Jul 1, 2009 | 18:52 GMT

6 mins read

Sweden: Stockholm Takes the Reins of the European Union

Sweden became the next European Union country to hold the presidency of the European Union on July 1. Sweden has many issues to deal with, including the global financial crisis, ratification of the Lisbon Treaty and expansion of the bloc. Instead of addressing these problems, Sweden will turn its attention to challenging Russia for influence in the Baltic region. The next six months will allow Stockholm to try its hand at politics on the global stage.
Sweden assumes the presidency of the European Union on July 1. The EU presidency is a unique institution because it is not elected but instead rotates among the various EU powers on an equal basis for six-month terms. Whoever holds the presidency sets the bloc's agenda, mediates internal European disagreements and serves as the main negotiator with other powers, which includes representing the bloc at the upcoming G-8 and G-20 summits. EU nations always try to use the presidency to put their national stamp on EU policies or to achieve some national goal, but little is ever accomplished since the window of opportunity is only six months. Since the presidency rotates and a country cannot serve consecutive terms, the issues of the day tend to overwhelm its original aspirations. This was certainly the case for the Czech Republic, which has just now completed a turbulent six months at the wheel of the European Union. Despite the problems of government instability (the government fell apart during Prague's turn at the presidency), a global recession, a European constitutional crisis and a convoluted political system that gave the eurosceptic Czech president the ability to magnify, rather than mitigate the crisis, the Czech Republic demonstrated how to ineffectively run the EU presidency. European states welcome the Swedes' turn for the presidency with great relief. Stockholm has a reputation for quiet competence and honest brokering, a welcome change after the frazzled nature of the Czech presidency and the somewhat pushy French presidency that preceded them. Swedish Prime Minister Fredrik Reinfeldt and Foreign Minister Carl Bildt — himself a former prime minister — will officially represent the European Union. Sweden faces challenges to include a global recession, pending ratification of the Lisbon Treaty, problems with expanding the union and the detritus left by the Czech presidency. Sweden is likely to ignore all of these problems — even though the issues are important — because Stockholm is unable to resolve them. The Lisbon Treaty is stuck in ratification mode, with Ireland, Germany, Poland and the Czech Republic thus far withholding formal approval. Since ratification is a national issue, the best thing that any EU president can do to maximize the chances of ratification is to remain silent. A territorial dispute with Slovenia and a name dispute with Greece have snarled EU membership for Croatia and Macedonia, respectively. Bildt has personally spent a great deal of time dealing with the Balkan imbroglio throughout the 1990s and has already made it clear that he does not plan to deal with bilateral disputes. (All EU members have full veto power over the acceptance of new EU members.) That leaves the recession, and Sweden cannot accomplish much to resolve this issue on a European level either. Europe's economic problems are a mix of export failures and homegrown banking problems, issues that fall under national sovereignty — as opposed to European-wide regulation. Since Sweden is not a member of the eurozone, it lacks a credible platform to push for controlling Europe's spiraling deficits and any meaningful shifts in monetary policy. Rather than dealing with the issues of the day, Sweden's presidential responsibilities instead will be something of a homecoming. Four centuries ago, Sweden was one of Europe's most powerful states. It dominated the Baltic Sea region until a series of losses — culminating in the 1809 Finnish war with Russia — forced it into a self-imposed geopolitical irrelevance (that is, neutrality). Times have changed. Between NATO's expansion and Russia's slide since the Cold War (currently paused by a period of resurgence following the August 2008 Georgia war), Sweden has seen its sphere of influence return. Therefore, with many European issues either not on its radar or outside of its reach, Stockholm will be able to concentrate on the one issue it truly cares about: the Baltic region. Following patterns established centuries ago, Sweden will use economics rather than armed conflict to deepen its influence in the Baltic countries. First on Stockholm's agenda is reducing the Baltic countries' dependence on Russian energy, a lever that Moscow can always use in the region for political gain. The Swedish presidency will have the opportunity to influence the EU Commission plan, signed on June 17, to link up the Baltic states' energy networks with the rest of Europe. While the project funds are not immense — 500 million euro ($708 million) — the plan sets an ambitious agenda of linking Baltic countries' electricity networks with the rest of Europe and reversing natural gas pipelines to bring gas to the region, insulating it from a potential future Russian natural gas cutoff. Aside from energy, Sweden will look for opportunity in the current severe recession affecting the Baltic region. Swedish banks have claimed the region as their turf since the end of the Cold War and are now overexposed to the troubled economies. But that also means that Stockholm is sympathetic toward bailout plans for the emerging Europe. Not only does Sweden have its own money at stake, it also expects to remain a key financial player in the region in the future. The challenge will be convincing Germany and France that Central Europe and the Baltic states need EU funds. The success of Sweden's attempts to diversify the Baltic region's energy and fix the region's economic problems in the next six months is suspect, but it can at least begin the process. The main difference between the Czech presidency and the Swedish presidency is that Stockholm will not try to resolve every crisis that befalls the European Union and instead concentrate on crises that it finds both strategic and self-serving. What is more important than actual progress in the Baltic region is Stockholm's public announcement to Moscow that it intends to characterize its EU presidency by competing with Russia in the Baltic region. Additionally, Sweden remains close to NATO and is contemplating membership in the alliance. These moves may take the Kremlin by surprise and make it nervous, since it was able to dismiss Swedish presence in the Baltic for the last 200 years. The latter part of 2009 may therefore be quite a coming-out party for Stockholm. Unlike the Czech Republic, Sweden will be able to concentrate on its strategy because it is not facing a domestic political meltdown. Reinfeldt's job is secure, with his center-right coalition holding up in its most recent test during the EU parliamentary elections, and Bildt is highly respected internationally. None of the EU member states, including the more powerful members, will be able to dismiss the Swedish presidency in the same manner as Prague's disjointed leadership. The next six months will be a test of how ready Sweden is for the big leagues.

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