The decision by the UK to leave the European Union has put Sweden, one of its main partners, in an awkward position. As highlighted by our previous report on Nordic countries, Swedish policymakers are not particularly enthusiastic about the Franco-German acceleration towards a multi-speed Europe, in particular when it comes to the Defence Union and the deepening of the Monetary Union. The fear of Swedish MEPs towards the establishment of new Eurozone structures, as well as new financial instruments, is justified by the increasing share of influence of Eurozone countries in the EU. The risk for Sweden is a gradual shift towards the political periphery of the European Union.
However, despite some eurocritical attitudes, Swedish policymakers are committed to make the most out of the opportunities provided by EU single market, in particular when it comes to streamlining rules for businesses, workers and consumers. Our previous assessment found that Swedish EU Parliamentarians are among the most influential in shaping EU legislation through rapporteurship positions.
We have reached out to MEP Olle Ludvigsson (Swedish Social Democratic Party, S&D) to discover how he has contributed to shape the rules governing the EU internal market, as well as the role of Sweden in such an pivotal moment for the future of the EU (Brexit, Eurozone reform, Defence Union and Banking Union).
Read the full interview below:
1) VoteWatch Europe: Ludvigsson, you have been representing Swedish citizens in the European Parliament for almost 9 years, how would you describe your achievements over this period?
Olle Ludvigsson: Overall, I feel very privileged to have had the opportunity to represent Swedish citizens in the European Parliament during almost two mandate periods. The first mandate period, when I was a full member of the EMPL-Committee and substitute in the ECON-Committee, I focused very much on the ongoing crisis, trying to mitigate the worst effects following the crisis.
For me, it was clear that the emphasis on austerity measures, which many Member States had to implement, was not the best way forward. Instead, we advocated investments complimented with stronger focus on employment growth, active labour market policies and good labour market conditions for all, including respect for collective agreements and trade unions rights.
Since 2014, I am a full member of the ECON-Committee and substitute in the ITRE-Committee. A strong personal focus has been on improving the situation for consumers in the EU. In this respect, I have been active as the shadow rapporteur for the S&D-group in securing and pushing for everyone’s right to a basic bank account. To have a basic bank account is an absolute necessity in today’s society and I am proud of what we achieved with the current EU-legislation.
Another important piece of work is the revision of the Revised Payment Services Directive (PSD2). The most important feature of this legislation is that banks now are obliged to share customers’ account information with the so called third party payment providers, as long as the customer has given his/her consent. This means that we can increase competition in the payment services markets, and that new players as the fintechs can compete with the traditional banks on a level-playing field. Simply put it, more competition means better financial products at lower prices.
Removing roaming charges has long been a priority issue for us Social Democrats. The work has been ongoing for several mandate periods and many members of our national delegation have actively pursued the issue. I am very happy and proud that roaming charges finally disappeared last year. It is important that the EU can deliver concrete policies that actually make a difference in people’s lives. The roaming issue clearly shows that the EU is an important tool for strengthening consumer rights and it shows how the EU-cooperation can bring positive outcomes that Europe’s consumers can actually benefit from.
2) VoteWatch Europe: According to our data, Sweden has been the closest country to the UK, in terms of voting behavior in the Council. With the departure of the UK from the European Union, how do you think Sweden’s political interests will fare?
Olle Ludvigsson: It is correct that the outcome of Brexit will mean that Sweden will lose an important ally in EU. UK is one of Sweden´s most important trading partners and is the third largest recipient of Swedish services and sixth largest recipient of goods. Regardless of which option will be the result of the withdrawal negotiations, it will mean a deterioration in trade compared to what applies today between the EU and the UK. For me, it is important that we continue building a long-term relationship with the UK so that it becomes as good as possible. Now we are strengthening our relationship with other likeminded Member States such as France and Germany in terms of social and labour rights and an inclusive growth. We will furthermore seek to create new allies depending on sector-specific issues.
3) VoteWatch Europe: Although you have traditionally positioned yourself against deepening the Common Security and Defense Policy, how do you think the European Union, and Sweden in particular, should address the growing threats in its regional neighborhood?
Olle Ludvigsson: Both Sweden and Europe are facing the largest and most complex security policy challenges in a long while. In my country, we have chosen to increase our defence spending to reinforce our national military capability and at the same time deepen our defence cooperation with other countries and organisations. This means that we are not against deepened cooperation; on the contrary Sweden has supported the development of the CSDP and been engaged in developing initiatives such as PESCO, EDF and CARD. I agree with this approach and think it is good that Sweden contributes to the efforts from all member states in reaching our goals as set out in the EU Global Strategy. I believe that Sweden has to be active to strengthen the CSDP while still keeping an approach of intergovernmental cooperation.
4) VoteWatch Europe: In light of the French and German push towards further integration of the Eurozone, what are your thoughts regarding Sweden’s place in a union that is becoming increasingly focussed on the monetary union?
Olle Ludvigsson: Sweden has a strong interest in a well-functioning EMU. The euro countries are Sweden’s largest trading partners and the EMU is a central part of the EU project. I’m pleased that various ways of improving the functioning of the monetary union are being presented in order to avoid future crises, as well as creating economic stability and increased growth opportunities. Yet, it is important to ensure cohesion among the EU’s Member States and that Sweden’s influence over decisions affecting its own country does not diminish. Transparency and good cooperation between euro area countries and other Member States should be encouraged. Still some of the proposals may entail risks since they are highly centralized in nature. The priority should be to effectively implement the economic governance framework during future crisis rather than to establish new instruments and procedures. Further, I have a positive stance on the Banking Union and the Capital Markets Union. Convergence in economic development is important, not least in terms of competitiveness.
5) VoteWatch Europe: According to many analysts, the non-participation of Sweden in the Banking Union influenced the decision taken by Nordea, the largest Nordic bank, to relocate its headquarters from Stockholm to Helsinki. What are the pro and cons for Sweden to join the Banking Union ?
Olle Ludvigsson: I’m personally definitely in favour of Sweden joining the Banking Union. Part of the Banking Union is a common supervisory mechanism. It is the ECB which exercises supervision over the largest banks in the Member States. One of the advantages is that the risks and costs of national bank default is granted by all euro area countries, which increases the incentives of stricter monitoring at the European level. In case of a national banking crisis, Sweden would then be helped by other EU countries. Another argument for participating in the Banking Union is that the national supervisory authorities can be too forgiving towards the national banking sector due to competitive reasons in the internal market.
One disadvantage may be that Sweden will no longer be able to take national supervisory and crisis management decisions with only our own best interests at sight. Another risk may be that Sweden has to participate to rescue banks in former crisis countries that still have a large share of bad loans. However, in the long run, I still believe that the advantages of being a member in the Banking Union outweighs the disadvantages.