Sweden’s Economy – Successful or Sick?

29 maj 2005

Not the least its government likes to portray Sweden as a big success story in terms of growth and employment, and not seldom this is what comes out of EU compatison based on the official statistics available.

But the thruth is somewhat different, and a row inside the trade union federation LO during the past weeks have exposed this in a somewhat brutal way.

By tradition, the economist of LO have intellectual freedom, alhough they are supposed to stay politically loyal to LO and the social democratic party.

Now, however, the limits of this intellectual freedom has been demonstrated as a report on the level of real unemployment in the Swedish economy was de facto supressed and the author left his position at LO in protest at this. As a result, the report has gotten far more attention than would otherwise have been the case.

The official unemployment rate in Sweden is 5,5 %. This is the figure the government likes to give out. It’s considerably above the 4,0 % they have as their target – indeed ”the promise” they have given the voters in the last few elections. That’s bad enough.

But in addition there are 4,4 % of the labour force in different sorts of labour market programs. If you add these two together, the unemployment rate suddenly jumps to 9,9 %, which is very much higher, and doesn’t make Sweden that much different from some of the more problematic economies in Europe.

But what Jan Edling – formerly at the LO – claims is that this figure is way too low. A number of other measures, notably putting people on early pension schemes of different sorts as well as on long-term sickness benefits, should add in the order of a further 10 % to this figure.

That’s dramatic. That means that in the order of 20 % of the labour force is unemployed in the one way or the other.

Not much to boast about – mildly speaking. In terms of employment, the Swedish economy suddenly looks like being far more sick than it is succesful.

The Splits of France on Europe

28 maj 2005

Le Monde.fr : Intentions de vote pour le r�f�rendum sur la Constitution

Tomorrow, France will say its Yes or No to the Constutional Treaty for the European Union.

But already today it’s interesting to see how the campaign has evolved and how the split of France on the issue really looks. The opinion poll in Le Monde today gives some answers.

In political terms, the No side is most strongly supported by the extreme right of Le Pen and the extreme left of the Communist Party. That’s hardly news. The extremes have always came together in their nationalist and nostalgic opposition to European integration.

But the opinion polls makes clear that the decisive support for No comes from the serious split in the Socialist Party, with this poll showing a clear majority of its supporters in the No camp. It’s leadership has failed to secure the support of a majority of its followers, although the party itself in an internal vote in December come out solidly – well, 58 % – in support of the treaty.

Among the supporters of the parties of the centre-right, support for the Constitutional Treaty looks surprisingly solid.

The key conclusion is that in more concrete political terms it is the split in the Socialist Party that’s threatening the position of France.

Crisis Postponed

28 maj 2005

The talks between Iran and the so-called EU3 – France, Britain and Germany – in Geneva earlier this week was a success in the sense that a collapse and a crisis was postponed. Now, the talks will resume after the presidential elections in Iran.

What was decided is that Iran for the time being will remain within the framework agreed in Paris in November 2004 by complying with all its provisions, including those dealing with the suspension of enrichment- and reprocessing-related activities.

It was also decided that the talks should continue, and the EU3 would make more detailed proposals to the Iranians, if possible at the end of July or early in August. It being understood that these proposals will normally cover all aspects under discussion, i.e. everything regarding security guarantees, economic, technological and nuclear cooperation and also political dialogue.

There was another event in Geneva in the week that wasn’t entirely unrelated – the opening of negotiations on Iran’s membership in the WTO, which was one of the points discussed earlier with the Europeans.

We’ll see what happens. The Iranians continue to insist on their right to the entire nuclear fuel cycle, and the EU3 continues to insist that Iran should abstain from any activities linked to the enrichment of uranium as well as to the reprocessing of spent fuel.

In itself this does not guantee that Iran will not seek to produce nuclear weapons – but it would make the time between a decision and a deployment of such a weapon substantially longer. That’s in reality all that can be achieved.

Further on, another regime in Iran might make it possible for Europe as well as the United States to go into far more collaboratibe relationships, which would be good in itself from every conceivable point of view.

A More Ambitious Europe

28 maj 2005

mysan.de – be updated – Former Prime Ministers Call for More Ambitious Europe Ahead of French EU Vote

A brief account of a discussion I had yesterday in the European Parliament in Brussels on the competitiveness of Europe has found its way into cyberspace.

It was a discussion with former Prime Minister of Denmark Poul Nyrup Rasmussen and former Prime Minister of Estonia Mart Laar and myself on what Europe needs to do to grow better and create more new jobs for the future.

I called for structural reforms – the labour market flexibility of Denmark and the flat tax of Estonia are good examples – as well as new investments in research and development.

And we carefully avoided the subject that otherwise dominates everything in Brussels these days – the effects of a No in the French referendum on Sundaty.

