"Mediterranean Union" may be floundering, but at the other end of Europe British Prime Minister David Cameron is just getting started with plans to form a 'Northern European Union.'
The leaders of Britain, Sweden, Denmark, Norway, Finland, Iceland, Latvia, Lithuania and Estonia are all meeting in London today to discuss the potential for a grouping which Cameron is calling an "alliance of common interests". He wants to boost trade between the UK and the Nordic and Baltic countries, but also to increase the flow of ideas. These include ideas on technology and economic and social policy, areas in which Northern Europe has similarities and expertise that are not necessarily shared by many countries in other parts of Europe.
Cameron insinuated as much yesterday when he said a northern grouping could become an "avant garde" for economic growth in Europe. And of course, Northern European countries have deep historical ties as most were ruled by Denmark at one time or another. And before the EU came along the Nordics had their own attempted intergovernmental union, the Nordic Council.
But the fact that this is also a gathering of traditionally eurosceptic nations is leading many to question whether Cameron is in fact trying to form an alliance of traditionally eurosceptic nations looking for an alternative to European federalism. No EU officials were invited to the summit. Seven out of the nine countries gathered in London today do not use the euro. Norway and Iceland are not EU members (though they do follow EU regulations as part of the European Economic Area). The trifecta of Britain, Sweden and Denmark are usually seen as the three member states who are the most hostile to European integration.
Fredrik Reinfeldt – who are both relatively young for their positions in their 40's – seem to have become fast friends. Cameron has repeatedly held up Reinfeldt's Sweden as an example for what the UK could accomplish, both in economic and social policy. Since Reinfeldt was elected into office in 2006, he has pursued an ambitious centre-right policy with innovative new solutions. The Swedish government has also been able to avoid the worst of the economic crisis. Over the past few years the country has been an outlier in Europe as it enjoyed record growth, healthy public finances, booming exports and a high value in its currency the krona, with productivity levels higher than in the United States. Experts have warned that this kind of isolated growth is not sustainable, but Cameron has held it out as an example of the right path forward for Britain.
Cameron's government has insisted that today's meeting is not about forming a united block against Brussels but rather sharing the ideas that the countries have in common. But it has been undeniably true that Cameron has been working hard to coble together his Northern European counterparts into a united block in European Council meetings in Brussels. This was on display in November's negotiations over the EU budget. Britain, Denmark, Sweden and Holland joined together to stonewall any negotiations with the European Parliament over their demand for an EU tax. In the end they were successful – the European Parliament gave in and agreed to the 2011 budget without having their demands for an EU tax or more say over the budgeting process met. This outcome may not have been possible without the unified opposition of Cameron's 'Northern bloc'
Given that these countries share not only similar cultures but also similar political outlooks, it's probably only natural for them to form a negotiating bloc in council discussions similar to the ones formed between Germany and France or between the Southern European countries. But with today's meeting, is Cameron trying to go one step further into forming some kind of more cohesive permanent alliance among these states, one that would incorporate non-EU neighbours? That remains to be seen.
One question that remains unanswered is why the Baltic states have been invited to today's meeting. The former soviet republics of Estonia, Latvia and Lithuania only joined the EU in 2004 and are not known for any sort of virulent euroscepticism as exists in their former colonial masters Sweden and Denmark. And being fairly poor countries in transition to market economies, they share little of the technological, economic and social advancements that are shared by the UK and the Nordics.
In truth, the similarities that exist between the Northern European states may be over exaggerated, as is often the case for Southern Europe. Yes the UK and the Nordics are both centres for technological innovation and liberal economic thought, but their social models are different in many ways. Sweden and Denmark are social welfare states with 50% tax rates, among the highest in the world. The UK is a hybrid social-liberal country that combines some social elements of continental Europe with many of the free-market principles of America. The UK has a tax rate half the amount of the Nordic countries. In terms of social welfare policy, Nordic conservatives are closer to New Labour than they are to the Tories.
This could cause complications if the countries were to get serious about more involved cooperation down the road.