JOINT COMMITTEE ON EUROPEAN UNION AFFAIRS debate -
Wednesday, 7 Mar 2012

Exchange of Views with Swedish Parliamentarians

Chairman

I remind people switch off their mobile telephones. It is not enough to put them on silent because that causes interference.

I am pleased to welcome to today's meeting a delegation from the Swedish Riksdag which is visiting Ireland at the invitation of the Ceann Comhairle, Deputy Seán Barrett, and the Irish Parliamentary Association. The leader of the delegation is Her Excellency, Ms Susanne Eberstein, who is the deputy first speaker of the Swedish Riksdag. She is accompanied by Mr. Hans Backman, Ms Emma Henriksson and Mr. Sven-Olof Sallstrom. The delegation is accompanied by Her Excellency, Ms Elisabet Borsiin-Bonnier, who is the Swedish ambassador to Ireland, and by Mr. Salim Tarazi from the Speaker's office.

The delegation has expressed an interest in exploring EU policy with us and the role our committee plays in EU affairs. We are all aware this committee has responsibility for scrutiny of EU draft proposals for the proper transposition of EU legislation into Irish law and for holding the Government accountable for the decisions taken by Ministers at Council meetings. The Joint Committee on European Union Affairs focuses also on matters concerning the strategic direction of the EU and on optimising its influence on framing that agenda.

Of course, we are also leading the debate nationally on the forthcoming referendum on the fiscal compact treaty. While Sweden is not a member of the euro, it has signed up to the treaty. Our members will be very interested in exploring with the delegation the views of the various parties in the Swedish Parliament on the treaty and also the attitudes of the Swedish population to it.

We will also be very interested to hear how Sweden resolved its crisis in the banking sector in the early 1990s. As the delegation will know, we currently have a significant banking crisis. We are very keen to learn how Sweden resolved its crisis and has become one of the most successful economies in the European Union. On that note, I hand over to the deputy first speaker and invite her to make her opening remarks.

Ms Susanne Eberstein

I thank the committee members for their warm welcome. We are very pleased to be the guests of the Parliament. In the European Union, it is very important to meet politicians from other member states. We share many problems and many good things in the European Union so it is important that our countries, which are similar in size, can really be friends. We really feel the crisis in Ireland. I was part of the crisis solution in Sweden in 1994 and 1995. It was a hard time and it is difficult to look into the future happily but Ireland must do that. When one does things that are very hard for the population, one must think that it will be good for the future. That is very important. We share the problems in national parliaments but we will also solve the problems in the European Union together. If Ireland has problems, we have problems. We must be friends and we must shape a good, new, strong European Union for all member states. That is very important.

In the Swedish Parliament, we had a European Union committee, which permitted the Government to say "Yes" or "No" to measures in Brussels. If the Parliament said "No", the Government had to obey. The Swedish Parliament has much influence in EU questions, which is important. Countries have solved this situation in different ways but the Swedish way is rather good. I was the Deputy Chair of the European Union committee while I was in opposition. We were hard on the Government, which is a good thing because it needs support when going to Brussels. Sweden has a small voice and we must be united with Ireland and other small countries. It is very good for the Government to have the Parliament behind it. How Ireland solves this situation is important.

Ireland will have the Presidency next spring and we are very curious about what Ireland is planning. It would be very nice to hear what this is. The crisis in Sweden was very deep and hard but, as a welfare state, when we took away benefits for children, widows and pensioners, it was from a rather high level so perhaps it was possible to do so without outrage from the people. Greece is having a hard time and perhaps people cannot eat or rent a house and then it is very difficult to be content with hard times. In Sweden we had to discuss this with people and explain it to them. It is important that people are involved in this situation. We managed that and our Prime Minister at the time was very good at explaining. When he went to the US to borrow money for Sweden, it was humiliating and he expressed his humiliation. It is important to involve the population.

Deputy Timmy Dooley

I thank the delegation and welcome it. I echo the sentiments about the close relationship our countries have and how much we can learn from the experience in Sweden of a collapse of the banking sector. There has been dialogue between the Parliaments at committee level, among Governments and at official level in dealing with it. Sweden has shown support for us during the bailout programme. Sweden participated at a bilateral level, which is accepted and appreciated as a show of solidarity, strength and recognition that Sweden understood what Ireland was going through and was prepared to provide support.

