2012

Speech Rio +20 Summit on Sustainable Development 22 June 2012 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt at Rio +20 Summit on Sustainable Development Check against delivery

Madame President, Mr. Secretary General, Excellencies, Ladies and Gentlemen, The world of today is facing huge challenges. But also huge possibilities. Globalization has brought tremendous benefits for many people. Through increased movement and increased trade. The economic growth during the last fifteen years has brought 400 million people out of poverty. Today we see more countries than ever, walking the path towards democracy. We also see how knowledge and innovation contribute to solving more and more of our common problems. At the same time, many of the countries in the world are being torn by war and conflicts. Often the same countries which are fighting widespread poverty. Unsustainable production and consumption patterns are depleting our natural resources. Climate change is causing more extreme weather conditions, which affect the poorest people the most. The world is not short of challenges if we are to reach a more sustainable development. The question is - how can we together meet these challenges? Firstly, a number of fundamental conditions need to be in place. Among those are first and foremost democratic principles. Openness and transparency. Free flow of information. Accountability. As well as respect for human rights and gender equality. Maybe most important and fundamental in this respect is to ensure human, economic and social rights for 3.5 billion women and girls around the world. This is not only a question of fairness and gender equality. But also a purely economic question, since it would lead to significantly higher GDP growth in many countries. Especially interesting of course in times of economic crisis. Every day, around 1000 women die from causes related to pregnancy and childbirth. Addressing women's sexual and reproductive health and rights is more urgent than ever. Market economy and free trade are other important instruments to fight poverty and bring prosperity to more people around the globe. Instruments which in times of economic crisis are being questioned, also in Europe. And which are sometimes being replaced by protectionist policies. Something we need to take a clear stand against. Furthermore, we also have to create possibilities for people to strengthen their power over their own lives. Only when people are free to think and express themselves, they are able to make demands. Contribute to change. And create a sustainable development. Madame President/ Mr. Secretary General, I would like to highlight in particular four areas of importance to create a sustainable development: Firstly: In a sustainable society, the prices of natural resources have to be right - in the sense that the prices also have to reflect the environmental effects. This can be done for instance through environmental taxes, trade with emissions and environmental fees. In Sweden, we have made that kind of economic incentives work. Showing also that it is possible to increase economic growth and at the same time reduce greenhouse gas emissions. Crucial of course for developing countries. If we are serious about meeting the climate threats, we all need to perform better in this area. That is why we believe that economic instruments should be key tools for a green and inclusive economy. Secondly: In 2030, five billion people are expected to live in cities. A large part of the energy consumption, the environmental and social problems - including the increasing poverty - will be concentrated here. This is the reason why Sweden is pushing to increase the awareness and need for sustainable urbanization. We simply have to rethink and adopt a comprehensive view on urban planning. Where resource efficiency and energy efficient techniques go hand in hand with increased recycling. And where increased employment is combined with increased availability in social services. Thirdly: The business community is playing a decisive role to mobilize recourses, create employment - in particular for young people - and stand up for responsible innovations - in our endeavor to reach a sustainable development. The economic and environmental problems of today are to a high degree linked to the production and consumption patterns. To better take care of the expertise, the resources and the innovation potential of the business to reach sustainable development should be a priority. Fourthly: Access to and a sustainable use of energy as well as water and sanitation is crucial. Cost-efficient and healthy energy and water solutions contribute to improving people's living conditions, health and environment. Madame President/Mr. Secretary General, The Swedish government organized in April this year a Partnership Forum for Sustainable Development to discuss how governments, businesses, organizations and individuals could promote to a more sustainable society. The four points I made as well as a number of other recommendations are included in the Call for Action that was issued at this conference. Finally Mr. Secretary General, Sweden believes that the notion of sustainable development needs to become more concrete and measurable. We therefore very much welcome the agreement at this meeting to set up Sustainable Development Goals. Because real change is only possible when we truly understand the challenges facing us. When we know what actions are needed. And when we can see the progress made. We believe that Sustainable Development Goals can make it a lot easier for all of us to take action. The action that is urgently needed. Thank you for your attention! Speech 25 April 2012 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt at Stockholm+40 Check against delivery

Mister Prime Minister, Ministers, Excellencies, Ladies and Gentlemen, 40 years ago, in 1972, world leaders met here in Stockholm for the first UN Conference on the Human Environment. 113 countries and more than 400 organisations gathered under the banner "Only One Earth". The theme indicated a milestone event. It was the first international recognition of the interdependence between human beings and nature - and a need for a significant shift in the international development agenda was expressed. The strength and the continuity of the Stockholm Agenda turned out to be a lasting phenomenon in multilateral cooperation. The concept of sustainable development with its three dimensions - social, economic and environmental - has been firmly established ever since. The Stockholm 1972 conference also meant that issues concerning the human environment became areas of both national and international concern and cooperation. A special UN programme for the environment, UNEP, was established. This organization has now been serving the people and the planet for 40 years. With modest means, but with immense commitment, UNEP has played a crucial role in driving the development of international environmental law and collaboration. Today, 40 years later, we meet again in Stockholm. Government, civil society and the academic community has been joined by the business community, which is increasingly driving sustainability. Quantum leaps are possible when actors join hands and take the lead in contributing to sustainable development. Today, globalisation, innovation and economic growth are bringing an increasing number of people out of poverty. At the same time some of the greatest challenges to mankind cannot be dealt with successfully without additional action. I am thinking of such universal challenges as climate change and global warming; the energy crisis; water shortages; widespread poverty in parts of the world; the impact of current demographic changes; prolonged international conflicts and the risks of pandemics. The Rio+20 Conference in Rio de Janeiro later this year represents a unique opportunity. To build a renewed and reinforced political and institutional foundation for sustainable development. It offers an opportunity to elaborate a clear vision for a sustainable planet and for a sustainable use of its rich - but in the end - limited resources. How our generation manages to create such a vision might be the most determining question for the future of our planet and our children. We have learned a number of lessons over the years. For instance, Sweden's development from a poor agrarian country to today's ambitious welfare state illustrates that economic, social and environmental developments are inter-linked. Ambitious social and environmental policies contribute to long term economic development. For instance, since 1970 Sweden has cut carbon dioxide emissions by a third while GDP has more than doubled. This shows that decoupling between economic growth and greenhouse gas emissions actually is possible. Sweden's history also shows the importance of securing respect for the rights and freedoms of the individual - combined with an inclusive society that seeks to minimize the inequalities. For all this to be possible, public finances need to be sustainable in the long term, something Sweden painfully learned in the early 1990. We have since then introduced a comprehensive fiscal policy framework - long before the EU even dreamed of a fiscal compact. The opportunities for change and the benefits of action are vast. Globalisation has lifted millions of people out of poverty, which enables people to make economic choices. Democratization has at the same time given voice to many millions of people. Advances in science have given us better understanding of the state of our ecosystems and increased knowledge about how to use natural resources in a sustainable manner. Information and Communication Technologies provide tools for liberating information sharing. Demographic change will provide a significant dividend. If we are able to integrate into the labour market the large bulk of young people, who are healthier and more educated than any previous generation. Furthermore, women's economic and political participation are necessary conditions not only for equality, but also for economic growth and equitable and sustainable development. It is a fact that increased gender equality would have immediate economic benefits. Every day, millions of choices are taken by individuals, businesses and governments. Our common future lies in all those choices. When actors have the necessary insights about sustainability, and are supported by the right policies and incentives, change is possible at the local, national and global level. Achieving sustainability is about enabling people, markets and other actors to make sustainable choices. An ambitious political pull by governments, establishing the right incentives, will enable sustainable production, innovation and lives. Transparency, monitoring and reporting by governments and businesses are key elements for ensuring accountability and making sustainable choices happen. Today we see a number of challenges to sustainable development from our Swedish horizon. 20 years after signing the Climate Convention at the Rio Summit, global emissions are still increasing every year. We see worrying trends in other areas as well, for example biodiversity, which is rapidly decreasing. There is a need for better implementation of existing commitments. Well-designed policies can reverse the trends, safeguarding economic growth and the well-being of future generations. International structures also need to be strengthened so as to better integrate sustainability. New forms of collaborations between the public and private sectors are required. The business sector should be increasingly involved. This sector has a decisive role in mobilising resources, creating innovation and employment and upholding corporate social responsibility. By aligning their operations with universally accepted norms in the area of human rights, labour and environment, businesses can ensure that markets advance in ways that benefit people and the environment. More than half of the world's population lives in cities, and urbanisation continues at a rapid pace. A large share of energy consumption and environmental and social problems, are concentrated to urban areas. We need to promote an integrated perspective on sustainable cities, including urban planning, energy- and resource efficient techniques among others. The sustainable use of energy, water and sanitation must be turned into a reality for all people. The way these resources are used determines people's health, their access to food, and their livelihoods. Furthermore, sustainable agriculture, forestry and fishing are central for the livelihoods of many people around the world, especially people living in poverty. Linked to resource use is how ecosystem services - that is, the good things that we get from nature - should be valued and priced. There is a need for economic incentives that make the polluter pay. There is also an urgent need to phase out environmentally harmful subsidies. The validation of ecosystem services in national accounts and in business plans is an important step towards the conservation of biodiversity. Ladies and gentlemen, In light of these challenges let us focus on the opportunities. And let us rise to the task and make this meeting a substantial input to a successful Rio conference. In this context, I am pleased to announce that Sweden and China have agreed a Framework Document to strengthen our cooperation in Sustainable Development - confirming our commitment to these tasks. It is time to follow the lead of those who initiated our joint sustainability journey - 40 years ago. It is time to be farsighted and innovative. It is time to take action. Thank you for your attention. Speech London 23 February 2012 Fredrik Reinfeldt, Prime Minister Address to the International Conference for Somalia (CHECK AGAINST DELIVERY)

Let me start by thanking Prime Minister Cameron for the timely convening of this Conference. This Conference gives us the opportunity to discuss and show our support at a very crucial point in Somalia's history. For all too many years Somalia and its people have been suffering from war, instability, drought and famine. All of us gathered here today - no matter which country, nationality or organisation we represent - deeply wish this Conference to succeed in opening a new chapter in the history of Somalia. But time is running out. And we are rapidly approaching August. It is now time that eight years of transitional arrangements pave the way for a permanent democratic constitutional order. The Constitution - now in the making - can become the peace-making and unifying foundation for an emerging new Somalia. It is clear that the responsibility for a new beginning lies above all in the hands of the Somali authorities. Genuine change has to come from within. It will be the task of the new generation of leaders, to anchor a democratic Constitution, consolidate good governance and build confidence among fractioned communities. To achieve this, the political leadership must be broadly representative, credible and consist of respected individuals. The full and equal participation of Somali women must be ensured. Politics is the art of the possible. A will to accommodate divergent views must be part of shaping the future governance of Somalia. All who wish to join the political path in a spirit of peace and reconciliation should be allowed to do so. And terror should not be allowed to be used to gain power. Strengthening the rule of law and ending impunity are indispensable to deter such acts. Sweden has been engaged in peace and development cooperation in Somalia for more than forty years. We have provided food and shelter, medicine and education, and we are ready to continue our engagement. However, our continued support will not be unconditional. We will be firmly guided by the principles of "more for more". Delivering aid in a post conflict environment is always extremely challenging. We therefore welcome the proposed Stability Fund that would allow fast and flexible funding, particularly on a local level. If the Somali people do not rapidly see improvement in safety, local governance and delivery of basic services, then the peace process will continue to remain extremely fragile. It is my firm conviction that the women and girls of Somalia have to be at the center of our joint efforts. If women will be able to fully take part in the development of local administrations, it will increase these institutions legitimacy and also adapt them to the needs of women. In several respects, Somalia has become a global nation. Many of us around this table host citizens and residents of Somali origin - in my country 40,000. The commitment of this Diaspora to engage in rebuilding Somalia is crucial and needs to be encouraged. I am convinced that with the joint efforts of us all - Somalis in Somalia - Somalis in the Diaspora - and the friends and supporters of Somalia in the international community - we should be able to support Somalia in the direction of peace, security and prosperity. For the sake of Somalia and its people. Thank you. Speech Northern Future Forum 09 February 2012 Fredrik Reinfeldt, Prime Minister Opening speech by Prime Minister Fredrik Reinfeldt Check against delivery!

