For the third time since joining the European Union, Sweden is taking over the rotating presidency of the EU Council, one of the bloc’s co-legislators.
For the next six months, the Nordic country will be tasked with setting the political agenda and steering the debate among member states, a hard job that has become even harder in the midst of multiplying crises.
The new right-wing coalition government, made up of three parties and led by Prime Minister Ulf Kristersson, has promised to uphold the bloc’s fundamental rights and maintain the political unity forged in the wake of Russia’s invasion of Ukraine.
But the support the far-right Sweden Democrats are lending to the minority coalition has cast a shadow over the presidency’s inauguration, with experts and diplomats wondering how much the Eurosceptic party will make its presence felt at the EU level.
Stockholm insists the Sweden Democrats are not part of the government and the confidence-and-supply agreement focuses on domestic matters, not EU policy.
“The Swedish Presidency will be an active one, and will offer constructive leadership to deepen the EU’s strengths and find compromises,” Kristersson told the national parliament, the Riksdag, last month while presenting his government’s programme.
“We will safeguard common European interests, and be humble in the face of the member states’ diversity.”
Among the many challenges and predicaments besetting the bloc, Sweden has chosen four overarching topics as the main priorities for its six-month presidency: security, competitiveness, energy and democratic values.
On security, Stockholm wants to ensure EU countries keep intact – or even step up – the economic and military support for Ukraine. Brussels is under pressure to make good on its promises after having failed to deliver the entire €9-billion envelope of financial aid that was promised to Kyiv in 2022.
For 2023, the EU is expected to disburse €18 billion on a regular basis, money that is vital to cover Ukraine’s ballooning budget deficit and sustain the most basic public services.
On top of that, Sweden will lead the discussion on the intricate question of confiscation: the EU intends to sell and re-invest the Russian-owned assets that have been frozen across nine rounds of sanctions in order to raise extra funds for the reconstruction of Ukraine.
But the idea, which could potentially target the €300 billion of international reserves held by the Russian Central Bank, is deeply complex and faces a myriad of legal and practical obstacles.
Competitiveness will also feature high on Sweden’s agenda.
The need to preserve Europe as an attractive destination for foreign investment has acquired an almost existential dimension after US President Joe Biden signed the Inflation Reduction Act, which is set to inject green subsidies to the tune of $369 billion (€349 billion) into the American economy.
The act, which favours American-made products, has been met with strong condemnation in Europe and raised fears of a transatlantic trade war.
Some EU leaders, such as French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni, are pushing for a strong countermove and demand a review of the bloc’s decades-long state aid rules, which are meant to ensure fair competition between small and big member states.
Sweden, a staunch advocate for free markets, has taken a more cautious approach to the hot-button issue.
“Protectionism is not the way to go. It wasn’t yesterday, and it won’t be tomorrow – on this side of the Atlantic or the other,” Kristersson told the Riksdag.
“We know that innovative companies in a free and open market not only generate growth and welfare, but also lead the green and digital transitions,” he added. “But in truth, the EU is lagging behind. Clear competition policy and better regulations for European industry are therefore necessary.”