The forging of a UK-Nordic-Baltic bloc

nordic bloc

The next annual UK-Nordic-Baltic summit will take place in Riga on 28 February 2013. The first summit was the initiative of British Prime Minister David Cameron and took place in London in 2011. Last year, the UK-Nordic-Baltic summit took place in Stockholm, where its name was changed to the Northern Future Forum. This year, the summit will focus on the green economy and the digital divide. However, the institutionalisation of a “Northern bloc” may be a more important outcome of these meetings than the topics on the official agenda.

In January 2011, David Cameron initiated and hosted the first UK-Nordic-Baltic summit, which saw politicians, policy-makers, thought leaders and business leaders gather for two days in an informal setting to discuss economic growth and job creation. The summit in London was attended by the Premiers of Norway, Sweden, Denmark, Finland, Iceland, Estonia, Latvia, Lithuania and the UK. Cameron explained what these states have in common and what they can achieve together: ‘Right across the North of Europe there stretches an alliance of common interests. We get enterprise. We embrace innovation. We understand the potential of green technologies for economic growth. So at a time when much of Europe is in desperate need of fundamental economic reform, it makes sense for us to come together for the benefit of all our economies: an “avant garde” for jobs and growth.’

That a Tory Prime Minister expresses affinity with the Nordic Model should not come as too much of a surprise given the relative economic success of these countries over the past number of years, as well as their ability to carry out far-reaching reforms to the welfare state and budgetary policy. Cameron has had a close friendship with the Swedish Prime Minister, Fredrik Reinfeldt, for many years and has looked to Nordic countries for ideas on education, cutting public spending, the development of the digital sector and the use of green technology for economic growth. The annual summits are therefore designed to serve as catalysts for sharing expertise and best practice among countries that face similar economic and social challenges. Participants at the first UK-Nordic-Baltic Summit discussed technology and innovation; jobs, family and gender equality; and the green economy and sustainable business. At the 2012 meeting in Stockholm, the renamed Northern Future Forum focused on the role of senior citizens in the labour force and the role of women as entrepreneurs and leaders. The two key issues at this year’s summit are: “Can green economy be competitive?” and “Addressing the digital divide”.

Perhaps the most important question does not feature on the Forum’s agenda: Is this grouping of Northern states designed with a longer-term strategic purpose in mind? Has the UK successfully forged an alliance with other “awkward partners” of Brussels?

The Nordic and Baltic states cover the entire spectrum from minimum to maximum EU integration: Norway is outside of the EU, Iceland is negotiating its way in, Denmark and Sweden have opted out of the Euro, Latvia and Lithuania are single currency “pre-ins”, with Finland and Estonia being the only countries in the group inside the Eurozone. Nevertheless, the Nordic countries in particular could be valuable allies of the UK over the coming years as the UK seeks to renegotiate the terms of its EU membership and obtain safeguards against Eurozone caucasing. The Nordic states and the UK tend to take a similar stance on many EU issues. Most recently, Sweden, Denmark and Finland refused to sign up to the EU’s Financial Transaction Tax. Sweden and Finland joined Britain to push for a budget cut during the negotiation of the EU’s Multiannual Financial Framework. Perhaps most importantly for the future agenda of the EU, the Nordic states also share the UK’s concerns that closer Eurozone integration will undermine the fundamental structure of the Union.

Within the EU, the seven Member States in the group could cooperate to bring about greater budget discipline, a lighter regulatory burden, and more focus on competitiveness and increased free trade. At the first summit in London, Cameron gave his vision of how the states in the group could work together in Europe to drive economic reform: ‘I want to see action on economic reform by Europe as a whole, on trade, on regulation, the single market, on innovation, but I believe the UK, Nordic and Baltic countries can be the avant-garde’. On foreign policy, some of these Member States favour a close transatlantic relationship and a strong role for NATO. They remain more wary of Russia than many EU Member States and have been strong supporters of enlargement and the Eastern dimension of the EU’s neighbourhood policy.

Although there has been no hint from London of a deliberate effort to forge a long-term alliance, Finland’s Foreign Minister, Alexander Stubb, was forthright in describing Cameron’s initial summit in 2011 as a “smart move”: ‘He’s looking for allies in the EU. Small member states are always flattered when approached by big member states’. As Nordic and Baltic countries step up their cooperation with the Visegrád Four (Poland, Czech Republic, Slovakia and Hungary), the UK could be tapping into a valuable network of allies within the EU. And it is not only the Conservatives that are seeking to increase engagement with potential EU allies. Last week (beginning 18 February), Ed Miliband and the Shadow Foreign Secretary, Douglas Alexander, visited Sweden, Denmark and the Netherlands to meet social democratic leaders in each country. Speaking ahead of his trip, Miliband stated: “I will be talking to allies across Europe – in Denmark, Sweden, and Holland – about how we change it to make the EU work for working people and help us all begin building for the future.”

Now in its third year, the UK-Nordic-Baltic Summit has become an institutionalised forum for its nine participating states. It remains to be seen what impact this grouping will have on the EU’s long-term agenda and to what extent the Nordic and Baltic states will prove to be useful partners for the UK as it seeks substantial EU reform. Loose sub-groups already exist within the EU – for example the Visegrád Four and the Weimar Triangle – but this northern grouping is exceptional because of the disparate historical experiences and EU integration ambitions of its nine members. However, if the situation in the EU’s southern periphery deteriorates further, the ideas that emerge from the annual Northern Future Forum may become ever more influential within the Union.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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