Dear Colleagues, Ladies and Gentlemen, Welcome to the Northern Future Forum!

This is a meeting addressing important challenges for the future. In a Europe with short term management of the debt crisis consistently on the agenda - we will today address long term growth issues. Related It is my hope that at this meeting, we will - together - demonstrate a modern and open political leadership. Northern Future Forum, When we gather today - prime ministers, businesspeople, academics and experts - we will do so in an open and 8-9 February 2012 creative environment to find ways to further develop our societies. I am convinced that the museum we are in, the museum for contemporary photography, will create the right atmosphere and contribute to creating an open environment. I hope the art you will be surrounded by will give you some new perspectives and energy to contribute to the discussions! We live in an age of change. In Europe we are currently focusing on the short term. On the debt crisis and on the lack of competitiveness. In a wider and longer term perspective, we experience other changes. Affecting people globally. The effects of globalisation, digitalisation, the climate challenge and new demographics. In a world like this - our citizens have rightly high expectations on their governments. The political leadership therefore faces new challenges. In my view - three things are now vital for us as leaders. First, leadership means to take responsibility. In the short term by ensuring sound public finances or handling failing banks. But also in the long term. Addressing long term challenges with the aim of making our society better for all citizens. These are the foundations of trust. Let's address the issues that determine how our societies will develop over the coming 20 and 30 years! Secondly, leadership is about being pragmatic. Politics is very much about being clear about what we want to achieve. But also being open and pragmatic about the solutions. We share the objective of creating more jobs and more opportunities for everyone in our societies. Let's find the solutions! And thirdly, leadership is about being able to listen. The citizens demand leaders who take difficult and long term decisions, but who are also able to listen to their concerns. A leadership that understands that the reality of people's lives must be the precondition for policymaking. A leadership that understands that good ideas are created in all parts of society and - as we will experience today - in other countries. But listening is very difficult. You have to be open-minded. And you have to be prepared to reconsider what you once thought was true. And to change your mind. This meeting - the Nordic Future Forum - is about all of this. Taking long term responsibility. Finding pragmatic solutions that can make a difference. And listening. Looking at the situation of our nine countries represented at the meeting here today, it is true that the economic forecasts are brighter for us than for many other countries in Europe. On average our 9 economies will grow by 2 per cent in 2012 - according to the European Commission and the IMF. Compared to a negative growth of half a per cent for the Eurozone. But that being said, the chilly winds from the rest of Europe have already affected - or are about to affect - also our industries and our consumers. And it is clear that we all have huge challenges ahead of us. A challenge that involves enhancing our competitiveness and competing with fast-growing economies. A challenge of adapting to globalization, new demographics and all the other long term changes affecting us. This is why our discussions today are so important. If we only discuss the problems of today and never take the time to widen the perspective. How can we then make sure that our countries will prosper not only next spring, but also twenty years from now? Our nine countries are quite alike. We are open and trade-oriented economies. We believe in the internal market. Which Iceland and Norway also participate in through the EEA. We believe that the internal market still has an enormous potential. For example when it comes to trade in services, the digital agenda or creating a European patent. We all believe in favourable conditions for competitiveness, innovation and entrepreneurship. And we believe that we can combine economic growth with a reduction in greenhouse gas emissions. Our discussions today will focus on two of the challenges that will shape our future. Let me underline - these issues are key to future growth; How to reap the full benefit of women's potential on the labour market; in particular how to achieve more women as entrepreneurs and leaders. And how we can create the right conditions so that older people choose to remain in the labour market. I would like to say a few words of introduction and background to the two themes chosen for this meeting. To explain why we find them so important. Firstly. Only a generation ago, working women were not the norm everywhere. This has changed dramatically. Women make up nearly half of the workforce in Europe, and women account for almost 60 per cent of university degrees in Europe and the United States. But when you take a closer look at the situation, it becomes clear that we still have a long way to go. A long way before we can reap the full benefit of women's potential on the labour market. And before we can benefit from the fact that women are often better educated than men. Today only three out of ten European entrepreneurs are women. And women are under-represented in senior positions. Only one out of ten board members of the largest companies listed on the national stock exchange of EU Member States is a woman. The disparity is widest at the very top where only 3 % of such companies have a woman directing the highest decision-making body. Some of these women are with us today. And I am very interested in their experiences and the advice they would like to give to us politicians. But also to the private sector and social partners. I believe that all of us need to work together to promote the advancement of women's careers and to create the right circumstances for more women entrepreneurs. We should also listen very carefully to the Latvian and Lithuanian examples. Two countries that stand out when it comes to the ratio of women entrepreneurs - 40 per cent of their entrepreneurs are women. Whichever method you choose to make progress, it is clear that we have a lot to benefit from improving the situation for women on the labour market. Not only does it make economic sense in itself to fully use the knowledge and talent of half the labour force. But there is also an increasing body of research showing that gender diversity pays off in terms of business performance. A McKinsey report from 2010 shows that companies with women on their management boards are performing 56 per cent better than companies run exclusively by men. I must admit that we have been a little bit eager to find solutions in this area. Therefore, yesterday, we gathered over a hundred business women in Stockholm. To listen to their experiences and ideas on how to get more women as leaders and more women as entrepreneurs. Some of the ideas put forward were the following: Schools and educational systems must encourage entrepreneurship We need to ensure flexible ways of managing careers and children We need women as visible role models in companies as well as mentorship programmes I am sure these and other suggestions will be discussed later on today. It is important that we find the solutions to make progress. Our second topic for discussion concerns the changing demographics and their consequences for our society. In 1950, life expectancy globally was around 46 years. Today, it has risen to an average of nearly 70 globally and almost 80 years for the EU. We live longer, we are better educated, and we are healthier than ever before. This is a fantastic development. But it is also true that our education, health and pension systems have not adapted to this development. Let alone our attitudes and social norms. Low fertility rates and young people entering the labour market later result in fewer people working and paying taxes. At the same time they are expected to pay for a growing number of older people. This of course puts a heavy burden on the state. At the same time many older people would welcome the opportunity to work longer. If it made economic sense. And if they could set their own conditions - and make them more flexible, with less physical strains and fewer working hours. And also, and this is important. I think many people would like to work longer if they could do two or maybe three different kinds of job in their life. That would make their working life more interesting than just one occupation from the day you enter the labour market until the day you retire. So we have a challenge here, but we also have great opportunities. The opportunities will appear, if we are prepared to question our habits and give up our prejudices. We need to discuss how to encourage entrepreneurs who are in their seventies. And how you can enable a change of profession through studies and training at the age of 45 or even 55? Given that you might then have 20 to 30 years of work left. We should even be ready for people over 60 wanting to change jobs and starting a new occupation. The truth is that there is a growing number of 60-year-olds who want to keep working for possibly 15 or 20 years before they retire. We need to change our attitudes and realise that these people are not a burden. They represent a wealth of resources and knowledge and they are happy to contribute to society. One part of the solution is to stop seeing older people as a homogenous group. We are all different and we have different ways of life, different wishes for the future, and different capacities. If we are to succeed in the long run, and realise the full potential of our older citizens, we must see them as individuals, and we must accept that there is no one model that suits everyone. Some countries have come further than others. In Iceland for example 50 per cent of those aged between 65 and 69 are still working. I very much look forward to listening to and sharing the Icelandic experience. To conclude, I believe that our 9 countries represented here today are quite similar when it comes to the challenges we are facing. And the way we want to tackle them. But we have also different strengths and weaknesses. I am very much looking forward to listening to your experiences, your ideas, and your thoughts on how we can realise the full potential of both women and older people in the future. I am convinced that we have a lot to learn from each other. Let's start listening to each other! Let's start the discussions! Thank you very much for your attention. 2011

Speech The UN General Assembly 23 September 2011 Fredrik Reinfeldt, Prime Minister Speech by Prime Minster Fredrik Reinfeldt in the UN General Assembly (Check against delivery)