Ms Eberstein referred to the strength of the Parliament with regard to the Executive. I have looked into this in the past in respect of the mandate provided to negotiators when they enter the European realm. We could learn a lot from that. It is well recognised that our Parliament is weak by comparison to others, which is unfortunate. It is the way we were formed and we have talked about reform over time. We could look to the model developed by Sweden in terms of providing that strength. It should be seen as a strength rather than a weakness of the negotiating position of Executive members when they enter the realm of the European Union. Perhaps the delegation can talk more about how it managed transitions. Although Ms Eberstein referred to having high social welfare rates, regardless of the size and scale of any particular welfare payments, a reduction causes real problems for those affected. Can we hear some more examples of this and the issues that arose in terms of communicating the message to the public?

I recognise that this is entirely an issue for the Swedish Parliament and Government. Sweden removed its permanent representative here, which is an internal issue. We had a very good relationship with previous ambassador, who was a regular attender at meetings of the committee dealing with European affairs. He provided much assistance to us and we would like Sweden to consider recognising this and reopening the permanent base here. It was a great source of connection for us and one we treasured.

Deputy Paschal Donohoe

I welcome the delegates to Ireland and to the Houses of the Oireachtas. Deputy Dooley touched on one of my questions, the depth of change within Sweden and gaining the consent of people to support changes. What is the attitude and view of the delegation to the fiscal compact? Although Sweden is not a member of the eurozone, it is proceeding with the implementation of the fiscal compact. What support does a measure like that have across all political parties in the Parliament? Why is there an interest in implementing such a measure within Sweden?

My next question concerns the attitude to the euro in Sweden. I had an opportunity to touch on it earlier but I am interested to understand the view in Sweden of the euro and the view of how Europe has responded collectively to the crisis with which we are grappling.

Deputy Joe O’Reilly

I welcome the delegation and I hope members thoroughly enjoy their time here. I agree with the basic proposition by Ms Eberstein that it is important there is a good relationship between our countries and between small states in the EU. We have a community of interests we should work on.

The first question is closely related to the last question of my colleague, the Vice Chairman, Deputy Donohoe, on the fiscal compact treaty. I, too, am interested to hear the delegates are endorsing the treaty. It is much acknowledged in Ireland that Sweden has a good state apparatus for providing social services to people and good infrastructure. I greatly enjoyed a visit to Stockholm and found it fabulous. The public transport system and all the public services are legendary for their quality. Given that Sweden has this tradition and a good welfare system, how do the delegates reconcile their approach with acceptance of the treaty? It is the correct approach. There are people trying to portray the treaty, misguidedly and incorrectly, as an austerity treaty; it is a treaty supporting reasonably balanced budgets. I would like the delegates to comment on how they reconcile the two positions. Clearly they are adopting a different view from those who allege the treaty is austere.

It is important that we have a job strategy in the European Union. It is particularly important in Ireland considering that it has a considerable problem with unemployment, including youth unemployment. This is the main item on the agenda and the problem that needs to be addressed most radically and quickly. What is the delegation's view on a Europe-wide job stimulus package? How supportive of it is it and what does it believe can be achieved in this regard at European level? We should be moving onto this agenda now. I am interested in the jobs question.

With regard to the Swedish banking crisis, Deputy Dooley stated there had been significant contact between our two countries. What do the delegates believe in retrospect were the best strategies to deal with the banking crisis? What were the best strategies for achieving credit flow? Achieving credit flow is a particular difficulty for small businesses in Ireland. It is important that we work together. I am interested to hear the delegates' comments.

Chairman

I am not sure who wants to respond to those questions. There were quite a few. I realise the delegates have a meeting with the Minister at 3.10 p.m. Since other members want to ask questions, I ask that the delegates limit their responses to ten minutes. Their doing so would be very helpful.

Ms Susanne Eberstein

We are sorry we had to shut down the embassy. However, the Swedish ambassador is present. She is stationed in Stockholm but I can assure the members she is very keen on Ireland.

The Swedish are very sceptical about the euro. Many believe the country was saved by standing outside the eurozone. We had the capacity to devalue and implement other such fiscal measures.

