Sweden has Found a Comfortable Home in the EU – for now

Kenneth MacArthur | 18 March 2020

© 2018 SCER

I went to Sweden for the first time in 2003. I happened to be there during the country’s euro referendum campaign, a tightly fought race perhaps most remeambered for the tragic murder of the country’s foreign minister and leading euro membership advocate Anna Lindh less than a week before polling day.

Sweden for a long time stood apart from the mainstream process of European integration embodied in the European Communities and subsequent European Union. But following the end of the Cold War, and with the centripetal force of an integrating single market on its doorstep, the country made the decision in 1992 to join first the European Economic Area and then in 1994, by referendum, to join the EU – which it did along with Austria and Finland on 1 January 1995. While Austria and Finland went on to become two of the eleven founding members of the euro in 1999, Sweden again stood aside – though it did not wait long to (re-)broach the question, holding the aforementioned referendum on euro membership less than five years after the establishment of the single currency. Unlike in the EU accession referendum of the nineties, however, this time the result was a clear “no”. The limits of the Swedish people’s appetite for – or tolerance of – European integration seemed to have been reached.

In the intervening period, while support for euro membership in Sweden has dropped markedly, the country has – perhaps unbeknown to the majority of its population – signed up to other voluntary areas of European integration, such as the treaty on stability, coordination and governance (popularly known as the fiscal compact) and PESCO, and considered joining others, such as the banking union. Sweden does not have any of the opt-outs of Denmark or Ireland, so, notwithstanding its hesitation on the currency question, it is today, in almost all other respects, a fully paid-up member of the European project.

Indeed, while this was not always the case, Sweden is now the most politically European of the three Scandinavian countries. (The other two Scandinavian countries being Denmark and Norway.) The population may not be au fait with the finer details of what the country’s EU membership entails, but public consent for it appears strong – even the right-wing Sweden Democrats no longer advocate Sweden’s exit from the union.

This is perhaps not so surprising. Once Swedes got over the initial hurdle of joining the European Union, their more open, internationalist outlook led them to find a comfortable place in the club. They may not like every EU policy – especially when these are perceived to conflict with the Swedish (or Nordic) way of doing things – but they appreciate the greater public good of being part of the much larger economic and political space that is the European Union, particularly when it comes to tackling issues which are inherently cross-border such as climate change. The level of public sophistication around the country’s EU membership is arguably much higher in Sweden than, say, in the UK prior to Brexit.

Sweden also established much closer domestic parliamentary scrutiny of its government’s actions in the EU from day one of its membership, with the Riksdag’s Committee on EU Affairs (EU-nämnden in Swedish) effectively signing off mini-mandates for government ministers ahead of all of their outings to the Council of the European Union and European Council. Again, in contrast to the position in the UK pre-Brexit where even a minority government would have had a free hand to agree to more or less whatever it wished in the Council (save perhaps if doing so would incur the wrath of the Daily Mail), Sweden’s constitutional setup provides a much greater degree of scrutiny of, and thus democratic accountability for, its actions as a state at EU level – even if, as of course will be the case, that state doesn’t always get its way.

For the foreseeable future at least, Sweden’s place in the EU seems secure. Its population has become accustomed to the trade-offs inherent in EU membership and has reconciled itself to them. However, in the years to come, Sweden faces some tough choices in the economic and monetary policy arena – particularly in light of Brexit, and the consequent reality that soon four fifths of the EU population will be inside the euro area – as countries in the single currency pursue necessary further integration. This was acknowledged by the Swedish government’s inquiry last year into Sweden’s participation in the banking union:

“There is a risk of marginalisation for Member States that are outside currency cooperation, particularly in the light of the UK’s intention to leave the EU.”

This also has implications for a potential independent Scotland. If, over the coming years, the notion of a country being a member of the EU but not a member of the euro becomes less tenable (regardless of whether it is technically possible for an EU member state to remain outside the single currency), an independent Scotland might need to choose between joining the euro, and having a looser, perhaps EEA-style relationship with the EU.

Sweden is a modern, open, but relatively small economy that over the past 25 years has found a comfortable home for itself inside the European Union but outside the euro. However, as the EU integrates more, particularly in the economic and monetary policy sphere, the country faces a choice about whether to finally go all-in on the European project, or perhaps, eventually, to take a step back and join fellow Scandinavian country Norway in the EU’s outer orbit. Other countries that have thus far also not felt inclined to join Europe’s single currency project – such as Czechia, Denmark, and a potential independent Scotland – face a similar decision.

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Kenneth MacArthur works in tech, but also has a more than passing interest in constitutional and European politics. He has worked in various countries across Europe, and connects that experience with his interest in current affairs.