Mr President, Mr Secretary-General, Distinguished Heads of State and Government, Excellencies, Ladies and Gentlemen, More than ten years ago we decided to set eight concrete goals. To free humanity from extreme poverty, from hunger and disease and from illiteracy. We called them the Millennium Development Goals. These goals have been powerful. They have helped the international community to monitor and mobilise resources for development cooperation. And important progress has been made. We have seen poverty declining in many countries. By 2015, the global poverty rate is expected to fall below fifteen per cent. We have seen some of the poorest countries make the greatest strides in education. Child mortality has been reduced. New HIV infections are declining steadily. We have seen increased access to clean drinking water. But we still have a long way to go in other areas. To raise standards of living. To offer equal opportunities to people around the globe. Today, I would like to focus on one key area. It is an area where progress is still very slow. But since it affects half of the world's population and half of the world's human resources, it is of crucial importance. I am referring to maybe the most important human rights failure of all. At least the one that affects the largest number of human beings. I am referring to the unmet human, economic and social rights for 3.5 billion women and girls. They make up half of the world. But they are not allowed to fulfil their potential as powerful drivers of economic development as well as of peace and security. Let me just fill you in on the situation we have today: - Women perform 66 percent of the world's work and produce 50 percent of the food. But they earn only 10 per cent of the income and own 1 percent of the property. - 70 per cent of the world's poor population are women or girls. - Every day, approximately 1000 women die from causes related to pregnancy and childbirth. That adds up to about 350 000 deaths each year. - We were this week witnessing a historic step in the history of the United Nation, as the Brazilian President Dilma Rousseff as the first woman ever opened the General Debate. At the same time - standing here, mid-2011, there are still countries who do not allow women to vote. And in only 28 countries has women's parliamentary representation reached a critical mass of 30 percent or more. Only 19 women are leading their countries as elected heads of state or government. And this is not fair. It is not just. And it makes no sense. Mr. President. To me, gender equality is first and foremost a question of ensuring equal rights for women and men. It is about giving all individuals - irrespective of gender - the same possibilities to education, to economic opportunities and to take part in society. In the year of 2011, there are women who are still not able to enjoy equal rights. They are refused the right to vote, inherit, work and even to drive a car. And at the end of the spectrum, women are subject to gender-based violence and rape as a weapon of war. But shortfalls in these rights are not only the loss of the women affected. They are a loss to society as a whole. And I can tell you: This is very bad economic policy for the countries concerned. Not least in these times of global economic crisis, it seems obvious that we must realize the full potential of all human resources. I will give you a few examples. Closing the gap between male and female employment rates would have huge implications for the global economy. It would boost American GDP by as much as 9 per cent, Eurozone GDP by 13 per cent and Japanese GDP by 16 per cent. But increased gender equality doesn't only have immediate economic benefits. It's also an investment for the future. Evidence from a range of countries is clear. When women take greater control of the household income, more money is spent on the children's needs - such as food, health and education. The children grow taller, are less ill and get better jobs. Moreover, when women take greater part in society - by shaping institutions or taking leading roles in politics or business life - there are clear improvements for the public good and less corruption. When they are present at the building of peace, results improve. In short, I see gender equality not only as a crucial human rights issue, but also a question of smart economics. I would urge all representatives sitting in this room: Imagine what it would mean in terms of economic growth for your countries if women were allowed to fully participate in society. Mr. President, As technology develops, the world is changing. In one minute I can use my mobile phone to get hold of a friend on the other side of the globe or my children back home in Sweden. That is amazing. But in one minute, we can also get a first-hand report on the situation in troubled parts of the world. We can get first-hand access to pictures of abuse and violence - taken by hidden mobile phones and for the whole world to see. Today, ideas of freedom and democracy are spreading at the speed of sound. We have seen it in North Africa. We are seeing it in the Middle East. The Internet and new technology have laid out a high speed motorway. Heading towards democracy and freedom. We can see that some are trying to put out road blocks. Repressive governments trying to quash the rights they fear. Mr President, The United Nations must play a leading role in embracing and maintaining these new roads towards democracy and freedom. The UN Special Rapporteur on Freedom of Expression recently concluded that there must be as little restriction as possible to online freedom of expression. He called this an "enabler" of other human rights. Sweden - together with 40 other nations around the world - strongly supports his conclusion. We want to build an alliance for the freedom of the Internet. And we have launched a special Initiative for Democratisation and Freedom of Expression. So that we can urgently support human rights activists and agents of democratic change. The Internet is the new frontline in the fight for freedom across the world. Mr. President, In many countries, my own included, we take freedom for granted. In other countries, it's still a dream. This year, we have witnessed courageous people in North Africa and the Middle East taking to the streets to fight for their dream. To fight for freedom, openness and democracy. For this, they must get our support. When there are threats of genocide, war crimes, ethnic cleansing or crimes against humanity - when autocratic rulers like in Syria turn their guns on their own citizens - then the international community has a responsibility to protect civilians. Sweden hopes to play its role in this decisive phase in the region. We are contributing to the implementation of Security Council Resolution 1970 and 1973 in Libya. We are providing substantial humanitarian support to several countries in North Africa and the Middle East. And when the new governments turn to the crucial task of establishing democratic principles, rule of law and respect for human rights, then we are ready to continue our support and to do more. To see the Arab spring turn into a blossoming summer. Mr. President, The European Union is firmly committed to Israel and a Palestinian state living side by side with each other in peace and security. We all want to see the peace process resume. Violations of international law must cease. Only then can a true and lasting peace be achieved. Mr President, The Horn of Africa is suffering its worst famine in 60 years. We are faced with a huge humanitarian disaster. And the international community must respond faster and better. Now. Disasters such as the ones in Haiti, Pakistan and now on the Horn of Africa show the central importance of the UN in humanitarian action. The UN needs our full support to further improve the international response capacity. Mr President, In a globalised world, we are not just interconnected online. Together we share a planet with finite resources. And yet we consume as if there was no tomorrow. I believe that sustainable development requires global solutions. In this respect, next year's Rio+20 meeting in Brazil will be very important. I am really hoping for a strong renewed political commitment for sustainable development. We are also looking for concrete progress at the Durban climate conference in November. We know what we need. And we have known it for some time. Further reductions of greenhouse gas emissions. If not - we are simply not going to be able to turn the trends of global warming. These are turbulent times. Some countries are suffering from financial and economic crises. Others are suffering from severe consequences of global warming. Yet others are building new societies as freedom and democracy have replaced dictatorships and repression. More than ever there is a need for a well functioning global arena for international cooperation and conflict resolution - for the pursuit of sustainable economic, social and environmental development. The need for a strong United Nations based on political legitimacy, on justice, and on human rights is as strong as ever. Sweden will do its utmost to support a strong United Nations through substantial contributions to humanitarian and development assistance and to its work for peace, security and human rights. We also want to help revitalise the UN's work on disarmament and non-proliferation. Together with Mexico we will as chairs work hard on advancing the entry into force of the Comprehensive Nuclear Test-Ban Treaty. We have also presented our candidature for a seat on the Human Rights Council for the period 2013-2015. As a member of the Council, Sweden would contribute actively to making the Council a more efficient and active body. And to promoting universal enjoyment of human rights. Making rights real. Mr. President, This week we commemorate the 50th anniversary of the death of the Swedish Secretary-General Dag Hammarskjöld. He played an important role in reforming and shaping the UN as we know it today. Let me conclude with these words from Dag Hammarskjöld: "The pursuit of peace and progress, with its trials and its errors, its successes and its setbacks, can never be relaxed and never abandoned." This was true then. And it is true today. Thank you Mr President. Speech Addresses in connection with events in memory of Dag Hammarskjöld 22 September 2011 Fredrik Reinfeldt, Prime Minister Dag Hammarskjöld's legacy for UN preventive diplomacy in the 21st century

Mr. Secretary-General, Excellencies, Ladies and Gentlemen, It is a true honor for me to open this seminar, and a pleasure to do so in the presence of such a distinguished panel. We have gathered today to commemorate Dag Hammarskjöld. The second Secretary-General of the United Nations. On the fiftieth anniversary of his death. Five decades is a long time. The world of today looks very different from when Hammarskjöld's plane went down in the jungle - outside Ndola in modern-day Zambia. In the dark night of the 18th September 1961. Dag Hammarskjöld's time as Secretary General was shaped by deep conflicts. The Cold War and the antagonism between the East and the West, which created ripple effects all over the world. Against this background you might wonder how much relevance Hammarskjöld's legacy has today. I would contend that the answer is "a very great deal". One of the most prominent aspects of Dag Hammarskjöld's legacy is preventive diplomacy. The subject of today's discussions. Not only did Hammarskjöld coin this notion, he also set ground-breaking examples of direct diplomatic engagement on the part of the Secretary- General. It is clear that the idea of preventive diplomacy stems from Dag Hammarskjöld's overriding ideas and ideals. It reflects his ambition that the United Nations should be a dynamic instrument in the hands of its member states rather than a static conference. And he had a very personal approach to the idea of diplomacy. This strongly reflected his own character: a high level of integrity, hard working, always putting duty first. Let me reflect on two aspects of this: Firstly, Hammarskjöld was very attached to the concept of an independent international civil servant. The people working for the United Nations should work in the best interest of the international community as a whole. He spent his first years in New York protecting and reinforcing an independent UN secretariat. For him this was a pre-requisite for an effective United Nations. The independent civil servant is also at the heart of his concept of preventive diplomacy. Only such a person could be trustworthy and credible in a mediation role. Secondly, Dag Hammarskjöld believed in personal encounters. He acted very fast and quietly and through personal contacts. His first success - securing the release of American pilots held by China - was a very clear example of this. From the concept of preventive diplomacy his thinking concerning the United Nations role and tasks evolved. He developed his conviction of the importance of peace keeping operations. This is probably his most important contribution to the development of the United Nations. Peace keeping operations were not part of the UN Charter, but Hammarskjöld turned them into an important part of the organisation. He started in Suez in 1956 and continued with the complicated operation in Congo, at great personal risk which ultimately led to his death. Today peace keeping is one of the most effective and visible instruments in the UN toolbox. The scale and number of operations testify to this. Mr. Secretary-General, Excellencies, Ladies and Gentlemen, The challenges facing the United Nations are constantly changing and evolving. The tasks facing us are many. The Millennium Development goals to eradicate poverty, hunger and disease. To combat climate change and its devastating effects. To ensure human rights and equal economic opportunities for women and men. From conflict prevention, responsibility to protect and peace keeping to peace building. In the spirit of Dag Hammarskjöld, I would like to encourage us all to look upon the United Nations as a "dynamic instrument in the hands of its member states". The United Nations will be what we want it to be. It is up to us to create the United Nations that serves us best and in handling the challenges of today. And to create the United Nations best suited to serving us tomorrow. Let me conclude by some words from Dag Hammarskjold. On his election on a second term, in 1957, he said: "Service of the United Nations...is profoundly meaningful whether it bears immediate fruit or not. If it paves one more inch of the road ahead, one is more than rewarded by what is achieved. This is true whatever set backs may follow: if a mountain wall is once climbed, later failures do not undo the fact that is has shown that IT CAN be climbed. In this sense every step in the pioneer effort of this organisation inevitably widens the scope for the fight of peace."

Thank you. Speech Norrmalmstorg 15 August 2011 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt at the 80th Monday meeting at Norrmalmstorg, celebrating 20 years of independence in Estonia, Latvia and Lithuania (Check against delivery)

It has been twenty years. Twenty years since we met here at Norrmalmstorg to support freedom in Estonia, Latvia and Lithuania. To show that we would not turn our backs on the Baltic peoples' right to freedom, independence and democracy. Many of us here today were also here 20 years ago. Among us, are some of the very initiators of the Monday meetings. Others are attending your first Monday meeting. A warm welcome to you all. And I would especially like to welcome my colleagues: the Prime Ministers of the free and independent republics of Estonia, Latvia and Lithuania. This is your day. This is a day for your people. But also a day for all the people around the world who value freedom and who struggle to make freedom a reality. *** On 79 Mondays, from the 19th of March 1990 until the 16th of September 1991, thousands of Swedes gathered here at Norrmalmstorg. Here was a spontaneous peoples' movement born. And it spread all over Sweden. Monday meetings were being held all around the country, and sometimes in as many as 50 different places. Despite sunshine, rain and snow. We met every Monday at 12. We shared the hope and the tears. We held our collective breath in fear as the Soviet Union sent in its machines of terror and violence to suppress the peaceful protests. We showed our aversion as soldiers and tanks tried to crush the dream of freedom. And as people in Tallinn, Riga and Vilnius linked arms and sang in the face of tanks and gun barrels, we felt their courage. And we said: You are not alone. We support your struggle. The people of Sweden will no longer tolerate having our neighbours occupied and oppressed by communist dictatorships. Estonia, Latvia and Lithuania have the right to their freedom.

And we met here to share happiness as the dream came true. As independence and freedom in the Baltic countries were restored after decades of suffering. As the determination, the human chains and the singing voices of millions defeated the overwhelming military force of the few. *** It has been twenty years. Twenty years since freedom was restored to Estonia, Latvia and Lithuania. During this time, democracy and the rule of law have replaced dictatorship. A market economy has been established and impressive progress has been made in terms of growth, welfare and the environment. Europe has returned to the Baltics and the Baltics to Europe. Today, the Baltic countries are full members of both the European Union and NATO. And Estonia introduced the euro as its currency at the beginning of this year. The Baltic Sea - in Soviet times a moat between East and West - has regained its historical role as a waterway for trade and human interaction. This, in turn, has created new opportunities for economic development. Step by step, we have re-established the historical ties between Sweden and Estonia, Latvia and Lithuania. We travel to each other. We trade, exchange knowledge and we cooperate. This is a fantastic journey. A journey of freedom. And it has just begun. *** On this 80th Monday meeting, we have gathered to remember the struggle for freedom in the Baltic countries. We have gathered to remember those who fell victim to Soviet terror. All those who were killed, tortured, deported and oppressed in the name of communism. And all those who stood up for freedom. Who said enough is enough. And we meet here to remember and to never forget. Because that is how we can keep history alive, and pass it on to generations of today and tomorrow. That is how we can defend and develop freedom. At the Monday meetings, we met under the banner: "We support the Baltic". A few years ago, this same banner was given to the Occupation Museum in Riga. This museum, however, does not only portray positive aspects of Swedish-Baltic relations. There are also dark chapters. Sweden was among the first countries to recognise the Soviet occupation of the Baltic countries. The extradition of the Balts is a dark moment in Swedish foreign policy. And leading Swedish politicians long denied that the Baltic countries were in fact occupied. For decades, Sweden did not acknowledge Baltic suffering. I hold in my hand a Swedish school book used during the 1980s. It makes no mention at all of the destiny of Estonia, Latvia and Lithuania after the Second World War. Not one word. In fact, it is hard to find any reference to the fact that there had ever been any Baltic countries. This was the reality when I went to school. This was the Swedish way of dealing with neighbours being occupied. Neighbours being oppressed and denied their freedom. But in the hearts of many Swedes, something else was going on. They remembered. They had neighbours and friends who were Baltic refugees living in exile. And when the first tunes of the singing revolution were sung, they wanted to show that they too supported the Baltic peoples. This gave birth to the Monday meetings. A peoples' movement. Sound and clear support for the Baltic struggle for freedom. A new start for Swedish-Baltic relations. And as we gather today to celebrate 20 years of freedom and independence in the Baltic countries, we shall bear this in mind. Sweden has a debt of honour to the people of Estonia, Latvia and Lithuania. We owe it to ourselves - and we owe it to the Baltic peoples - to remember the past, but also to build a common future. *** Today we are facing new challenges. In our world, others are struggling for freedom, independence and democracy. We see it in the Middle East and in North Africa. For many of them, the singing revolution can be a light to follow, a source of inspiration. The singing revolution, the Baltic peoples' struggle for freedom, was a revolution by the people and for the people. With dignity and conviction, people struggled for rights that were theirs. And they won. Today - in Estonia, Latvia and Lithuania - the first generation born in free and independent countries is entering adulthood. They live in the dream their parents and ancestors struggled for. A dream that came true 20 years ago. That is a dream worth defending. A dream we want to stay real also for their children and grandchildren. A dream that gives others hope. Speech Europahuset 07 March 2011 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt on Sweden's current European policy