We must have a referendum again, as promised. We had a referendum and the people said "No" and we honoured this outcome. There will be another referendum before we join or say "No" again. We will wait for between three and five years before we have another.

The finance pact does not concern Sweden because it is not in the eurozone. However, we are keen on taking part in the European Union always, and it is better to be inside than outside. We have a control mechanism already in Sweden. Therefore, it is very good to talk about the matter with our friends in the Union.

With regard to the finance pact, the budget procedure in Sweden was a result of our crisis in the 1990s. The Riksdag uses a special decision-making procedure known as the framework model when considering the budget Bill and counterproposals. That is very important. It means the Riksdag first takes a decision on the overall size of the budget and how much to allocate to each of the 27 expenditure areas. All expenditure limits and tax changes are treated as a single package and alternatives from the Opposition parties are also presented as single packages. This means that Opposition parties, to which I belong at present, cannot form a majority on a single issue in the budget and use this to reject a proposal. The Opposition must agree on a whole package of proposals on the legislative agenda.

This spring, some Bills will probably attract more attention than others and lead to heavy debate in the Chamber. The implementation of the European Union data retention directive is one item on the agenda. The budget is dealt with very strictly in the Riksdag so I cannot have all my wishes met. I must take the package or leave it.

The greatest problem, which is very serious, is unemployment in all European Union countries. We are part of Europe and must solve the problem together. The problem is moving around in our countries. It is a very serious issue for member states and every other country.

As a member of the Swedish Opposition, I ask the Liberal People's Party delegates, who are in government, what they are doing to tackle unemployment in Sweden.

Mr. Hans Backman

That question is very important. It is very important to connect the education system to the labour market in addressing the crisis. We must give young people the opportunity to obtain a good education and finish it with a satisfactory grade so they will be competitive in the labour market when they search for work. We are engaged in major reform in the school system, including technical education reform, to enhance the opportunity to study at university. The education system will be more for everyone, irrespective of the path one wants to take in life. We try to stimulate pupils so they will start their own enterprises when they leave school. It is very important for us to develop the education system.

Ms Susanne Eberstein

Being in opposition in a time of crisis, I contend it is very important to be united. We were united in the 1990s but now we are not because we do not have a crisis as great as that facing Ireland.

Chairman

Ms Susanne Eberstein has the luxury of being in that position.

Ms Susanne Eberstein

My party, the Swedish Social Democratic Party, has other solutions. I will not elaborate on them, however, because there are representatives from the Swedish Government present. It is important to be united during a crisis.

I was asked about the Swedish banking system in the 1990s. We had to take over one of the big banks in Sweden, Nordea. It cost a lot of money. We had to sell properties of the bank. It was a very hard time. There was a special Government company selling out and cleaning the bank. The process was very expensive for the taxpayer. After some years, however, we got the money back. I do not think the taxpayers suffered that badly but at the time it was hard. We had no choice, we had to do it. When one has no choice, one takes responsibility and fixes it, even if it hurts.

Chairman

We have started to plan for our Presidency. As this is our eighth time to hold the Presidency, we can draw on our institutional memory. We are talking to the countries that have recently held the Presidency, so that we have consistent and complimentary themes.

Next year will be the 40th anniversary of our accession to the EU. One of the key issues during our term of office will be to deal with unemployment. This committee will examine youth unemployment, as we and seven other European countries have a very high level of youth unemployment and action plans are being put in place. We will be looking to create sustainable growth.

In regard to fiscal matters, there is a view that the euro has turned the corner and the issue with the firewall should be cleared up by the end of the month. We want to focus our attention on how to stimulate growth and I imagine this will play a large part during our Presidency.

Senator Terry Leyden

I welcome the members of the delegation to our meeting. This visit should prove useful to them as one learns more from meeting people, in and outside Parliament. During the course of their visit it is important to get a feeling of what is happening on the ground. When our parliamentary delegation visited Sweden, we were very impressed by Stockholm, and the way the Swedish Parliament was run. The Swedish Parliament is a very democratic and well organised institution. We heard a great deal about the Swedish model three years ago. The National Asset Management Agency, NAMA, was based on a Swedish model.