Bush and Abbas

27 maj 2005

Bush Praises Palestinian; Tells Israel of Its Duties – New York Times

It seems to have been a good meeting yesterday in the White House as Palestinian president Mahmoud Abbas came to visit.

There is unlikely to have been uniformity of views on everything, but it was clear that President Bush was keen to express as strong a support as possible to the democratic transformation under way in Palestina and to the efforts to prepare for a proper peace process with Palestine.

Divergencies were there in public on the question of Hamas, but more informally it’s obvious that Washington doesn’t really see much of an alternative to the policies pursued on the issue by Mahmoud Abbas.

It’s a question of drawing Hamas into a political process – and then defeating them there.

A good meeting. Hopefully it created a bit of a new momentum. But much will depend on the Palestinian parliamentary elections and the way the Gaza withdrawal is carried out.

Future in Danger?

26 maj 2005

A dangerous game in France###########

Daniel Cohn-Bendit is always worth listening to. Once one of the street leaders of the 1968 student rebellion in France, and since then Member of the European Parliament from first France and then Germany, he is now a leader of the Greens in that Parliament and a vocal debater on most European issues.

He’s distinctly in favour of the new Constitutional Treaty and distinctly worried about the consequences of the No that he anticipates in the referendum on the issue in France on Sunday. And his arguments are worth listening to.

Nothing is certain in an election or a referendum. Opinion polls still indicate that a quarter of the electorate in France haven’t yet made up their minds. There is still hope.

But if there is a No in France there is likely to be a No in the Netherlands three days later and that means, for all practical purposes, that the present proposed Constitutional Treaty is dead. To keep the process alive will only prolong the agony.

This will have consequences of different sorts, although – as Daniel points out – both the world and Europe will go on.The European Union works today and it will work tomorrow, but it has missed a good possibility of working even better in the years ahead.

And that’s really needed. There is a large risk that Europe will be squeezed between the innovation potential of America and the production potential of Asia in the decades ahead.

Only a Europe that moves forward will have the ability to inspire not only its own citizens but also the wider global community.

Saving Sudan – and Africa

25 maj 2005

Annan heads to Ethiopia for conference to boost African Union efforts in Darfur

Everyone is heading for Addis Ababa in order to try to save Sudan.

Everyone? Well, the Secretary General of the United Nations, the High Representative of the European Union, the Secretary General of NATO and a couple of others. It’s a conference to pledge support to the African Union peacekeeping efforts in the Darfur region of Sudan.

Good and worthy and nice in itself. The African Union certainly needs the support it is given. And there is most certainly a need for the AU peacekeeping forces that are now in Darfur and that will, at least according to plans, increase to 12 000 towards the end of the year.

But in itself this will not solve the situation. Stabilize, perhaps. Solve, distinctly not. You can stabilize with a military mission of this sort, but in order to solve you need a political process.

At the moment, there is hardly anything worthy of the name in Darfur.

The different rebel movements seems, according to the UN representative there, to be more interested in travelling around the world than in attenting peace talks. And there are obvious strains between these people and those actually doing the fighting on the ground in Sudan.

As long as this remains the case, there will be no peace worthy of the name, and that irrespectively of what the government in Khartoum is doing or not doing. It take two to tango – or to test the seriousness of each of them to the dance.

At the end of the day, everything is linked to the process with the implementation of the peace agreement between the South and the North of Sudan. That’s the really big story for the coming years.

The UN has just started to deploy the beginning of a peace force that will build up to app 10 000 men and women in primarily the South of the country. It will in all probability be the biggest, most challenging and most important UN mission in the years ahead.

Also here, the political process is paramount.

In six years time there will be a referendum in Sudan on whether they want to stay together or split up with the South and the North going different ways. It’s a very short time to demonstrate that a common future might actually work.

A breakup of the biggest state in Africa will have far-reaching consequences in the region. There might well a serious aggrevation of the tendencies towards disintegration in the entire region immediately to the South of the Sahara – from Somalia to Sierra Leona. Large parts of the region will be hovering on the brink of genocide.

The future of Sudan is of immense importance for the future of Africa. It’s the biggest country of the continent – bordering on no less than ten other states. Its diversity in terms of cultures, traditions and languages is vast.

I hope that the discussions in Addis Ababa will not only the the usual beauty contest between international organisations on who can to the best to provide planning and logistical support to the efforts of the African Union. That’s certainly important – but no more than the beginning.

There needs to be a proper political process. In Darfur – that’s the most immediate challenge. In Sudan as a whole – really making certain that the peace agreement works over the years to come.

And a clear strategy from international actors on how to prevent the catastrophies that are likely to flow out of a gradual disintegration of important parts of Africa.

It might be there – in which case it remains a deep secret. An even deeper secret would be to absence of such a strategy.