CHECK AGAINST DELIVERY There is a difference liberation and freedom. Throughout history, we have seen many examples of how budding dreams of freedom have been crushed or shattered. We have seen conflicts and discord erode the best intentions of liberation and pave the way for new oppression and human suffering. Parts of the Arab world are now in the process of dealing with these difficult challenges - transforming newly won liberation into freedom and democracy. In other countries we see people continuing to struggle and push for their longed-for freedom. In Europe, we are following developments 'closely and carefully', as the expression goes. We try to understand, but also provide our support. Support to those now at risk, but also to facilitate a transition to democracy and the rule of law. On Friday, I will travel to Brussels to discuss this issue with my European colleagues, how Europe can support this historic transformation. * * * That which is now taking place just outside Europe also gives us cause to reflect upon our own history. To remember the dictatorship and the oppression that denied half of Europe's population its freedom. To remember the iron curtain that divided our continent just over twenty years ago. This year, we also commemorate the fact that twenty years have passed since important building blocks were laid for the free Europe that we know today. After several turbulent years in which the Berlin Wall fell and communism collapsed in Central and Eastern Europe, 1991 was the year in which the winds of change culminated. The Warsaw Pact was dissolved in 1991. This year I will travel to our Baltic neighbours Estonia, Latvia and Lithuania to celebrate the 20th anniversary of regaining their freedom. At the stroke of midnight 20 years ago, the Soviet Union was also dissolved. The journey from that day to the present cannot be described as anything but historic. Today we see a completely different Europe. We have probably never been as close to a free and unified Europe as we are today. The year 1991 is also a landmark for Sweden's relations with Europe. On 14 June 1991, the Swedish Government of the time declared that Sweden would seek membership of the EC, and on 1 July the membership application was submitted. This broke an ingrained and partially incorrect image that Sweden had of itself and which had prevailed during the post-war era. This Swedish self-image was partly the result of history, partly a conscious choice that still distinguishes our country from many other countries on our continent. We are a small country in northern Europe. We did not take part in the Second World War and therefore do not share the experience of the horrors of war that characterises the rest of Europe. We are a country that for a long time chose not to take the path towards European integration. Instead, we tried to create our own, separate social model. Perhaps the most distinctive aspects of this were the policy of neutrality, the fact that a few large companies dominated the labour market, a large public sector and clear collaboration between politics, the trade union movement and the business sector. At the same time, this was perhaps more a mythical image than a social model of our own, because was it really that different from what we know of social infrastructure in the rest of Europe? The image Sweden has of itself has also undergone major changes in recent decades. Our economy has shifted from industrial production to the production of services. Globalisation has had an impact on the business sector. Our labour market has changed. We are in the process of moving from a society of high taxes to a society that combines good economic growth with high ambitions regarding climate, knowledge and welfare. And it now appears that we are facing a time of change regarding the Swedish party system. In addition, membership of the EU means that we are no longer on the sidelines of the joint European development efforts. But what is the background to Sweden's European policy? Today, membership of the EU is all but taken for granted in Sweden. Furthermore, the Eurobarometer shows that Swedes are more positive towards the EU than the average EU citizen. And since 2006, my Government has actively worked to ensure that Sweden is at the heart of European cooperation. But this has not always been the case. We must remember that for several decades, Sweden took a relatively negative view of European integration efforts. It was long considered that neutrality was an obstacle to Swedish accession to the EU, even though the EC did not have a common foreign or defence policy in the 1970s and 1980s. And in negotiations on free trade agreements with the EC, and later on the EEA, Sweden always kept the issue of membership open. It was not until a severe crisis for the Swedish krona developed in October 1990 that the then Government under Ingvar Carlsson unexpectedly decided to apply for membership of the EC. Another important factor behind the decision was the collapse of the Soviet Union and the resulting change in the foreign policy balance in Europe. The decision was announced in a communication from the Ministry of Finance. And when the Swedish people voted on Swedish membership on 13 November 1994, the results were not entirely positive. As you know, 52.3 per cent voted in favour. A majority, yes, but not an overwhelming majority. In other words, Sweden's path to European cooperation has been rather slow and hesitant, although other political forces with a much more positive attitude have long existed. *** But in the end, Sweden chose to join in with European cooperation. And if we now look back on the 16 years of Swedish EU membership, it can be noted that it has meant a great deal for Sweden. It has affected both our legislation and our ways of thinking. Membership has also opened up many opportunities: - we can live, work, study and retire freely within the EU, - our companies can buy and sell products and services in the internal market of more than 500 million consumers, which facilitates increased trade and produces higher economic growth in Sweden, - within the EU, we limit greenhouse gas emissions, air pollution and safeguard Europe's biological diversity, - through EU enlargement, we contribute to spreading economic growth, welfare and democratic reforms to new Member States and in our region, - through the EU, Sweden's foreign policy voice in the world is stronger. And much can be added to the list. But enough about history. What can be said about the future? What stance does the EU take today? And which policies does Sweden intend to work for in the EU? *** There have been major changes in Europe. Sweden has also seen major changes. But we see the greatest changes when we gaze out at the world at large. We live in a time of change. In a world where information, knowledge, goods, money and people are constantly in motion and crossing borders. And more, all this is happening at a speed and on a scale that the world has never seen before. According to the UNDP, the world's poor countries are also slowly beginning to close the gap with the developed countries when it comes to life expectancy, education and income levels. In recent decades, the opportunities for people all over the world to build a future through education and work have improved through improved opportunities for a better life. And if these trends continue there is a possibility that we, or at least our children, will live in a world that is more equal and fair. At the same time, globalisation and development around the world have an impact on the global balance of power. Let me give you a few examples to illustrate some of the shifts in the balance of power now taking place in order to describe the world that Sweden and the EU must deal with, the world that also forms the framework around Sweden's EU policy. * * * Ten years ago, the world economy was dominated by the richest countries in the world, or what is sometimes offhandedly described as the 'developed parts of the world'. These countries represented about two thirds of the world's entire GDP. Since then, this share has decreased to about half, and in ten years it may be down to 40 per cent of the world economy. In other words, it is no longer the world's richest countries that set the global growth trends. Instead, it is expected that most of the world's production will, increasingly, take place in emerging countries. In 2011, developing countries are expected to have an average growth of 6 per cent. This is twice the growth of the richer parts of the world. Just look at the fact that the Chinese economy doubles every six years, and that India is not far behind. Now that we are speaking of the world's 'richer countries', we should also add something. It is not only a question of their importance decreasing with regard to global economic development. In addition, many of the world's rich countries live beyond their means. Just consider the fact that deficits and national debts in large areas of the rich world have spiralled out of control, and that growing debts are, to a large extent, financed by loans from the Chinese surplus. China is also expected to surpass the US this year when it comes to the production of goods. This means that the US - which has been the world's leading manufacturer for one hundred years - will have to settle for second place. This is a historical change, but just another step in the same direction for China. The country is already the world's biggest exporter. At the same time, the US's share of world trade has been halved since the Second World War. But the developments we see around the world are not limited to growth in China or Asia. Recovery of the world economy following the financial crisis is being led by emerging and developing countries on a broad front - in Latin America, parts of the Middle East and even in Africa. When, at the summit in Pittsburgh in 2009, I heard President Obama admit that the G20 would replace the G8 as the foremost forum for international economic cooperation, I was also witnessing a confirmation of the emergence of this new world. A more equal world. A world where the role of developing and emerging countries is at least as big as that of the richer part of the world. * * * It is in this new global arena that the European Union must contend today. A world with new actors, with new opportunities and challenges. And it is in light of this that Sweden's current European policy, which I have been asked to speak about, will be formed. * * * * Let us agree that the European Union faces many challenges. I am not the first to say this, and I will certainly not be the last. There have also been those who have been clear about what is at stake. In its report from last year, the Reflection Group, led by Felipe Gonzales, stated that the EU faces a choice - reform or decline. These are strong words, but also an important wake-up call for Europe. Today, I especially wish to emphasise five questions to which I believe the EU must find new answers in order to respond to a new world in a new era: - how can the EU increase its economic growth, employment rate and competitiveness? - how can the EU combat climate change? - how can the EU promote and safeguard people's mobility across borders? - how can the EU modernise its budget? - how can the EU be a strong foreign policy actor that champions the values on which European cooperation is based? The most obvious of these challenges lies in Europe's economic situation. In the global trends that I described earlier, the EU is falling behind and can no longer compete with the growth in the rapidly growing developing and emerging countries. Many EU Member States have poor growth and low productivity. This is combined with high structural unemployment and a lack of flexibility in the labour markets. All this leads to the EU losing ground to the rest of the world. And this problem generally dominates all of the discussions and meetings I have with European colleagues. This year, growth in the EU is expected to remain at 1.7 per cent. At the same time, many EU Member States are struggling with serious public finance deficits and debts averaging 80 per cent of GDP. What, then, can the EU and the Member States do to reverse the trend? These days, there is a lot of talk about improving financial management. That the EU needs some kind of economic regulation or a new competitiveness package. And many initiatives have been launched in this area in the wake of the economic crisis. The EU has introduced a 'European semester' that is to coordinate reviews of the Member States' budgetary and structural policies. The European Commission has presented a number of legislative proposals to improve governance of macroeconomic imbalances, strengthen the Stability and Growth Pact and strengthen the Member States' national budgetary policy frameworks. A temporary crisis mechanism has been established and a decision on a permanent crisis mechanism is expected to be taken at the Spring Council this March. All of this is very welcome. There have been shortcomings in financial management within the EU, and Sweden has therefore actively pursued a more efficient structure for this purpose. But at the same time, I want to state that the solution to the EU's problems is not a matter of constantly inventing new processes or regulations. It is also a matter of fully using and respecting the powerful tools already available to the EU and which are already in place in its toolbox: the internal market and the EU's new growth strategy. Beyond this, the EU must be better at respecting the regulations already in place through the Stability and Growth Pact; at reducing budgetary deficits and ensuring sound public finances; at showing political determination to support necessary national reforms. * * * * * Let us begin with the internal market - the world's largest single market. There is need here for both modernisation and reinforcement. Completion of the internal market is expected to increase the EU's GDP by as much as 10 per cent. According to the European Commission, more effective rules on the way Member States recognise one another's goods and services alone could lead to a 1.8 per cent increase in GDP. Sweden will therefore continue working to ensure that the potential of the internal market is fully used. For a more efficient services sector. For the development of a digital internal market. For a common patent system. For simpler regulations and standardisation. Achieving success in this work is important for the entire EU, but also for Sweden. Almost 70 per cent of Sweden's trade takes place within the EU. This means that Swedish jobs and Swedish welfare are directly dependent on a developed and efficient internal market. * * * * * Last year, the European Union also agreed on a new growth strategy - Europe 2020 - which has replaced the previous Lisbon Strategy. The strategy establishes five quantitative objectives: for the employment of women and men, for investments in research and development, for the fulfilment of the EU climate targets, for the level of education and for a reduction in social exclusion. Let us take a closer look at one of these targets: the importance of greater participation of women in working life. This is an issue that I pursued intensively on Sweden's behalf ahead of adoption of the strategy. Today, the average employment rate for women in the EU is about 52 per cent. In Sweden, it is almost 62 per cent. This is if we look at the percentage of the population between the ages of 15 and 74. For men, the corresponding figures are an average of 64 per cent in the EU and 67 per cent in Sweden. Although Sweden has made great progress when it comes to giving women and men equal opportunities, we are not perfect. There is more for us to do, and we must do more. This applies to women's opportunities to work as a whole, but perhaps in particular if we consider the fact that we have a large proportion of women who work part-time. It is obvious that greater gender equality in working life would be advantageous. Imagine if the percentage of working women in Europe increased to the same level as that of men. Studies show that if that were the case, we would not only create greater freedom for women and remedy today's waste of human capital resources, but EU growth could also increase by about 25-30 per cent. In fact, the path to achieving success on this issue is also rather simple. Put a stop to discrimination against women in working life. Design tax and benefit systems that encourage everyone, including women, to work. Expand pre-schools and childcare to make gender equality at home and at work possible. This is really all it takes to make significant progress. If the EU Member States want to achieve their ambition of being modern societies, this issue can no longer be ignored. It is time to start acting. The Europe 2020 strategy also highlights the importance of investing in education, research and development. These, too, are areas that are of crucial importance to each individual country, but also to the EU as a whole. We agree with this and Sweden tops the EU table when it comes to investments in research and development. A good education opens the door to equality and development. It gives all individuals an opportunity to participate in and contribute to our society. Similarly, investments in research and development are a necessity for successful European industry - if we do not wish to see all research centres located in Asia in the future. The objectives are in place, and key areas have been identified. Now we must ensure that the new growth strategy does not meet the same fate as its predecessor, the Lisbon Strategy. We need to move from words to deeds, because the strategy focuses on key components in an effective reform policy; a policy that could lay the foundations for more jobs, increased growth and thereby better welfare in Europe.