I organised agricultural education tours from Sweden. A feature of the then Swedish tax code, I do not know if it is still available, was a tax concession for educational tours in other European Union countries. That was very useful to those who wanted to come here. They were fascinated by our rural areas in County Roscommon. I believe there is great potential for mutual tourism between Sweden and Ireland. Sweden is a beautiful country but the problem is that there are no direct flights from Stockholm to Dublin.

Sweden is very advanced in the use of alternative and sustainable energy. Scania trucks have a great reputation as they are very reliable. The Scania Ireland headquarters are located in Strokestown, County Roscommon, and it has many agents through out the country. The company assisted the Famine museum in Strokestown House.

Ireland and Sweden have a good relationship, as both countries have a tradition of good relations with each other. That is why this visit is important and it is important that our Members visit Sweden. There is a huge potential to develop group tourism from Sweden to Ireland.

Deputy Dara Murphy

I welcome the delegation. I had the pleasure of meeting Ms Emma Henriksson for a brief meeting. On Monday I met Mr. Gustav Blix, who is also a member of the Parliament at a meeting.

We had a very strong discussion at one of our recent committee meetings about Swedish laws on sex trafficking and prostitution, which is believed to be the best model of legislation in Europe. I assume the delegates support the view we have formed. It is of note that the work that has been done by the Swedish Parliament over the past ten years is acknowledged as a model for other European countries to emulate. That is being resisted to a large extent in countries such as Germany and the Netherlands, which is unfortunate. I would appreciate if the delegates would comment on that.

I wish to raise the issue of European governance. As the delegates may be aware, we are due to hold a referendum on the fiscal compact. We have seen a significant development of bilateral European leadership from France and Germany. For smaller countries, such as Ireland and Sweden - although Sweden is much bigger than Ireland, relative to France, Britain and Germany - which are a bit isolated from the centre of Europe, and are very dependent on export led growth, our competitiveness is vital for our survival. Will the delegation comment on how Europe is governed and the concept of a directly elected President? Does the delegation believe there is significant room for improvement in how the other European countries co-ordinate with each other to ensure the European model does not move towards a so called "Merkozy union", one that is lead from the centre rather than by the broader membership?

Deputy Bernard J. Durkan

I join in welcoming our guests, with whom we have an affinity. We watched with interest Sweden's efforts to resolve its debt problem arising from changing economic circumstance outside its control. As Ms Eberstein said, the Parliament took responsibility and taking responsibility is what it is all about. A great deal of discussion has taken place throughout individual member states on the crisis but time is being spent on issues that do not affect that.

Each country in the European Union has a role to play in the future. Each country has an equally important role, regardless of its size. It is important that each country is committed to the original vision of the EEC. If we move away from that, the Union will deteriorate very rapidly and we will find ourselves in a divided Europe once again.

In regard to one or other country speaking on behalf of the European Union, that is a weakness in the Commission. The Commission originally was the strong driving force in the European Union and every country wants to be able to identify a Commissioner. That was not part of the original concept because each country, regardless of its location, has an entitlement to the ownership of a commissioner, even if there was only one Commissioner.

I wish to emphasise the importance of commitment. Are the former EFTA countries as committed to the European vision as they were?

Unemployment is significant and there has been much discussion on a stimulus to alleviate it but surely the most important thing is to put the economic fundamentals in order. Without that, any stimulus is risky and could end up replicating what we already have. That is what happened to some extent during the Great Depression in the US.

Deputy Seán Kyne

I welcome the delegation and acknowledge the bilateral support from Sweden, Denmark and the UK, which are non-eurozone countries, for the EU-IMF programme to this country.

Norway, which is obviously Sweden's neighbour and outside of the EU, is regarded as a wealthy country with oil and fishing resources. How much does Sweden's economy benefit? Does it benefit from Norway being outside of the European Union if it has greater disposable net income for trade or purchasing Swedish goods? Is there a strong relationship between both countries and has Norway being outside of the EU benefited Sweden?

Chairman

I thank the Deputy. I know that the delegation must depart in ten minutes but we would appreciate if it could answer as much as possible.

Ms Susanne Eberstein

Together we have influence and that is the main point of the European Union. Small countries have a lot of influence when they work together. We need to work more towards integrating energy, climate and environmental considerations in the EU. We need to look forward to create a future for our children and grandchildren and that is important.

I am sorry to say that we must now talk about the economy. Behind every figure there is a human being so it is important never to forget that we are talking about the lives of many people.

