The Diplomatic Dispatch

The British Ambassador to Sweden blogs on The Local

EUROPE: Banks, Bonds, Bailots… and Bach

You’re probably thinking the last thing I want to read is another piece about the eurozone even if it does appear to include something about a great composer.

If you persist till the bottom of the blog you’ll discover that a famous Swedish diplomat was entertained to an impromptu concert by a famous English cellist in the residence yesterday.

But given the importance of what’s being discussed in the EU at the moment, for Britain and Sweden, I hope you’ll forgive a more substantial blog (and forgive the interval since the last one). Given that Britain’s position on EU issues is, shall we say, not always perfectly understood, I thought it worth setting down our views in seven quick points.

The first thing to say is that it is in the UK’s interest for the EU to be effective, credible and prosperous. Membership of the EU is in the UK’s national interest.  Being part of the EU is vital to how we in the UK create jobs, expand trade and advance our interests around the world.

Second, the euro zone is a critical part of the EU, in both senses of the word. The fate of the eurozone matters hugely to the UK. The UK Government is clear that it is strongly in Britain’s interests for our biggest export market, i.e. the EU and within that the euro zone, to succeed.  The risks for us of a disorderly outcome are huge.  Resolution of the eurozone crisis would do more than anything else to give our economy a boost.

Third, Europe needs to deal with the wider challenging of modernising our economies, as well as the immediate one of addressing the eurozone crisis. The UK is supportive in principle of radical steps for eurozone countries to address their problems, for example a banking union for the euro zone.  But we’re also clear that while this might be the answer for the eurozone it is not required for the single market.  So while we support a banking union for the Euro zone, the UK will not be part of it. We’ve taken our own steps to underpin and oversee our banks.

Fourth, whatever happens in the eurozone needs to respect the rights and responsibilities of all EU member states, large or small, inside our outside the euro, not least to protect the integrity and promote the development of the European Single Market, which is crucial to growth in the UK and Sweden.

Fifth, the inevitable pre-occupation with the Euro zone crisis must not obscure the underlying requirement to focus on restoration of sustainable economic recovery. Growth is vital to get the European economy going again. The Single Market is the best engine we have for doing that.  The Swedish and British Prime Ministers set out, with ten EU colleagues in February, an ambitious agenda for development of the Single Market, which was embraced at the last Summit in March. We should make progress on that and also make sure Europe remains open for trade – launching free trade negotiations with Japan and making progress on a possible deal with the US and on negotiations with Canada, India and Singapore.

Sixth, we are open to how existing EU instruments and funds can be used to support growth. And a reprioritised and modernised EU budget should be used more effectively to promote economic growth, but within the current levels of spending given the tough measures being taken around Europe to ensure fiscal sustainability.

Seventh, ultimately, however, as Sweden has already shown, there is no avoiding the primary responsibility of member states to take the difficult decisions needed to reform and rebalance their economies.

Now, as promised, the anecdote: Jan Eliasson came to lunch yesterday so we could discuss his new job as Deputy Secretary-General of the UN. He and I worked together when he was President of the General Assembly (the parliament of the UN) in 2005-6.

Staying with us for a few days while he plays at a music festival here is the great English cellist, Steven Isserlis. Steven was rehearsing as Jan arrived. It turned out the cello was Jan’s favourite instrument (“mine too”, said Steven). He (Steven, that is) played us a wonderful Bach Sarabande, a moment of tranquillity in an otherwise hectic day!

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