* * * * * And this brings me on to perhaps the most crucial point on the path to a brighter future for the EU. The political willingness to undertake national reforms. The EU can improve frameworks, supervision and incentives for financial management. The EU can take decisions on new growth strategies and competitiveness packages. But at the end of the day, it is about political willingness to take difficult decisions. And specifically decisions over which the Member States themselves have control. In order for the EU to see high economic growth and employment, each Member State must be prepared to undertake the necessary national reforms. In the initial stages, in order to reduce budget deficits and restore healthy public finances. This may require reform of everything from fiscal policy, social security systems and pensions to social insurance and education systems. One important basic factor is establishing, in word and deed, that it must always be worthwhile to work. It is also important to have sufficiently stable finances to be able to afford to invest in the future. It must be acknowledged that certain reforms are difficult to implement. Particularly if the positive effects only become apparent in the longer term. But they must still be undertaken - because there is no alternative. Our own experience in Sweden also shows that reforms can pay dividends more quickly than expected. During the crisis in the 1990s, we began the laborious task of reforming Sweden to make our country better able to deal with the future. This work was intensified after the elections in 2006. During the financial crisis and now, following the crisis, we have received important evidence of the reforms we have undertaken. Last week, we received figures showing that Swedish growth in the fourth quarter was 7.3 per cent. At the same time, unemployment is falling at the second-fastest rate in the EU and our national debt stands at an all-time low of 39 per cent. Our export industries are running at full capacity. Compare these figures with a national debt of 80 per cent and budgetary deficit of 10 per cent during the 1990s. Our experience certainly shows that reforms pay off. * * * * * The EU agenda is currently dominated by economic issues. At the same time, we must not forget the other major challenges facing the EU. And here I am thinking in particular of perhaps the most crucial issue facing not only the EU, but the entire planet - the issue of our climate. The truth is that Earth is running a high temperature. And this is caused by humanity's dependence on fossil fuels. The generation of today and previous generations have taken liberties, the consequences of which will be borne by our children and grandchildren. And we are already seeing the effects; effects that will become increasingly clear. Simply advocating aggressive national initiatives in small countries will have no effect. It will not solve a global problem such as climate change. To be quite honest, Swedish initiatives will have no direct global effect whatsoever, as Sweden is only responsible for less than 0.2 per cent of global emissions. But by working within the EU for an aggressive and credible climate policy, Sweden has a better opportunity to influence global developments. And we must utilise this opportunity. A first important task in the spring is to formulate the EU's long-term climate strategy. Sweden wants to set interim targets for 2030 and 2040 that will make it possible for the EU to meet the agreed target of reducing greenhouse gas emissions by between 80 and 95 per cent by 2050. Otherwise we will fail to achieve the two-degree ceiling on global warming set by the UN. We want to see long-term and ambitious targets; long-term and ambitious climate targets that give industry the necessary predictability to dare to invest in green technologies. But we must also ensure that we have effective instruments to achieve the targets we set. If we want to reduce the use of fossil fuels, it must cost more to use them. In Sweden we have had a carbon dioxide tax since 1991. It has been the single most effective initiative enabling us to see substantially decreasing emissions in our country, while at the same time demonstrating continued growth. What is more, this is actually a trend that is amplified over the years. When I described Sweden's climate and growth journey four years ago, we had seen economic growth of 36 per cent in this country since 1990. At the same time, emissions had fallen by seven per cent. We recently received new data on developments: since 1990, growth has increased by 50 per cent and emissions have fallen by 17 per cent. Sweden has shown that it is possible. We want others to mirror our solutions. For this reason, Sweden will continue to push for the introduction of a harmonised minimum level for carbon dioxide taxes in the EU. This kind of tax in combination with an emissions trading system represent two effective and visible instruments with which to achieve our targets. The results of the UN Summit in Cancún in December constitute a small step forward in the international negotiations. It is positive that the Copenhagen Agreement has been formalised as a part of the UN process, and that we were able to agree on important principles for measuring, reporting and follow-up. However, the basic problem still remains. The countries with the highest greenhouse gas emissions have not made sufficient emissions commitments. And unfortunately, I do not envisage any fundamental change in attitude in the short term among crucial countries such as the US and China. Without these countries, which today account for almost 50 per cent of greenhouse gas emissions, we will not be able to halt climate change. The EU is the most important trading partner for both China and the US. This is a strength that we can use, and that we should use - specifically to influence climate policy in these countries. * * * * * In my view, there is important value to be gained from people's freedom. In the EU this is reflected in the possibility for people to move around freely. However, discussing free movement within the EU is not an adequate response to the issues we are grappling with today. To free movement, we must add three other elements: the opportunity for people to move to the EU, Europe's need for labour, and our duty to take in those in need of protection. The five-party agreement on migration policy concluded last week can be seen in this context. Our five parties agreed that Sweden must have a migration policy that is humane, legally secure and organised in nature, and that affirms openness. And it must focus on the work-first principle. With this agreement, we closed the door of influence on those political forces that want to close Sweden off from the rest of the world. In a Europe in which there are forces that want to put up barriers and exclude people, Sweden chose a different path. But the task is not yet complete. We still need to stand up for openness built on the work-first principle. We need to stand up for solidarity with, and responsibility for, those in need of protection. And we need to stand up for these in both Sweden and Europe. This is important at a time when major migration and refugee flows may emerge in light of events in North Africa. At the same time, we cannot close our eyes to the fact that free movement and openness bring challenges. These include cross-border organised crime and terrorism, phenomena that the EU must combat, while maintaining the requirements of legal security and proportionality. In turn, these events clearly require closer judicial cooperation in the EU. During the Swedish Presidency, we established an ambitious programme on these issues, known as the Stockholm Programme. The aim is EU cooperation that creates certainty and security, and that also offers added value for individuals. There are people in need of protection in the migration flows from both the east and the south. Sweden and the EU must continue acting to ensure that people fleeing persecution are given protection. We must step up our efforts for a joint asylum system in the EU. All asylum seekers must be treated the same, regardless of the Member State responsible. Short-term border control measures in the Mediterranean must be supplemented with more long-term initiatives in North Africa. We need a constructive dialogue in close cooperation with the UNHCR and others in order to find sustainable solutions to migration problems in the Mediterranean within the framework of a secure right of asylum. In the longer term, it is important to broaden and intensify cooperation with countries of origin and transit on the other side of the Mediterranean. This can be achieved within the framework of Member States' bilateral assistance, and with the instruments available under the EU Global Approach to Migration. The EU must also improve cooperation with North African countries. Otherwise, we will not be able to tackle the causes behind people choosing to leave their home countries and seek a new future in Europe. In this connection, I would like to mention the enormous demographic challenge that Europe is facing - with an ageing population and declining birth rates. Shrinking working populations have to pay for increasing numbers of pensioners. This is a development that will put great pressure on pensions, health care and welfare systems. This is yet another reason to affirm openness to the rest of the world. Europe will soon have a massive need for labour immigration. It will not be enough to stimulate increased labour market participation among women and the elderly. Sooner or later, Europe will have to formulate a new policy for attracting labour from countries outside the EU. This is something that Sweden has already realised and set in motion. Otherwise, the path forward is inevitable: EU Member States will have to implement drastic tax increases, with negative effects on both growth and welfare. * * * * * When we look at all the different challenges facing the European Union - how we can increase growth, create jobs and reduce social exclusion; how we can draw up a better climate policy that safeguards our children's future; cross-border crime; and targets for increased investment in education, research and development under the Europe 2020 strategy - it is natural that we ask ourselves questions about the joint resources and budget that we have available to deal with these challenges. The EU budget corresponds to more than one per cent of the total gross national income of the EU. We are talking about a large sum: SEK 1260 billion, or one and a half times the Swedish budget, in 2010 alone. But the way in which this money is spent cannot be said to correspond to the challenges I just mentioned. Inefficient, obscure, bureaucratic: this is how the EU's management of its resources is often perceived. This is not a baseless accusation. Just five per cent of the population of the EU work in the agricultural sector, a sector that, moreover, only accounts for 1.5 per cent of the total GDP of the EU. And yet 41 per cent of the EU budget went to this sector in 2010. Cohesion policy, that is, initiatives to reduce the gap between richer and poorer regions, is important. It was particularly important in its original guise 50 years ago. But is it reasonable that it currently accounts for 35 per cent of the EU budget? Given the studies that indicate doubts as to the benefit of many of the initiatives undertaken? Given all of the other challenges that Europe has to tackle? It is clear that the EU budget has long since passed its sell-by date. We must think again, and think in new ways. We need a growth-oriented budget that promotes the EU's competitiveness. A budget that prioritises investments in research and development, innovation and judicial issues. A budget that strengthens the EU as a global actor, and that reflects the difficult budgetary situation in several EU Member States. Sweden is arguing for a restrictive budget at a level well under one per cent of the EU's total gross national income. We are pushing for this, and will continue to push specifically for this. Our message is clear: the EU system does not need more money - the money already there must be put to better use. * * * * * The story of European integration so far is largely the story of an attempt to secure peace, freedom and prosperity here in Europe. And that task is certainly not complete. But in this increasingly clear age of globalisation, it is obvious that we must have a Europe that is able to be actively involved in shaping global developments, too. The EU is the world's largest single market. Along with the European Commission, EU Member States account for 60 per cent of global development assistance. If we work together more effectively, we will also be able to draw benefits from these strengths. The Treaty of Lisbon created better prospects for the EU as a foreign and security policy actor. Under the leadership of High Representative Catherine Ashton, a common European European External Action Service is now being established. It should become a hub for the various national foreign services, which will remain in place. Some of our most important tasks are, naturally, to be found in our own part of the world. Our willingness and ability to tackle these will, to a large extent, determine our credibility and strength on other issues, too. And in recent months, the challenges in our own neighbourhood - setbacks to democracy and freedom to the east, successes and budding prospects of democracy and freedom to the south - have come into focus once again. At the moment, the developments in North Africa and the Middle East are naturally the focal point. And just as we want Europe to shine the light of freedom to the east, we want Europe to do the same to the south. It is a matter of offering inspiration and support. The significance of current developments cannot be overstated. Remember how, a decade ago, many feared that this region would listen to the messages of the fanatic who has since disappeared into a remote cave. Instead, the message from Tahrir Square in Cairo was a demand for democracy and freedom, and a functioning legal system. The path will not be simple or straightforward. The transformation has only just begun. But now we must be prepared to support their political and economic transformation - while at the same time respecting the fact that this is their democratic revolution. The European Neighbourhood Policy must now be reshaped, honed and improved. It must become a clearer support to open societies and open economies in the south, as in the east. It must show that Europe has the will and the ability to take responsibility in decisive transformations. We want to shine the light of freedom - not least in our own corner of the world. * * * * * Sweden has been, and will continue to be, a clear advocate of an open Europe. The right of every European nation to apply for membership of our Union is clearly stated in our Treaty. And we should welcome the fact that increasing numbers of nations want to be involved in our open community. If the door to the EU were to be closed, the development of these nations would probably move in directions that would have a highly negative impact on us. This is clearly the case in south-eastern Europe, where around 100 million people in Turkey and the countries of the Western Balkans are knocking on the door. We must not underestimate the difficulties of undertaking all the reforms needed for membership to be possible. But it is these reforms that essentially give membership its great value - becoming part of a community of open and free societies, of competitive and functioning economies. I hope that we will soon be able to welcome Croatia as a new member, and I hope that Serbia and the other countries in the region will soon be on the same path. The fact that all of the countries in the region that not long ago was torn apart by brutal wars can now move in the same direction, with the same goals, is, not least, a question of safeguarding peace. Bosnia has special significance in this respect. It is important that the support in our Riksdag for Turkey's path towards future membership is strong and broad-based. To me, it is obvious that an EU that also includes a country with the kind of economic dynamism represented by Turkey will be a stronger Union, and to this we can of course add that we would thereby demonstrate how our Europe can unite cultures and traditions that in the past may even have opposed each other. Today, it is not possible to imagine the EU as a strong global actor without the UK as a member. I am convinced that tomorrow it will scarcely be possible to imagine the EU as a strong global actor without Turkey as a member. But it is not only about the enlargement process strengthening us in south-eastern Europe. With Iceland as a member, the Nordic voice in the EU would be strengthened, along with the EU's opportunities in the increasingly important Arctic region. Our support is strong and self-evident. Today, the challenges in the European neighbourhood are clear. They make it even more important to move forward with the Eastern Partnership, which was initiated by Sweden and Poland and aims to strengthen legal systems, democracy and economic development in these countries through closer integration. Developments in Belarus since December are a serious setback. Our reaction has also been strong and explicit. We condemn, and are imposing sanctions on, the leaders, and we are broadening our support to those continuing their efforts for a free country. And we are thereby sending a strong signal to the whole of the rest of the region. Naturally, the international challenges facing the EU go far beyond just these. But if we cannot tackle these, we probably cannot tackle the others, either. * * * * * But EU foreign policy is also about standing up for values and principles in the global arena. Current developments in North Africa serve as a reminder of the importance of the EU's community of values. With a strengthened role, the EU can present and work for our fundamental values with a clearer voice - for democracy, human rights, the rule of law, freedom and openness. Because the EU is a Union that rests on a solid foundation of democratic values. And this should be one of our most important and valuable export products. These are values that we share with the United States. In light of the political and economic transition in the world, it is more important than ever that the EU and the US join together to stand up for these universal values and together act as a voice for freedom and democracy. A strong transatlantic link must therefore continue to be a key part of EU cooperation. The European Union must also become better at projecting and safeguarding these values and interests in relations with other strategic partners. We must be able to discuss trade and climate policy, as well as democracy, human rights and the rule of law with all countries, including Russia and China. There are many challenges: increasingly open global trade is in everyone's interests; the Doha Round must be concluded; issues of freedom and judicial matters; peace and conflict resolution; and new challenges such as freedom and security on the Internet. Sweden wants to see a Europe that takes the lead. * * * This broad depiction of Europe and the EU highlights a wide range of issues. There can be no doubt that there are many challenges. Similarly, we can observe that there is more for the EU to do and it must do more, but in particular, the EU must do the right things. This applies in areas from economics, growth and employment to openness, climate policy, development and security. Not least, it applies to the question of the role that we want EU cooperation to play in the world. In its darkest moments, Europe is sometimes described as a continent in danger of being consigned to a role as a museum - nice to visit, but lacking in influence and future prospects. This is not a flattering image. In almost five years as Prime Minister, I have attended 25 European Councils, and I am currently the seventh-longest serving head of government among the 27 EU Member States. This has given me a personal view, and some experience, of the EU in practice. I have experienced the worst aspects of cooperation. When individual countries block progress for the sake of their special interests and act only for their own benefit, or when a small group of countries try to impose their will on all the others. In my time, I have also experienced the best of the EU. I have seen how the Union and its Member States can rise up and pull together to tackle important challenges jointly and decisively. This has been particularly evident in the ability to contribute to democracy and growth in our neighbourhood and in new Member States, in an aggressive climate policy and in the measures taken during the financial crisis. I have seen the potential. And my conviction as to the power of this cooperation has been strengthened. And we must not forget what the EU has already achieved - from the creation of the world's largest single market with, in part, a common currency, to its enlargement from six to 27 Member States. Quite simply, I cannot imagine an alternative to the edifice that the countries and peoples of Europe have managed to build, brick by brick, in the form of the EU. The EU is the tool with which to resolve many of our future challenges, but the EU is also more than a tool. European cooperation is an edifice built on common European values. It is a stronghold against protectionism, national chauvinism and self-sufficiency. It impedes and stands up to those who would crush freedom, democratic principles, human rights and openness. It is also when the EU succeeds in combining all its different strengths. And when the EU understands that the future lies in the changes we make internally. It is then that our cooperation is at its best. It is then that challenges are tackled decisively. And it is then that the EU delivers, to the benefit of its citizens. In short, it is then that the EU is what we want it to be. Speech Hamburg 28 February 2011 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt in Hamburg, 28 February 2011 A more competitive Europe: the Swedish reform experience - an example for Germany?