The Swedish model is vulnerable because if we cannot export we cannot earn money. Even a good model needs money so the crisis may reach us too. We are not sitting in a boat doing nothing and that is part of being inside the pact rather than outside of it.

Sex trafficking is an interesting topic because we were mocked when we introduced legislation on it. One cannot offer sex in Sweden or go to a prostitute without being prosecuted. The legislation has protected us more from sex trafficking which is a sad and worrying future for a lot of women, from Eastern Europe and other places, who cannot support themselves. The basis of sex trafficking legislation is that it is forbidden to go to a prostitute and it is a good way to stop trafficking.

I want to say something good too. We heard the figures for export and import. Last year Ireland's exports to Sweden increased by 42% and our exports to Ireland increased by 21%. We are happy for Ireland and it is important free trade.

With regard to an earlier question, I do not think we have debated the issue of the presidency of the European Union. I am not a friend of a federal European Union and do not think we need a president. Various parties have differing views in Sweden. A president implies a federal state and we do not want it; the majority does not want it.

Norway is an interesting example and I would like us all to be like it because it has oil and fish. It always sits outside of the room and cannot say anything, just listens, returns home and changes its legislation. Norway pays as much as Sweden to the European Union so it is the Norwegian people who resist the EU. Otherwise Norway follows all of the rules, has the same legislation and pays as much we do. I am convinced that if the Norwegian Government could choose it would be on the inside. It is better to be on the inside and deal with every question. Did I manage to answer everything in ten minutes?

Chairman

Yes.

Ms Susanne Eberstein

Perhaps my companions will comment.

Ms Emma Henriksson

Yes, there are many interesting topics on the agenda here but I will stick to a few of them. There was a question on the crisis in Sweden and how we managed in the 1990s. One of the main ways to manage a crisis is to be conscious of it. A main problem for a country like Greece is that its people do not see how big the problem is. The situation is different in Ireland. Even though it is always difficult to do the right thing, the things one needs to do when in a crisis, if the people understand that there is a deep crisis they will accept it. One of the biggest lessons we learned is not that one just has to do the right things when in a crisis but do the right things before the next crisis. We did some of that and learned in 2007-2008 that we had not done all that we had aimed to do. We did a lot but it was difficult. When one is in a crisis it is a lot easier for people to reach agreement across party lines and do what must be done. When a crisis is not that acute, it is more difficult. A lot of debate took place in Sweden that we should do more and spend more money because we were in good shape. We had to restrain ourselves in order not to be in a crisis and now we can see that it was a good thing and Sweden has money.

Our common next crisis will be unemployment, especially among young people. It is a ticking bomb throughout Europe. We must come together and see what we all can do to get young people into the labour market. Sweden has a high rate of unemployment as does Ireland and other countries.

Mr. Sven-Olof Sallstrom

I am from one of the Opposition parties, the Swedish Democratic Party. A question was asked about the euro in Sweden but it is a delicate issue and it would be political suicide to suggest something like it today. I do not think it will be for three or five years but I hope it will be ten to 15 years.

A question was asked about how the Swedish people comprehended the bank crisis in the early 1990s and co-operated with the politicians. They woke up one morning to find they had a 900% interest rate on their mortgage. Anything is better than that and they understood that it was a bad situation.

I do not think there will be a federal European Union. Obviously there is no majority in favour of it in the Swedish Parliament and hope there will not be for a long time. We need strong national parliaments in the European Union to keep it legitimate and close to the people. It cannot be a political project without a mandate from its people. A federal EU would never work. For that reason one needs a strong national parliament to influence European politics.

We do benefit from Norway. A lot of Swedish youths work there and even our unemployed are working there. Some years ago I heard that 100,000 Swedish people work in Norway so of course my country benefits.

Norway made a good decision not to be part of the EU just its market and Norway pays one fifth of the money that we pay for membership. It has access to the market but it does not have the rest of the problems.

Chairman

On behalf of the committee members I thank the delegation for engaging with us today and sharing their views. I hope that they enjoy the rest of their stay and that is informative and they get a lot out of it.

The joint committee went into private session at 3.10 p.m. and adjourned at 3.25 p.m. until 11.30 a.m. on Thursday, 15 March 2012.