This is some very sensible stuff, from the usually very sensible Swedish Prime Minister Frederik Reinfeldt, reacting to yesterday's meeting between Merkel and Sarkozy.
On economic governance
“The best thing would be clear formulas for advancing decontamination of public finances.”
On financial transaction tax
“I do not believe in this idea, if it is not adapted globally, for everyone at the same time. What was expressed yesterday was the idea to only impose it in the Eurozone.”
“Sweden is interesting because we are the only country with any real experience on this type of transaction tax. If it is only imposed on one part of a market, our experience is that it brings small amounts of income, but transactions move away. If this is imposed on the Eurozone, it is easy to see how a large part of international transactions move to London, or why not Stockholm?”
On Eurobonds
“In reality this means that well managed countries accept higher interest rates, in order to push rates down in less well managed countries."
All of which of course is true, though a rules-based system for public spending - where Sweden clearly takes a similar line to to Germany - is fine in theory, but difficult in practice (read: national democratic politics).
Incidentally, when will Reinfeldt come out against Sweden joining the euro? The Swedish centre-right parties' support (their leaderships, not members) for the euro - a manifestly flawed project which has nothing to do with liberal economics - remains one of the greatest political anomalies in Europe today.
Reinfeldt, being a sensible man as you describe him, will not come out against the euro because he knows full well that Sweden is under a treaty obligation to join once it has met the criteria. It did meet these criteria but failed to gain the necessary approval in a referendum. By a happy coincidence, Sverige's Riksbanken does not meet certain of the technical criteria (at the moment!).
ReplyDeleteThanks anonymous. Good point, though that could easily be fixed through a UK or Danish-style protocol, to be inserted at the same time as the Treaty change to accomodate for the European Stability Mechanism or in the Croation Accession Treaty. Reinfeldt would probably have overwhelming electoral support for such a move, don't you think?
ReplyDeletePerhaps electoral. But do not forget that his party is ideologically stalwart for European integration (which actually is seen by Swedish liberals and Moderate party radicals/neoliberals as a right-wing, progressive capitalist project). He has the upper hand in the party right now (due to the success in elections and popular support) and is supported by the weaker conservative party faction. But a no euro-campaign would certainly risk his position in the party. He does not need to do anything, an opt-out clause would only stir matters ideologically. Factually, no one will force Sweden into EMU in years. So why should he move? He is also a careful player in general...
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