Visiting the Free and Hanseatic City of Hamburg, arriving from Sweden and the Hanseatic city of Stockholm, I cannot help but touch upon the historical ties between us - because the paths of our ancestors kept crossing and, as a result, influenced the way we live today. In fact, we have had quite a stormy relationship. From the castle of Hammaburg came Bishop Ansgar, considered to have brought Christianity to Sweden. At the same time, the Vikings were not so easily convinced of Ansgars ideas and destroyed parts of Hamburg in 845. During the days of the Hanseatic League, trade and economic activities between our people flourished. We were friends again. But then - I am sorry to say - old habits returned. And we - and the Danes as well - tried to conquer you. By the 17th century, we had become somewhat more civilized, and in 1620 Sweden's first actual postal route was established; the route was Stockholm-Markaryd-Hamburg. And I could go on. But I had better stop there or I will not reach the present day, which is the reason for your invitation and the actual reason for my being here. Yes, the world has changed from the times of the Hanseatic League. And the world is still changing. Today, perhaps more rapidly than ever before. In today's globalised world, decisions in other parts of the world affect us, and often in ways that are hard to foresee. We also live in a world where information, knowledge, money - and people - move, interact and cross borders in a way never before seen in history. Added to this, we see a multi-polar world order emerging. And there is no single superpower dominating the global scene today. Developing countries growth increased by 7 per cent in 2010. This is twice as much as high-income countries. In fact, the European Union is estimated to grow by only 1.7 per cent this year. And during the last five years, the countries outside the OECD have accounted for two thirds of global growth. This means that the recovery from the financial crisis has been led by emerging and developing countries. And as we are studying these global growth trends, other profound changes are taking place: China's production of goods this year is expected to surpass that of the United States. This means that the US will drop to second place after being the world's leading manufacturer for more than a hundred years. This is a landmark change. But it is only another step for China, which is already the world's largest exporter of goods. And last year, China overtook Japan and now has the third largest GDP in the world after the European Union and the United States. But the shift in the global economy is not just about China or even Asia. We are seeing fast-growing emerging economies all over the world - in Latin America, parts of the Middle East and in Africa as well. For example, output in Sub-Saharan Africa expanded by an estimated 4.7 per cent in 2010. Looking at these global trends, we as Europeans must ask ourselves: What direction Europe is heading in? It is rather obvious that the European Union is no longer at the forefront of global economic activity, that we are losing our competitive edge to fast-growing economies. Let's face the truth: Europe is lagging behind. Most of the European economy is suffering from weak growth and low productivity, as well as high structural unemployment. It suffers from inadequate labour market flexibility, and a large part of the workforce is either outside the labour market, has outdated skills, or both. Against this backdrop, the message last year from the Reflection Group on the Future of the EU, led by Felipe Gonzalez, did not come as a surprise. "The choice for the EU is clear," it said "reform or decline." And time is running out. The Group also pointed out a number of areas where urgent action is needed. I would like to highlight three of these: - renewing Europe's economic and social model - investing in education, research and innovation - taking on the challenge of demography Today, I would like to give a Swedish perspective on these challenges. Clearly, there is no one-size-fits-all' remedy. Each country has its own history and preconditions that require special attention and measures. And I will leave it to you to decide if the often hard lessons we have learned can be of value elsewhere. The Swedish experience is the result of reforms carried out in the 1990s and in recent years. And I believe that, as a consequence of these reforms, a new image of Sweden is beginning to emerge. We are moving from being a high-tax society to a society that encourages work and entrepreneurship. Step by step we are strengthening individual freedom and the freedom of choice. We have high economic growth and high ambitions in the areas of welfare, employment, knowledge, innovation and environmental thinking. One major reason for our strong position today is that we learned our lessons back in the 1990s. Between 1990 and 1993, Sweden was hit hard by a deep recession. GDP fell for three years in a row. Employment fell and unemployment climbed to 8 per cent. Public finances suffered severely, with deficits of around 10 per cent for several years, and the debt grew from around 45 per cent of GDP to nearly 80 per cent. The recession was a result of prolonged mismanagement. During what could be described as Sweden's mad quarter of a century, incentives to work were undermined by a sharp rise in taxes and a major expansion of subsidies and social benefits. Combined with factors such as a failing education system, this led to falling employment and rising social exclusion. Sweden also tried to cope with increased international competition through subsidies, instant devaluations and a loose grip on inflation. And these policies had only one long-term result - they undermined public finances and made our economy extremely vulnerable. And in the early 1990s, we stood face to face with the consequences. It was a tough time, an extremely severe situation for Sweden, but one which forced us to introduce a number of long-term reforms. The budget process was reformed. Clear targets were introduced for inflation and public finances. The Swedish central bank was guaranteed independence, which helped to strengthen monetary policy. The pension system was reformed and a tax reform implemented that amended the worst aspects of the Swedish tax system. Among other things, the electoral period was extended from three to four years and Sweden became a member of the European Union. In the early 1990s, the Government also implemented a privatisation programme and deregulated important markets in Sweden. All of these reforms went a long way towards extricating us from the situation back then. But learning lessons from the 1990s simply was not, and is not, enough. It does not fully explain Sweden's current situation. It does not explain why we have been successful in managing the crisis this time around. As I mentioned earlier, Sweden had long had a growing problem of social exclusion. This was not visible in the official unemployment figures. But if you added up the people on sick leave, in early retirement or on other social benefits, it meant that one in five Swedes of working age was outside the labour market. One in five Swedes of working age. Over a million people. Outside the labour market. Living on social benefits. This was the situation when my Government came into office in 2006. I believe that if you want to solve a problem, then you need to go to its root. Cosmetic surgery will not do. And faced with social exclusion and falling employment, you must be prepared to take a long-term perspective. This was why we introduced the work-first principle. To put it more precisely: we want everyone to be able to find a job that matches their own capacity to work. It must be more worthwhile to work, it must be easier and cheaper to employ people and more companies must start up, stay and grow in Sweden. This, in short, is what the work-first principle is all about. Accordingly, step by step, we have lowered income tax by implementing an in-work tax credit for low and medium earners. So far, this has meant, for example, that an assistant nurse has received tax credits worth one month's extra wages every year. In 2011 total income tax reductions amount to 2 per cent of GDP. We have also introduced better conditions for running a business and employing people. Taking our starting point in the value of free enterprise and entrepreneurship. We have encouraged employers to hire people with little or no connection to the labour market through special tax deductions. We have cut red tape and encouraged entrepreneurship in the welfare sector. And perhaps most importantly, we have reformed the unemployment insurance and sickness insurance systems. Implementing more stringent requirements, adjusting benefit levels and introducing clearer targets. Moving away from passivity, towards a greater focus on coaching, work placement schemes and employment training. Thanks in large part to the work-first principle, we have managed to lay a solid foundation. As a consequence, we met the current downturn with a historically high level of employment. With the number of people on sick leave halved. And the number of people in early retirement decreasing for the first time in 35 years. We had more hours worked in the economy and lower unemployment, higher tax revenues and less pressure on social welfare programmes. And despite the crisis, we stuck to our work-first principle. On the whole, our crisis management did not involve new policies but strengthening what we considered to be good policies for Sweden, both in the short and long term. The results? Employment today is higher than it was before the financial crisis. And unemployment in Sweden is falling at the second fastest rate in the EU. Before moving on, I would like to mention another important aspect of Swedish society linked to work and growth, namely gender equality. Sweden has the major advantage of being a gender-equal society. Good childcare provision and pre-schools have enabled women and men to participate in the labour market on more equal terms. This creates not only greater personal freedom, but also a higher level of growth and development. Of course, more needs to be done, and more will be done to give women and men equal opportunities on the labour market. And more needs to be done also in other European countries; otherwise we will not reach the growth potential we actually have. We must face the facts. Today, the employment rate among women in the EU is 51.7 per cent, among men it is 63.9 per cent. If employment among women and men in the EU was the same, then the potential increase in growth could be estimated at between 25 to 30 per cent. It is obvious. We cannot discuss a renewal of Europe's economic and social model while ignoring the issue of gender equality. Now, let me turn to the second challenge for Europe outlined in the Reflection Group's report - education, innovation and research. I believe that investments in these areas are key to a country's future. The foundation for all of this lies in the freedom of choice for the individual, but also in a high quality education system. Education opens doors to equality and development, giving every individual a fair chance to participate in, and contribute to, society. My government is now pushing through a number of reforms to strengthen the education system in Sweden. This year, we will have a new grading system in place. We are introducing a clearer, knowledge-oriented school curriculum and a new pre-school curriculum with greater educational content. To provide support to help teachers do their jobs well, a teachers package is being implemented with a Boost for Teachers, stronger educational leadership, further education for teachers and research schools. There will be more teaching hours in schools, and a stronger focus on maths, technology and science. We are also making important investments in research and development. Public and private investments in Sweden now amount to almost 4 per cent of GDP, which according to OECD statistics is second only to Israel. This has also put Sweden at the top of the European Commission's scoreboard for innovation. In the end, a good research and innovation climate is the result of a dynamic society open to new ideas. We need openness towards the outside world so that we can absorb new knowledge, influences and impulses, but also to spread our own innovations. Closed borders, protectionism or being afraid of other cultures simply will not do. Now let's turn to the demographic challenge. Looking at the developments from a historical point of view, this challenge becomes even more obvious. Almost a hundred years ago, in 1913, Sweden introduced its pension system and for the first time set a pension retirement age. The age for receiving a pension was set at 67. At that time, the average life expectancy in Sweden was 56 years. As you can understand, the idea was not really that everybody should enjoy the benefits of retirement. You were expected to work, and to work until you died. And for the few who were still around at an older age, there was a pension system. Today, we have the opposite situation: We are living longer and longer in our part of the world. Most of us will probably live to see our 100th birthday and more. This is a fantastic development. There's just one problem. As the number of pensioners increases, the number of people of working age declines. And as fewer and fewer people work, we will face the risk of not being able to afford the welfare we expect and take for granted. I don't think raising the pension age to 90 will be a popular way to deal with this. What we need to do is to encourage more people to stay in the workforce as they get older, and more people to enter the workforce at an earlier age. The latter is partly dealt with through the work-first principle and promoting good education, whereas the former needs another approach. Reforming your way out of the pay-as-you-go system is, of course, essential. Sweden did this back in the 1990s and introduced a system in which pensions are linked to the number of years worked and to earnings. This has boosted incentives to work - and to work until an older age. In addition to this, we have also introduced special tax credits for people reaching retirement age and staying at work. In fact, they get a double in- work tax credit. Meanwhile, employers hiring people who have reached the age of 65 get special tax deductions. We have also introduced a flexible retirement age, which gives people the right to continue working until they are 67. And we are now discussing raising this to 69. As a result of these reforms, 12.5 per cent of the Swedish population between the age of 65 and 74 is actually still working. And the figure is rising. A great deal remains to be done, but we have began to tackle demographic challenges by providing incentives to work and viewing older people as an asset rather than a burden. We have chosen to meet with the challenge through the work-first principle, not by questioning welfare services or introducing insurance solutions for health care or elderly care. The economic and social model. Education, research and innovation. The challenge of demography. These are all issues of major importance for Europe and our societies. However, they will quickly diminish in importance if public finances are not in order. And this brings me to perhaps the most crucial message. Sound public finances are, and will remain, a fundamental prerequisite for long-term, sustainable economic policy. We have made it clear that we will honour this principle in good times and bad times. And there are many reasons why. A fiscal policy that is not sustainable in the long term leads to debts that threaten growth, welfare and employment. A fiscal policy that is not sustainable in the long term affects the whole of society. But the hardest hit are those who are most in need of security and welfare in order for their daily lives to function. This is always the case. And it is even more so for a small and open economy. Sweden cannot be compared with the US. We cannot rely on our size to help us cope with financial instability, deficits or public debts. If we ignore this fact we will quickly be punished by the financial markets, and punished hard. We therefore need to keep our public finances stable and in order. And if successful, we will not only be able to cope with crises and afford reforms - we will also be an attractive country to invest in and to do business with. This was why we clearly stated, right back in 2006 when my government came into office, that we would make sound public finances and sustainable economic policy one of our main priorities. Consequently, we maintained a surplus in public finances during the good times, and we set about paying off the public debt. By doing so, we prepared Sweden for a rainy day. And we began preparing Sweden for long-term challenges, such as an ageing population, and were able to make investments for the future. When hit by the financial crisis, this policy of responsibility put us in a much stronger position; perhaps a stronger position than ever before. And all through the crisis, we stuck to this policy, saying: "If the crisis was created by people borrowing too much, the solution cannot be for governments to act in the same way." We did not listen to the loud cries for public spending. We supported people through active measures, rather than supporting industries through subsidies, or banks and financial institutions through funding without setting clear conditions. We did not accept protectionism or spend taxpayers' money to save companies that were not competitive. We said: "When the ship is sinking, our main priority should be to save the sailors - not the ship." As a result, Sweden's public debt was lower at the end of last year than it was back in 2006. Down from 45 per cent of GDP to around 39 per cent. I still consider this as one of our most crucial decisions for managing the crisis. If we had abandoned this responsible approach, we would have ended up in a totally different situation. Sound public finances. If Europe does not take the need for this into serious consideration, then the years ahead will not be filled with reforms for the future. Or even discussions on the future. Instead, we will have to deal with welfare cuts and rising taxes - in other words, with a situation we should all be determined to avoid. Let me conclude. Europe is at a crossroads. It can choose to undertake the necessary reforms or it can choose to see its standards of living decline. We all know what to do. We have the rules of the Stability and Growth Pact. We had the Lisbon Strategy, now replaced by the Europe 2020 strategy. As a response to the last economic and financial crisis, we invented the European Semester and the Annual Growth Strategy. And we have an internal market whose potential is not yet fulfilled. If we implemented all the targets and goals that we have already set, Europe would be the champion of competitiveness and the star of economic growth. But it is not the formulation of targets that counts - it is only their implementation that can get results. And here there are no short cuts. It is now up to each and every Member State to undertake the national reforms needed. Even if it hurts. Even if the positive effects are only seen in the long run. Because there are no alternatives. And our experience is, once you start reforming it pays back quicker than you expected. Only through reforms will the European Union be able to boost economic growth and employment. Combat social exclusion and poverty. And enable people to build a better life for themselves. I believe that, given the right tools, every individual has it in them to make a difference. And that politics should be used to create the conditions to make this possible. Individual freedom. In those two words lies the best foundation for development and growth in any society. That counts for Europe as well. And I am sure that Europe will rise to the challenge. It always has. We just need to look at what the EU has succeeded in doing so far - creating possibilities for people by building the world's largest single market, enlarging the Union from 6 to 27 and adopting a single currency. The history of the European Union is living proof of what a former editor of the Economist, Walter Bagehot, once said: "The great pleasure in life is doing what people say you cannot do." Thank you. Speech Stockholm School of Economics i Riga 18 February 2011 Fredrik Reinfeldt, Prime Minister Speech by Prime Minister Fredrik Reinfeldt at Stockholm School of Economics in Riga

