Friday, May 14, 2010

Stockholm vs. Brussels - a new deal?

Greece's close-to-bancruptcy has rattled the EU. The seriousness of the situation is underlined by the magnitude of the answer that came form the EU finance ministers last week. The fantastic sum of 750 bn EUR is supposed to calm the markets, and to show how dedicated European leaders are to save the Euro. Only time will tell if it is enough.

Yesterday the European Commission announced that a whole number countries, among them Sweden and Bulgaria did not meet the requirements to joint the Euro zone. Estonia did meet the criteria, but this looks more like a polite way of saying that the Eurozone has more than enough of its own problems right now. One of this problems is obviously the different economic realities in the different euro zone countries - and each new member state will make the divergence even bigger.

Image by irene

In spite of headlines talking about the collapse of the Euro, both Bulgarian and Swedish politicians have stated that they are looking to join the Eurozone, which seems suidical at a first look.
For Bulgaria it makes slightly more sense than Sweden. the EU is in Bulgaria about very much more than economic issues, it is part of the process to make Bulgaria a firmly rooted European country. Many Bulgarians feel that their country was de-europeanized when the Ottomans took it over in the late medieval times, and that it has not yet been fully reintegrated.

That Bulgarian politicians claim that they want to join the Eurozone might be interpreted as a sign of showing their loyality to Brussels, and their pro-european values to their own voters. It doesn't necessarily mean that they will want to join right now. But in an unpredicatable world the Euro will always be a safer bet than the Bulgrian leva, and the 750 bn EUR for bail outs is more than the Bulgarian state could ever conjur up. We must also remember that the Bulgarian leva is already pegged to the Euro, so whatever happens to the Euro will happen to the leva as well.

The situation in Sweden is quite different. Yesterday Jan Björklund, leader of the liberal party Folkpartiet said in Swedish radio that he wants Sweden to adopt the Euro as soon as possible - something that his opponent from the green party Peter Eriksson called "dangerous politics". Sweden already has a strong currency, so it is unclear what to gain from joining the Eurozone. Possibly Euro-adoption would lead to increased trade with the European continent, but that weighs lightly compared to the benefits of having a free flowing currency. One can easily imagine how much harder the financial crisis would have hit Swedish industry if the krona wasn't able to sink and make Swedish products cheaper internationally.

Björklund was actually very clear that his longing for the Euro had little to do with economic realities. He is a believer, and he believes in the Euro and a united Europe. This is no surprise. Here up north EU question has been a very square right - left question. Whereas the right, especially the liberals routinely says yes to everything that has to do with Europe, the left routinely says no.

That is why it was slightly surprising to read this morning that the Swedish prime minister Frederik Reinfeldt had protested against the European Commissions plan to prevent the greek situation from reoccur. The commission proposal includes a stricter enforcement of the rules about good economic behavior, and that each member state (or possibly just euro zone countries) hands over a draft budet proposal to the commission for control. This is exactly what angeered Mr. Reinfeldt , who doesn't think that well behaving countries should have their budgets controlled by Brusells.

Why not, one may ask. The point of the control would not be to punish wrongdoers, but to prevent small mistakes from turning into big crises. It would mean a giant step towards European integration, something that the Swedish liberal right has been fighting for since the EU was called the EEC. It is obvious that something has to change now, so why not grasp the moment and try to create a unified Europe once and for all?

The EU -debate in the nities was maybe the first political debate I took part in myself, and back then it seemed to be a good reason for the left/right division. EU legislation seemed to coincide neatly with how the liberal right wanted to reform Sweden. A defence of the social democratic welfare state included a defence of Swedish legislation against EU directives. That defence was lost. Sweden became neo-liberalised. But what happened to Europe?

If one travels in Europe these days, it is sometimes like taking a trip to the Sweden I grew up in. Is there any other country where the train system is privatized as in Sweden? Oh yes, the UK... but I've heard they are not so pleased with it there. And the schools? is there any other country were the state pays for private schools? Well the UK under Cameron might try 'Swedish schools', but I bet they will change their mind sooner than later.

After some ten years inside the EU, it is clear that outside Sweden there are a number of political projects that try to use the union as their own platform, not all of whom are liberal. In the wake of the crisis neo-liberal thinking seems much more discredited on the continent than it is in Sweden (maybe this is just a provincial delay?). The strongest words against greedy bankers came from France and Germany, not Sweden.

The Economist's blogger Charlemange highlights that France has its own plans for the EU , a project that has been carried out with consistence since decades. It is about giving the European Union power over member states' economical and social policies, and then upgrade them so that no country can undercut French industry with less generous welfare systems.

If we have four more years of right wing governanve in Sweden after the elections in September, the French plans sound like music to my ears. At the moment the EU seems to be drifting leftwards, and if they hand over control over the Swedish budget, it will be increasingly difficult to carry out expensive neo-liberal projects. Like "Swedish schools" or privatized trains. MAybe that is what makes Reinfeldt nervous.

No comments: