policy. Respect for common rules is crucial. This is the only way we can speed up economic recovery in Europe and prevent new crises.


Unity of EU

After discussing strategic budget measures to restore competitiveness and after recapitulating some of the main actions at European Union level, Bildt and Borg arrive at the crux of their message, their rejection of a two-speed Europe. They see the risk of the eurozone 'closing its doors' on the rest of the EU countries, and they appeal for the continued use of EU institutions and procedures. Economic policy cannot be separated from the rest of the EU 'acquis':

Our existing institutional infrastructure may not be perfect, but the European Council, the ECOFIN Council, including the Euro-group, and the Commission are strong, well-respected, and effective institutions. They, together with the community method of co-ordination, have underpinned the EU's economic development.

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In addition, there is no way to separate the economic reform needs of Europe from areas like competition policy, trade relations, research policies and everything else associated with the internal market that remains at the core of the European integration efforts. If separate structures undermine the cohesion of the policies of the internal market we will all suffer badly.

According to Bildt and Borg, the trend towards deciding issues within the euro group or bilaterally between countries would lead back to (even more) old-style intergovernmental coordination. Instead of a core Europe moving ahead, we might get a more profoundly divided Europe with regard to growth and competitiveness:

We thus risk seeing the emergence of a low-growth, transfer-dominated part of the union and a high-growth, more competitiveness-oriented part of Europe - and a gradual weakening of the institutional structures designed to keep Europe together. This must be avoided. It is not in anyone's interest. A great responsibility lies with the leading Euro-states - a responsibility for both the Euro-zone and the future of the wider European project.

Naturally, one part of their worries is based on Sweden being outside the eurozone and loath to lose influence, but it would appear simplistic to brush aside the arguments of Bildt and Borg without further ado. Their column opens up almost too many avenues for further discussion about the basic choices for the European Union and the eurozone.

Two-speed, one-speed, slow-speed or no-speed Europe?

What should we get, and why?


Ralf Grahn