I am very pleased to be here today at the Stockholm School of Economics in Riga. 2011 is a special year. Twenty years ago we witnessed dramatic events in Latvia and the other Baltic countries. Twenty years ago the courage and determination of the people in Latvia, Estonia and Lithuania led to these countries regaining their freedom after almost fifty years of Soviet occupation. It is one thing to gain independence. But it is an even bigger challenge to gain freedom, built on democratic institutions and values. Throughout history we have seen many dreams of freedom crushed. We have seen conflicts and tensions erode good intentions and pave the way for new oppression and human suffering. But not here in the Baltic region. You managed to gain both freedom and independence. Not immediately, but through a long and focused struggle to achieve the goals that you had set. The development we have seen in the Baltic region over the last twenty years is of historic dimensions. Democracy, the rule of law and a market economy are now the pillars of these dynamic countries; countries that have also become members of both the European Union and NATO. The Baltic countries have returned to Europe, and Europe to the Baltic countries. Swedish sympathies with the Baltic independence movement were strong. And this solidarity was manifested in many different ways. One example was the weekly, public 'Monday meetings' on Norrmalmstorg in Stockholm, which became a tradition. Turning to the present, we are glad that there is no longer a need for those meetings. Nonetheless, we look forward to calling one more. This will take place in August as part of the events that Sweden will arrange throughout 2011 to highlight and commemorate the fact that 20 years have passed since the restoration of independence and of diplomatic relations. With the process that led up to the restoration of independence in the Baltic countries, in a way, Sweden rediscovered some of its own history. The bonds between our countries go back a long way. And history once again came full circle, as the Baltic Sea regained its role as a unifier, rather than a divider between East and West. As it had done previously in history, the Baltic Sea once again opened the door to trade, investments and exchanges. This has led to increased growth, employment and development. Today, the economies in the Baltic Sea region are closely interlinked - as, in fact, are all the economies in the European Union. Sweden is the biggest investor in Latvia. And 60 percent of Swedish exports go to EU-countries. * * * In our globalised world, decisions in other parts of the world affect us, and often in a way that is hard to foresee. We also live in a world where information, knowledge, money - and also people - move, interact and cross borders in a way never before seen in history. When things are going well, this globalised world gives us more dynamic, developed and exciting societies. At other times we end up with problems our old nation states cannot tackle on their own. In many respects, the financial crisis is an example of this. Caused by irresponsible management, risky deals or sheer greed, and intensified by inadequate regulatory frameworks and insufficient controls, it spread with a force and on a scale that few could have predicted. The storm that was created in the name of speculation dragged the whole world into the worst crisis we have seen since the Great Depression of the 1930s. It set the global economy rocking and brought whole countries to the point of collapse. It hit international banks in New York, but also small companies and shops on our local streets. It affected both Latvia and Sweden. Fifty percent of Sweden's GDP comes from exports. Our economy is strongly linked to the rest of the world. With less demand for Swedish goods and services, and growing unemployment. It meant that we too had to worry about jobs and household finances. And yet today, we can see that Sweden was able to tackle the crisis better than many other countries. In fact, we managed to steer our course through the storm better then we had in the past. And now we are seeing a rapid fall in unemployment and our public finances are practically in surplus. Growth is high and our currency, the Krona, is at its highest value in 18 years. In several international surveys, measuring growth potential, competitiveness and future possibilities, Sweden ranks highly. *** Today I will explain the reasons for this. I would like to try to draw some conclusions from the Swedish crisis management and describe what I see as fundamental points for sustainable growth and economic development. But let me first state that the global financial situation still needs our attention. And that the current situation of small, open economies like those of Sweden and Latvia, can change dramatically in just a few months if we are not careful. Because that is the reality today, in our open economies and in our globalised world. Looking at the Swedish experience, this takes us back to the 1990s. Because one major reason for our strong position today is that we learned our lessons back then. Between 1990 and 1993, Sweden was hit hard by a deep recession. GDP fell for three years in a row. Employment declined by 11 percent and unemployment climbed to 8 percent. Public finances suffered severely, with deficits of around 10 percent for several years, and the debt growing from around 45 percent of GDP to nearly 80 percent. The recession was a symptom of prolonged mismanagement: Mismanagement that had taken good times for granted and undermined incentives for responsibility, growth and sustainable policies. During what could be described as Sweden's mad quarter of a century, incentives to work were undermined by a sharp rise in taxes and major expansions of subsidies and social benefits. Together with such factors as an education system with decreasing focus on knowledge and poorly functioning integration policy, this led to falling employment and rising social exclusion. Sweden was also pursuing a short-sighted and old-fashioned industrial policy. We tried to cope with increased international competition through subsidies, instant devaluations and a loose grip on inflation. And these policies had only one long-term result - they undermined public finances and made our economy extremely vulnerable. And in the beginning of the 1990s we stood face to face with the consequences. It was tough times. An extremely severe situation for Sweden. Nevertheless, this situation forced us to carry out a number of long-term reforms. The budget process was reformed. Clear targets were introduced for inflation and the public finances. The Swedish central bank, the Riksbank, was guaranteed independence, which helped to strengthen monetary policy. The pension system was reformed and a tax reform implemented that amended the worst aspects of the Swedish tax system. Among other things, government electoral periods were extended from three to four years and Sweden became a member of the European Union. In the early 1990s the Government also implemented a privatisation programme and deregulated important markets in Sweden. All of these reforms went a long way towards extricating us from the situation back then. But learning lessons from the 1990s simply was not, and is not, enough. It does not fully explain why Sweden has been able to successfully manage the crisis this time around. And after the crisis in the 1990s, problems were still left unresolved. The initial strength of many of the reforms was weakened, and reform efforts slowed down. That is why we introduced the work-first principle, which I believe is central to create sustainable growth in any country. As I mentioned before: For a long time Sweden had a growing problem of social exclusion. This was not visible in the official unemployment figures. But if you added the people on sick leave, in early retirement or on other social benefits, then you ended up with a situation in which one in five Swedes of working age was outside the labour market. One in five Swedes of working age. Over a million people. Outside the labour market. Living on social benefits. This was the situation when my Government came into office in 2006. Sustainable? Definitely not. Acceptable? Not if you want a cohesive society, nor if you want to spend taxpayers' money on welfare services, rather than social benefit systems. To put it more precisely: we want everyone to be able to find a job that matches their own capacity to work. It must be more worthwhile to work, it must be easier and cheaper to employ people and more companies must start up, stay and grow in Sweden. Accordingly, step by step we have lowered income tax by implementing an in-work tax credit for low and medium earners. So far this has, for example, given an assistant nurse tax cuts worth an extra month's wages every year. Or measured in GDP the income tax reductions carried out or planned amount to 2 percent of GDP in 2011. We have also introduced better conditions for running a business and employing people. We have encouraged employers to hire people with little or no connection to the labour market through special tax deductions. We have cut red tape and encouraged entrepreneurship in the welfare sector. And perhaps most importantly: We have reformed the unemployment insurance and sickness insurance systems. Implementing more stringent requirements, adjusting benefit levels and introducing clearer targets. Moving away from passivity, towards a greater focus on coaching, work placement schemes, practical continued professional development and employment training. Thanks in large part to the work-first principle, we managed to lay a strong foundation. Labour force participation increased and we met the downturn with a historically high level of employment. In addition to this, the number of people on sick leave was halved and the number of people in early retirement decreased for the first time in 35 years. All this meant that, when the crisis struck, we had more hours worked in the economy and lower unemployment, as well as higher tax revenues and less pressure on social welfare programmes. And during the crisis the work-first principle was strengthened. We could afford an expansive policy in order to stimulate the economy and pursue an active labour policy - in fact one of the most active in the OECD. Active measures were introduced to support those who lost their jobs, to maintain job-seeking activities and to help people stay in the workforce. *** I have learned many things from crisis management in recent years. And one of these is how society reacts in times of crisis - from companies to unions, interest groups to the media, and not forgetting the opposition. They say: Freeze. Freeze society. Freeze all the companies, all the work places and save all the jobs the way they are. Spend tax payers money on subsidies that makes it possible for things to stay the way they are. Pay for our costs, pay for our losses and pay for our wages. Do this, and spend what you have, they say. To listen to these voices is a sure-fire way of ruining public finances. And it is a sure-fire way of not dealing with the actual problems.

