Great expectations as Sweden takes over E.U.

By Batuk Gathani

BRUSSELS, JAN. 2. Sweden took over the six monthly rotating presidency of the E.U. on Monday, amid wider expectations after the controversial French presidency, particularly in the background of the `ill-tempered' December summit of the 15 E.U. member-States in Nice where major European economic powers were seen bitterly wrangling over voting rights in the expanded Europe of the future.

The E.U. may have 10 more members from the former communist ruled region of the Eastern and Central Europe in the hey day of the Soviet Union's hegemony, which ultimately collapsed in 1989 more than a decade ago.

Sweden is often seen as Western Europe's `northern bridge' with Russia. Hence, the Swedish Prime Minister, Mr. Goeran Persson, emphasised the need for better ties with the E.U. and Russia. Sweden aims to run `an impartial, efficient and transparent' presidency that can show to E.U.'s 370 million citizens that the E.U. can deliver on its promises. The irony is that Sweden like Britain ranks as `euro-sceptic' member of the E.U. and like Britain, Sweden is still not a member of the European Monetary Union nor has it adopted `euro' as its future currency. The Swedish media points out that all this can change. The Swedish public's response to the E.U. will `soften' during Swedish presidency.

The Swedes like most Europeans are also worried about the unfolding crises ridden economic scenario, which is fast engulfing both sides of the Atlantic. The current debate in the European financial circles is weather euro can continue its ascent this year after plunging 30 per cent against the dollar in 22 months. In recent days, euro has rallied 12 per cent and many analysts are wondering whether the much anticipated re-bound in euro's fortunes will continue. On matters related to the European Monetary Union and the future of euro, Sweden is handicapped since it is not a member of the E.U.M.

The essential task of the Swedish presidency is to accelerate negotiations with the future members of the E.U. as current estimates would indicate that the E.U. will have 10 more members during the next one or two decade. The Swedish officials are reluctant to state who will join the E.U. when, but an enlarged E.U. is a priority for the Swedish presidency. The E.U. enlargement is widely perceived to be a sensitive issue in many E.U. countries. For example, a vast number of Germans are already horrified by prospects of `thousands and thousands' of East and Central Europeans descending on German industrial heartland for jobs.

While the European powers are not in principle prepared to compromise over the guiding principle of `free labour movement' in the E.U., most politicians also agree that this is a `dynamic if not controversial' issue in major E.U. economies where unemployment still hovers round the 10 per cent mark.

The prognosis for economic growth look depressing in the background of much uncertainty about indefinitely sustaining a decade of steady economic growth on both sides of the Atlantic.

Sweden is often rated Europe's most ardent `neutralist' and it remains to be seen how it will respond to the agenda of implementing the proposed `European defence force' and its relationship with NATO, in the background of Sweden's history of neutrality and its non-aligned status. In many forums of the E.U., Sweden is often seen as a `reluctant' partner who like Britain, albeit for different reasons, has yet to prove its European credentials. Britain, unlike Sweden, equates itself with two major E.U. powers - Germany and France. With German unification, its population and economy are already a third larger than France which now ranks as the second biggest economic and political power in the E.U.

The expanded E.U. which will soon border with Russia and Turkey and offers endless trading and investment opportunities for the current E.U. member-States. With the launch of euro currency next year, these opportunities will be further consolidated. This is why the Swedish presidency has special importance.

The first batch of `new members' may join the E.U. by 2004. Under the Swedish presidency, the E.U. will also try to come to terms with the new Bush administration in the U.S. It also remains to be seen how the U.S. and the E.U. will cope with a string of unresolved trade disputes ranging from beef hormones and import of bananas to taxation matters.

Sweden ranks among the world's highest taxed countries and its Government authorities often find themselves in a strange quandary as the major companies and wealthy individuals, consider moving abroad to escape rigours of Sweden's high taxes. Sweden also has after Germany, one of world's highest labour costs.

Sweden has been a model welfare socialist state in post-war Europe, and has the heaviest tax burden in the OECD - world's richest industrialised countries and Sweden's employment taxes are highest in the E.U. According to an American company, an employee who would cost say, $150,000 in the U.S. would cost between 350,000 and 400,000 in Sweden.

With a population of some seven million Sweden is a huge North European Scandinavian country. Sweden is famous for its neutrality and has not gone to war since 1814. The chief preoccupation of its foreign policy is to avoid being embroiled in one. Swedes are also the world's most pampered and protected citizens who are cushioned by most generous welfare social security system, but Sweden also has high suicide and alcohol abuse rates in the world.

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Section  : International
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