Sweden 'won't block' pact to save euro

Sweden was one of four European Union member states to scupper hopes of a 27-country agreement to help strengthen the euro, but nevertheless plans to participate in the creation of a European bailout fund.

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Speaking with the TT news agency on Friday morning, Swedish prime minister Fredrik Reinfeldt also expressed doubts about the likelihood of Sweden agreeing to abide by the pact, which was forged by the 17 eurozone countries, and which six other EU member states had at that time elected to support.

“It's not that Sweden, which isn't a member of the euro, wants to tie itself to rules which are completely tailored for the eurozone,” he said.

“The whole text is written to make eurozone members submit to certain restrictions and do certain things. A non-eurozone country can't reasonably sign up to that.”

Following an intense night of negotiations, Sweden, the UK, Hungary, and the Czech Republic refused signal their support for a deal requiring tighter fiscal discipline among the eurozone countries through changes to the current EU treaty.

Hopes for a deal stumbled in part over the UK's desire to include protections from future financial regulations that would have accompanied the treaty changes proposed by Germany and France.

While Britain and Hungary at first refused to sign on to the deal, Sweden and the Czech Republic had requested time to consult with their respective parliaments before agreeing to the new pact.

As a result, the 23 remaining EU members states agreed to forge an agreement for rules that would penalize fiscal profligacy and to increase resources available to bailout troubled EU economies through additional pledges to the International Monetary Fund (IMF) and the establishment of a new European bailout fund.

Later on Friday morning, however, Reinfeldt received clearance from the Riksdag's EU committee to approve the protocol changes agreed to by the eurozone countries, meaning Sweden has no plans to stand in the way of the deal.

Specifically, the committee approved Sweden's participation in a loan from the International Monetary Fund (IMF) that will help support a European bailout fund.

The committee also agreed to having Sweden support changes to the EU treaty that allow for countries that mismanage their economies to be punished, but stopped short of having Sweden abide by the new rules.

The question of the size of Sweden's contribution remains up for negotiation, according to the Europaportalen.se, a Swedish news website focusing on EU politics.

“We're not saying no. We think it's good that the eurozone countries have come up with something in all this chaos and we're not going to close the door on the eurozone countries as they try to put their economies in order,” EU committee vice chair Marie Granlund of the Social Democrats, told TT.

Liberal Party (Folkpartiet) MP Carl B.Hamilton, chair of the EU committee, was highly critical of the UK, which has refused to support the pact.

“They're splitting Europe. Great Britain has acted in an nonconstructive way. 'Unhelpful' as they say in English,” Hamilton told Europaportalen.se.

While there is no indication that Sweden plans to join the 23 other countries which have so far agreed to abide by the new budget rules, the possibility remains open that Sweden could join at a later date.

“We'll have to see what is actually meant by joining voluntary. We can't have any overoptimistic hopes that we can affect politics for the whole of Europe. But if we join, we can protect ourselves against having other countries make decisions that could injure us,” said Hamilton.

While Hamilton indicated his Liberal Party was open to Sweden eventually joining the pact, Granlund said the Social Democrats remain opposed.

“It would conflict with what the Swedish people have said in the referendum. It would mean an all to large involvement in the Swedish economy,” she told Europaportalen.se.

Exact details of the deal remain to be worked out in the coming months and will be enshrined in an international agreement parallel to the EU's current treaty.

However, the goal remains to eventually have the changes included in the EU treaty.