Sweden’s right tempers its love for the EU

The Swedish centre-right has traditionally looked positively on the EU as a champion of the free market. But now an increasing volume of regulation from Brussels has led some to take a more critical approach, says Nima Sanandaji of think tank Captus.

Ever since Sweden started debate whether to enter the European Union, the Swedish centre-right has taken a very positive stance towards the EU.

But as an opinion article recently printed in Expressen shows, the younger generation of centre-right thinkers and activists are less ideological and more pragmatic when it comes to scrutinizing EU policies.

The European Union was initially focused on creating free movement of people, goods and services between the member states. The entry of the eastern European member states into the union brought on important and successful free-market reforms.

The notion of EU as a free-market oriented project has coloured the view of earlier generations of centre-right politicians. In fact, one of the main reasons for Swedish centre-right parties’ support for EU membership was the hope that harmonization of policies within the union would nudge Sweden towards the middle grounds of European politics, leading to lower taxes and a reduction in the size of the state.

But EU policies have changed as time has passed. The regulatory burden has increased and created administrative costs for European companies that amount to hundreds of billions of euros annually. The union has increasingly been associated with failing farm subsidies and bureaucracy. At the same time politicians are stressing that the union ought to increase its powers of regulation, implement union-wide social policies and collect taxes.

The changing reality of EU politics has started to make an impression on a new generation of free-market supporters, and as a consequence hard core ideological supporters of the union are no longer as common.

Changing attitudes towards the union among the centre-right have for the past few years been an internal issue, not often expressed in debate. But an article in Expressen on the 14th April changed this, as 50 young politicians and thinkers expressed the view that the centre-right ought to work towards a slimmer union and be able to criticize the less desirable policies of the EU.

A change is occurring in Swedish politics where the EU issue is no longer centred about being positive or negative to membership, but rather about what policies one wants the union to pursue. A new dimension is opening up for political pundits.

Nima Sanandaji is chief executive of think-tank Captus and one of the authors of the article published in Expressen.

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Explained: Why is Sweden so worried about the EU’s minimum wage plan?

EU labour ministers meet in Brussels on Monday to discuss the European Commission's planned minimum wage directive. Why is the proposal causing such unease in Sweden?

Explained: Why is Sweden so worried about the EU's minimum wage plan?
Customers visit a branch of McDonalds in Stockholm. Photo: Stina Stjernkvist/TT

What’s happening on Monday? 

EU ministers responsible for employment and social affairs, including Sweden’s Eva Nordmark, will meet in Brussels for a two day meeting at which they hope to adopt a European Council position on a directive imposing “adequate minimum wages” on all EU countries. Once the Council, which represents member states, has agreed a common position, it will begin negotiations with the European Parliament and the European Commission. 

What’s Sweden’s position on the minimum wage directive? 

Sweden has been, along with Denmark, one of the most vocal opponents of the directive, arguing that it threatens the country’s collective bargaining model, in which unions and employers set wages without government interference. 

But on Friday, the government dropped its opposition, together with country’s umbrella union, the Swedish Trade Union Confederation, arguing that a compromise proposal put forward by the European Commission would protect Sweden’s wage autonomy. 

A majority of the members of the Swedish parliament’s employment committee are backing the government’s new stance, but three opposition parties, the Moderates, the Christian Democrats, and the Sweden Democrats, are opposed to the change in position. 

“I am extremely happy that there is broad support and majority backing for us to continue with the negotiations, to stand up for what we have come to so far, and do everything we can to protect the Swedish wage-setting model,” Sweden’s employment minister Eva Nordmark (S) said after a meeting with the employment committee on Friday. 

READ ALSO: Why Sweden doesn’t have a minimum wage and how to ensure you’re fairly paid

Why did Sweden make its dramatic last-minute u-turn? 

Sweden’s government judges that, after the compromise, the directive will no longer mean that Sweden is forced to bring in a statutory minimum wage. 

“I consider, together with experts in the civil service and experts in the unions and employer organisations, that there is no requirement for Sweden to bring in a statutory minimum wage,” Nordmark told TT. 

She added that agreeing to sign up to the directive would give Sweden the ability to take a deeper part in the negotiations giving it the power to make sure that important exceptions are made for Sweden. 

Denmark, however, is still resolved to say ‘no’ to the directive. 

Surely a minimum wage is a good thing? Isn’t Sweden supposed to be a high-wage economy? 

Sweden is certainly a high-wage economy, but that is largely thanks to its model of collective bargaining, under which wages are generally set by negotiations between employees and employers for each sector. 

If the directive sets a precedent allowing governments, either at a national or EU level, to interfere in this process, or for those who disagree with the result of the collective bargaining agreement to appeal to government entities, it could undermine the Swedish system. 

Who is still worried? 

More or less everyone. While the Swedish Trade Union Confederation is supporting the government’s decision, its vice chair Therese Guovelin, described the European Commission’s compromise proposal as simply “the least bad compromise proposal” the union had seen.

She has previously described the European Parliament’s position that the directive should apply to the entire European Union as “a catastrophe”.

“That would mean that a disgruntled employee who is not part of the union, could take their case to court, and would then end up at the EU Court, and it would then be them who would decide on what should be a reasonable salary,” she explained. “In Sweden, it’s the parties [unions and employers’ organisations] that decide on that.”

Tobias Billström, group leader for the Moderate Party, said he was concerned at the role of the European Court in the directive. 

“There are big risks with this,” he told TT. “The EU court might decide to interpret this directive as applying across the board, and then we might end up with what we wanted to avoid. The Moderates have as a result been against this development, and it’s important that Sweden gets to decide itself on the Swedish labour market.”

What might happen now? 

The European Parliament might try to remove the wording and the exemptions which Sweden hopes will allow its employers and unions to retain control of wage-setting. 

Mattias Dahl, chief executive of the Confederation of Swedish Enterprise, which represents employers’ groups, said that the government needed to stand its ground in the upcoming negotiations, reiterating that he would have preferred that the European Commission had not sought to give itself such a role in the Labour Market.  

Nordmark said that Sweden did not intend to back down to the parliament. 

“These are important red lines for us. If there are demands from the European Parliament that push in a different direction, we can lean on the Swedish opinion and what we stand for,” she said.