We did not listen. We supported people through active measures, rather than supporting industries through subsidies or banks and financial institutions through funding without setting clear conditions. We did not accept protectionism or spend taxpayers' money to save companies that were not competitive. We said: when the ship is sinking, our main priority should be to save the sailors - not the ship. The reforms of social benefit systems - both the unemployment insurance and sickness insurance systems - together with our active labour market measures helped keep labour force participation up during the crisis. Previously, we had seen people lose their jobs in times of crisis and become passive, never to return to the labour market - this was not the case this time. Instead, this year employment is up more than 100 000 compared to 2006. And as the economy recovers, forceful measures are now being taken to ensure that unemployment does not remain at a high level. Targeted measures are being implemented for the long-term unemployed, young people and others with a weak foothold in the labour market. We simply will not accept a rise in unemployment in difficult times, which then becomes persistent when the economy picks up. The work-first principle remains firmly in place. And today unemployment in Sweden is falling at the second fastest rate in the EU. *** Long-term reforms to battle social exclusion, the work-first principle and active measures on the labour market. They are all crucial. Crucial to tackle a crisis and crucial to building social and financial sustainability. However, they will quickly diminish in importance if public finances are not in order. And this brings me to perhaps the most crucial message. Sound public finances are, and will remain, a fundamental must for long-term, sustainable economic policy. We have clearly stated that we will honour this principle in good times and bad. And there are many reasons why. For small and open economies like those of Sweden and Latvia, calling into question the sustainability of public finances is associated with serious risks and substantial costs. A fiscal policy that is not sustainable in the long term leads to debts that threaten growth, welfare and employment. A fiscal policy that is not sustainable in the long term affects the whole of society - but the hardest hit are those who are most in need of security and welfare in order for their daily lives to function. This is always the case. And it is, as I said before, even more essential if you are a small and open economy. Sweden or Latvia are not to be compared with the US. We cannot rely on our size to help us cope with financial instability, deficits or public debts. If we ignore this fact we will quickly be punished by the financial markets, and punished hard. We therefore need to act impeccably and keep our public finances stable and in order. And if successful, we will not only be able to cope with crises and afford reforms - we will also be an attractive country to invest in and to do business with. This was why we clearly stated, right back in 2006 when my Government came into office, that we would make sound public finances and sustainable economic policy one of our main priorities. Consequently, we maintained a surplus in the public finances during the good times and we set about paying off the public debt. By doing so, we prepared Sweden for a rainy day. And we began preparing Sweden for long-term challenges such as an ageing population and were able to make investments for the future. When hit by the financial crisis, this policy of responsibility put us in a much stronger position; perhaps a stronger position than ever before. And all through the crisis we stuck to this policy, saying: "If the crisis was created by people borrowing too much, the solution cannot be for governments to act in the same way." In fact, Sweden's public debt will be lower at the end of this year than it was back in 2006. Down from 45 percent of GDP to around 39 percent. I still consider this one of our most crucial decisions for managing the crisis. If we had abandoned this responsible approach, we would have ended up in a totally different situation. ***

I would like to add one final point. The need to stick to a long-term reform programme. The need for constant and continuous reform. I say this because there are no shortcuts or quick fixes to coping with the world of today. Rather, there is an ongoing need to reform, adapt and develop in order to become more competitive and thereby lay the foundation for new jobs and new enterprises so as to finance our future welfare. Despite the crisis, we stuck to our long-term reform programme. The major elements of our crisis management were not a matter of new policies, they were a question of strengthening what we considered to be good policies for Sweden in the short as well as the long term. I believe that, given the right tools, every individual has it in them to make a difference. And that politics should be used to create the conditions needed to make this possible. This is one of the core values of our policy for a sustainable growth. Seen from this point of view, encouraging work, entrepreneurship and new jobs gives people the chance to build a better life for themselves through their own efforts. And in the process, they contribute not only to their own well-being, but to the growth and development of society as a whole. Ensuring sound public finances and reducing public debt, meanwhile, enables you to stand on safe ground. No matter whether you are facing crisis or not, it allows you to make the investments in the education, knowledge and research on which our future is built. It allows you to make investments in infrastructure and functioning welfare services. While tackling the financial crisis we have combined measures that are necessary in the short term with the continuous reforms needed for the future. This is particularly true of education, research and development. For example, we are now making substantial investments in research and development; the largest in Sweden's modern history, in fact. If you take public and private investments together, we are now investing 4 percent of GDP in research and development annually. Measured as a proportion of GDP, this means that investments in this area are the second largest in the OECD. We are also implementing several important reforms in the education system. Good education is the key to a country's future. And this is also the reason why Sweden and Staffan Burenstam Linder - the man behind the idea - decided to support the establishment of this very school, the Stockholm School of Economics in Riga, in the early nineties. He believed, and rightly so, that if Sweden really wanted to help the transformation in the Baltic region, we had to support high quality education. Because education opens doors to equality and development, giving every individual a fair chance to participate and contribute in society. *** Let me conclude. When establishing temporary and permanent crisis mechanisms within the EU, we should remember that these mechanisms do not solve any problems. It is the underlying policies that matters. Build a work-first principle. Active labour market policies. Safeguard sound public finances. These were the main pillars of Sweden's success in managing the current financial crisis and I believe they are valid for all countries wanting to achieve sustainable growth. All of this is essential, if you want to give your children a full and good life as adults, but also if you want to ensure growth and progress. And this is what building sustainable growth is all about. Pointing to a better tomorrow beyond the clouds of the current crisis. Creating long-term opportunities for individuals to grow, work and participate in society. And by so doing, creating the conditions for an open, dynamic and competitive society.