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‘It is southern Europe’s problem’: Reinfeldt

‘It is southern Europe’s problem’: Reinfeldt

Published: 11 Jun 2012 16:59 GMT+02:00
Updated: 11 Jun 2012 16:59 GMT+02:00

Prime Minister Fredrik Reinfeldt said on Monday that Sweden is relatively safe from the Spanish crisis as the country mainly trades with countries like Germany, Britain and Norway.

“It isn’t Europe that is in trouble. The situation affecting southern Europe is not the case in northern Europe,” Reinfeldt said to news agency TT.

“But of course it is true that the problems experienced in the Eurozone will affect us too," he said.

Therefore, Reinfeldt thinks it is important that the Eurozone not just solve their problem, but that they do it in the right way and see what’s at the core by looking to improving the continent's competitiveness,” he said.

Ultimately it is about dealing with financial problems and mounting debt in countries where resources are limited. Reinfeldt also called for demand to be stimulated both through domestic consumption and through exports.

“All this has to be achieved and these are solutions on a national level.” Reinfeldt said.

Reinfeldt hopes that it will be possible to avoid negative effects in Sweden, on interest rates and the labour market.

“We don’t want a market evaluation of us in Europe where we are not judged on our own merits,” said Reinfeldt.

Reinfeldt also called for the Spanish banks' shareholders and creditors to face up to their responsibilities.

Only once shareholders and creditors have acted would it be appropriate for state support to be made available, he said.

“And not until the third stage should it come down to stabilization mechanisms and then states can apply to be considered. A fourth possibility is that the banks themselves can apply” he told TT.

TT/The Local/rm


The Local (news@thelocal.se)

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Your comments about this article

18:11 June 11, 2012 by skatty
I wonder if Reinfeld consider "Iceland" in north of Europe or south! As a matter of fact Iceland has been one of the first countries which have collapsed after 2008 depression.

I suggest Reinfeldt to wait for couple of years, and will see how much the whole Europe is going to collapse!
07:14 June 12, 2012 by Marc the Texan
Maybe he's just saying this to keep everyone calm. But the EMU will soon be not much more than a smoking crater. That includes Germany. When you live next door to that sort of thing, it tends to affect you.
09:53 June 12, 2012 by Twiceshy
> "It isn't Europe that is in trouble. The situation affecting southern Europe is not the case in northern Europe,"

but then...

> But of course it is true that the problems experienced in the Eurozone will affect us too

So it is Europe that is in trouble after all...
13:06 June 12, 2012 by Breizh
The eurozone must go towards more federalism in order to survive. The greatest problem is that the European Union is, from the beginning, a project without clear goals besides generating peace and economic growth, the creation of the euro was a step forwards to achieve these two goals, but not the "supreme" achievement.

With almost 3 years of economical crisis many forgot the the currency has been a driving economic motor for the euro-members, not the least for Sweden which export goes mainly to the common market. It has been euro-skeptic parties that weakened the EU, not the currency itself.

We need a financial union and competent supranational institutions to rule the common market, this is basic economics. For many it would mean the end for european nations' sovereignty, I ask you, what is sovereignty now? The exclusive right to mint coins? we have a common currency. To chose a specific foreign policy and eventually wage war? most countries are NATO members and/or follow the european foreign policy.

That people like it or not the world is globalized, we share common benefits and challenges. Thus a federal europe shall be a driving motor for regional economic growth, leading, on the long term, to welfare for each state and making the EU a real actor in the world.
15:27 June 12, 2012 by javiergrozas
iam a spanish citizen.i own a summer house in sweden.unfortunately in my country too much peple earned money some years ago with no control.now most of residents are paying consequences.our crisis is similar to iceland and sweden crisis some years ago.the main difference is the way to fix problem.everybody in spain would like to do like your goverment did in sweden or iceland.now spanish people will pay few rich people ambition with enormous efforts.i am seeing some kind of things that i never thought to see.people is really suffering like a third world country.

iam thinking about running away from my loved country.
04:17 June 14, 2012 by Marc the Texan
If Spain drops the euro and goes back to the peseta, growth would restart immediately. Spain will be still have high unemployment and a much lower standard of living for years though. Nothing can can change that because the damage is already done. The longer Spain stays in the Eurozone, the longer the economic paralysis will last. Every additional day with the euro puts Spain and the rest in a deeper hole.
09:30 June 14, 2012 by Breizh
@Marc the Texan

If Spain, Europe's fourth largest economy, return to the peseta the UE is over. Many European banks are highly exposed to the Spanish debt, if they fall apart it the whole system follow, Europeans shall then see their purchasing power dropping drastically so the Spaniard won't be able to sell their goods on the common market, where the major part of its export goes. What worked for Iceland cannot work for a big state member of the eurozone especially since the structural reforms done in Iceland are far to be as good in Spain.
14:37 June 15, 2012 by Twiceshy
Breizh even if that's true, at least it's more reasonable than fixing a debt problem with more debt (because all the bailouts do is increase the amount of debt in exchange for a little bit more time).
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