Monthly Policy Review A Mundus International report October 2014 The October issue, 2014 Monthly Policy Review The Monthly Policy Review offers analysis on current policy issues - such as national politics; economic, security- and environmental issues, social developments and geo-political issues affecting Sweden. The Monthly Policy Review has been specifically developed as a tool for political reporting of foreign missions and contains exclusive research and analyses. In the October issue The Mundus International Calendar ...................................................................... 2 Greens set to shake up Swedish energy policy ..................................................... 3 Green Policies ............................................................................................................... 3 A heavy impact on Swedish industry? .......................................................................... 4 EU ramifications? .......................................................................................................... 4 Comment ...................................................................................................................... 5 The influential shadow .............................................................................................. 5 Research project finds a group of well-educated and inspired individuals ................... 5 The revolving door ........................................................................................................ 6 Löfven’s shadows ......................................................................................................... 7 Comment ...................................................................................................................... 8 The Bildt legacy ........................................................................................................... 8 Budgetary Blues ........................................................................................................ 10 Passing the Budget Bill ............................................................................................... 11 The budget procedure ................................................................................................. 12 Comment .................................................................................................................... 12 Everybody’s talking about…the future of the Alliance .................................... 13 “Whether or not our world has become a better one during these years is unfortunately another matter. But we at least did what we could.“ Carl Bildt 1 The October issue, 2014 The Mundus International Calendar October 29th Sep - 7th Oct Hearings of commissioner nominees, Brussels 1st Oct Jens Stoltenberg assumes his functions as NATO Secretary General 10th - 12th 2014 Annual meetings of the IMF and the World Bank Group, Washington D.C. 16th - 17th EU - ASEM summit, Milan 20th Foreign Affairs Council (FAC), Luxembourg 21st General Affairs Council (GAC), Luxembourg 27th - 30th Nordic Council session, Stockholm 23rd - 24th European Council, Brussels 28th The Riksbank publishes its October Monetary Policy Report November 1st (TBC) New college of commissioners takes office, Brussels 4th Congressional Elections, United States of America 9th - 11th World Economic Forum: Summit on the Global Agenda, Dubai 17th Last day to submit budget bill to the Riksdag 15th - 16th G20 meeting, Brisbane 17th - 18th Foreign Affairs Council (FAC), Brussels 21st - 24th NATO Parliamentary Assembly annual session, The Hague 24th - 27th World Islamic Economic Forum, Dubai 29th - 30th Green Party conference, Karlstad December 1st - 12th Dec COP 20, Lima 3rd - 5th Global Conference on Agriculture, Food Security, and Climate Change, Johannesburg 4th The Riksbank publishes The Financial Stability Report 2014:2 10th Nobel Peace Prize to be awarded, Oslo 18th Dec European Council, Brussels 18th NIER publishes its report on the Swedish economy Further ahead 1st Jan 2015 Latvia takes over presidency of the Council of the EU 21st - 24th Jan World Economic Forum, Davos 7th Mar The Moderate Party to elect new party leader • Text in blue is an international event 2 The October issue, 2014 Greens set to shake up Swedish energy policy Today the Green Party, once described by the Economist as ‘nutty but well meaning’, forms a coalition government with the Social Democrats. After its successful EU election in May, the party is set to influence energy policies and both national- and EU levels. By global standards Sweden has long been seen as a leader in climate-friendly growth, and governments of both persuasions have pursued pro-climate policies. Indeed, in his farewell speech Carl Bildt celebrated Sweden’s achievements in low-carbon growth, citing that GDP has risen by 60 per cent since 1990 while greenhouse gas emissions have fallen by 25 per cent, a period of time that spanned both Social Democrat and Alliance governments. But the introduction of the Green Party to Swedish government looks set to turn Swedish energy policy a much deeper shade of green. Sweden has been able to achieve this growth by utilising its plentiful renewables resources. Currently half of Sweden’s electricity production comes from hydro-power. Sweden’s forests have an abundance of biomass that can also be used for electricity and heating, and there are many good locations for wind-energy too. However, the country has also placed a heavy reliance on nuclear energy. About 40 per cent of Swedish electricity generation is made by 10 nuclear reactors that were built in the 1970s and 1980s. The oldest reactors are scheduled to be closed down in the 2020s, and despite a 1980 referendum which voted to phase out nuclear, the policy of the outgoing Alliance government was to allow Vattenfall, a state-owner utility to build new reactors to replace the ones being retired. Green Policies The emergence of the Swedish Green party , founded in 1981, was sparked by the anti-nuclear power movement following the 1980 nuclear power referendum. The Greens’ party platform describe their ideology as being based on "a solidarity that can be expressed in three ways: solidarity with animals, nature, and the ecological system", "solidarity with coming generations", and "solidarity with all of the world's people". The party is by its nature, anti-nuclear, and fighting climate change is high on its agenda. In contrast, the Social Democrats have been more equivocal on environment and energy policies, balancing their preference for a nuclear free, low-carbon Sweden with the need to create growth and jobs. Löfven has been quoted as saying that nuclear power would be needed for the foreseeable future. Given this, it should not have been a surprise that energy policy would be a core issue for the Greens to negotiate as they discuss forming the coalition government with their larger partner. An agreement has apparently been reached already, with the two parties announcing this week that they intend to set up an energy commission. After the announcement Löfven said that ‘The government's starting point is that nuclear power must be dismantled, we must have 100 per cent renewable energy’, while in their statement the Greens said that ‘An energy commission will be convened for cross-party discussions on energy policies with the aim of framing a long-term, sustainable energy agreement’. But, while there may seem to be an in- principle agreement about the direction of policy, there is less clarity about the pace and the depth of reforms. The Green Party’s election manifesto calls for two nuclear reactors to be closed down during this electoral period. The Greens’ spokesperson Åsa Romson said that this would easily be met, as increased safety and security requirements ended the functional life of older reactors. However, Mr Löfven seems to leave room for other interpretations on nuclear, saying ‘To have a long-term discussion that is going to lead somewhere, you shouldn't start by saying we should go this way or that way. Instead, you should keep the situation as it is now’1. 1 http://www.businessinsider.com/r-swedens-incoming-coalition-to-set-up-energy-commission-2014-10 3 The October issue, 2014 A heavy impact on Swedish industry? Whilst public support for the announcement may be positive, Swedish industry is far from enthused. And unlike some of its neighbours the Swedish economy still retains a significant proportion of heavy industry and manufacturing. Vattenfall, the company most immediately affected, claimed that closing nuclear plants would force Sweden to import ‘fossil energy’. An industry lobby group representing energy-intensive industries declared it ‘very worrying… Sweden's basic industry is put at risk if the door to new nuclear power is closed.’2 The Greens and the Social Democrats may find it easier to get aligned on renewables. Also included in Wednesday’s announcement was a commitment to increase the amount of renewable energy production by 2020 from 25TWh to 30TWh3. Sweden currently runs a marketplace for renewable ‘electricity-certificates’, and the parties have said that they will extend the schemes life from 2020 to 2030. EU ramifications? Under the Alliance Sweden has had one of the more ‘pro-climate’ policies within Europe. Sweden was one of the founders of the ‘Green Growth Group’ of EU countries, that has since grown to 14 countries, and the former Minister for the Environment, Lena Ek initiated the New Climate Economy project that was