Sweden’s Ambassador, Nicola Clase, offers her Country’s Perspective on European Integration

During the past few years, the EU has been faced with major economic and financial challenges. Unsustainable debt, high unemployment and weak financial systems have plagued EU member states. As a consequence, Europe has been faced with market volatility and considerable macro-economic uncertainty. But Europe is also faced with many other challenges, such as global competitiveness, an ageing population and climate change, as well as threats of terrorism and organised crime.

More than ever, there is a need for a clear and positive vision for the EU’s future and an acknowledgement that the challenges faced are too great for any member state to address alone. The critical question is how to ensure that the EU is able to increase its prosperity in a rapidly changing world. In many ways, Europe is at a turning point in history and basically faces a critical choice to reform or decline. A weak Europe that does not reform will lose significant influence and will suffer a loss in welfare and overall standard of living; a strong Europe has the capacity to address global challenges and has a key role to play on the international scene. The EU is our best tool in facing many of our future challenges and we should have a clear focus on areas that benefit everyone in the Union.

If the EU is to address issues related to economic growth, unemployment and competition in an efficient way it has to show determination. A number of European countries have been through difficult times in recent decades, but have used the crisis to trigger necessary reforms. Sweden suffered a deep crisis in the 1990s and learned several important lessons. Firstly, the crisis forced Sweden to modernise its economy. A radically new macroeconomic framework was put in place, with an independent central bank, strict budget rules and deregulation. Secondly, major welfare reforms were put in place, such as an overhaul of the pension system and the introduction of lower benefit levels.  Obviously, Sweden was not immune to the recent crises as some Swedish banks lent heavily to the Baltic countries, which suffered a terrible crash. However, prior experiences of crisis management in the 1990s meant we were able to deal with the situation with a firm hand.

It is critical that states with large deficits pursue stringent policies to ensure that they restore fiscal credibility; this requires being transparent about the challenges ahead. The EU and eurozone cooperation have been critical in dealing with the economic crises and turmoil of the past few years and the Union has agreed on new and stronger rules for economic governance.  If the measures adopted are combined with real and rigorous adherence to the rules of the Stability and Growth Pact, there is no doubt that member states will move towards better governance of the European economies.

There is deep and mutual interdependence between the eurozone and the rest of the EU. Today, almost 70 per cent of Swedish trade is conducted with other EU countries, and our economy and industry are heavily dependent on strong and stable finances in the eurozone. Swedish jobs and Swedish welfare have everything to gain from Sweden being at the core of European integration.

The Lisbon Treaty introduced a number of institutional changes to strengthen the role of the EU. Expectations were high that the Union would now be able to leave behind cumbersome discussions on the institutional issues and focus on major challenges affecting the Union. However, in times of crises it is only natural that member states resort to analysing how EU institutions can be reinforced and work more effectively, but at the same time we must avoid blaming those same institutions for our failures.

The Swedish Government strongly advocates the need to continue to strengthen the EU’s single market and complete it with services, the digital society and other sectors. As the largest single market in the world with 500 million people, it is undoubtedly the core economic driving force of the EU. It also remains our most effective means of responding to the current economic crisis. By bringing down barriers to the free movement of goods, services, capital and people, and by strengthening competition, the single market has contributed to increased growth of at least 1.85 per cent and the creation of 2.75 million new jobs across the EU. However, its growth potential has not yet been fully exploited, despite the progress made since it was created in 1992.

In upholding the European project through difficult times, all member states – whether in the eurozone or not – need to remember the common cause of a united Europe. Our common interests – Europe’s political, economic and social development – remain the bedrock of the Union. The EU has to get better at promoting trade relations, climate change, human rights and the rule of law with all countries, including with our strategic partners. The EU also has to be a leading actor in championing free trade, not least to help the world’s poorest nations.

It is important to remember that the peaceful integration of Europe has brought tremendous benefits to our once war-torn continent and that enlargement is one of the key historic successes of the EU. Sweden is a strong supporter of continued enlargement and would like to see the entrance of new member states such as Turkey, once they have fulfilled the necessary membership criteria.

Looking ahead, the European integration model must be strong enough to ensure that neither fanatical nationalism nor religious extremism can ever pose a threat to future peace and stability in Europe. European cooperation has so much to offer when we work together as a decisive force in the global arena to promote security, democracy and prosperity.