Rutger Lindahl

EMU - A Swedish Perspective

Provides a comprehensive survey of the EMU project. Evaluates the main advantages and disadvantages of a single currency, integrating the economic and political aspects. This volume is a revised version of the report by the Swedish Government Commission on the EMU.

East-North-South: Coalition-Building in the Council before and after Enlargement

Research on coalition patterns in the Council of the EU has taken a leap forward over the last couple of years. A decade ago, Winkler complained that ‘there is surprisingly little clear evidence of coalition formation in the EU’ (Winkler 1998, p. 399). A few years later another group of scholars noted that ‘most of the suggestions [concerning coalitions] made in the literature seem to be based on anecdotal evidence, rather than on structured documentation’ (Elgstrom et al. 2001, p. 121). The closed nature of the Council and the lack of reliable systematic data contributed to this situation. Furthermore, a common view on the topic was that there would be few stable patterns to be found anyway, as coalitions were assumed to ‘shift from issue to issue’ (Spence 1995, p. 380). Such a view also fitted well with the ideal picture of the Council as a rational European problem-solving institution.

Sweden: The twin faces of a euro-outsider

Although recognising that the country experiences a notable division between elite and public perspectives on the benefits of further European integration as evident in the 2003 referendum on the euro, this article argues that a consensus has emerged. Sweden is content as a ‘(euro) outsider on the inside’ of the Union and has developed effective networks so that any detrimental effects accruing from euro-outsider status are relatively minimal. Using a brief evaluation of the 2003 euro referendum, the authors apply Miles’ ‘politics of asymmetry’ model in explaining Swedish perspectives towards the single currency and the EU.

Out in the cold? Flexible integration and the political status of Euro opt-outs

A common argument against flexible integration as a solution to increased preference heterogeneity is that a likely consequence for those member states opting out of the enhanced cooperation is a loss of status and influence generally in the European Union (EU). It has been argued, for example, that the decisions by Denmark, Sweden and the UK not to join the Euro is considered to be free-riding, which leads to a bad reputation and exclusion from informal networks. We test this proposed free-rider effect by comparing the network capital of Euro-outsiders with insiders in the Council of the EU, using survey data of more than 600 member state representatives. The findings speak strongly against the free-rider hypothesis, as the Euro-outsiders are highly ranked in terms of network capital.

ANALYSES OF INTERNATIONAL PROPAGANDA BROADCASTS

International radio broadcasts are relatively common elements in the international flow of communication. They can be used for a number of different purposes. An important one is the distribution of propaganda. This article contains a presentation of the analyses of international propaganda broadcasts—analyses that for a number of years have been carried out at the Department of Political Science, University of Gothenburg. The studies have primarily been aimed at finding propaganda patterns for different broadcasters and at finding ways to measure variations in propaganda intensity.

Fiscal Policy and the EMU

By fiscal policy we mean decisions on taxation and public expenditure. Two aspects are central in connection with the monetary union. The first concerns how large government budget deficits and debts can be accepted. The second aspect relates to the role of fiscal policy in stabilising aggregate demand. The Maastricht Treaty contains fiscal policy rules for the size of government budget deficits and debts in each country. These rules were amended in the Stability and Growth Pact. There is also an ongoing discussion on what demands for flexibility of fiscal policy that arise because of the loss of monetary policy autonomy in a currency union.

The Labour Market and the Monetary Union

Unemployment rose sharply in the EU countries between 1975 and 1985. Since then, it has remained high. Figure 8.1 illustrates this. In Sweden, open unemployment was very low until the start of the 1990s, but it then rose between 1991 and 1994 from about 2 to about 8 per cent. But the rise in open unemployment understates the deterioration in the labour-market situation in Sweden, as participation in labour-market programmes (labour-market training and job-creation schemes) also increased dramatically. In 1994, participation in various labour-market programmes amounted to 5.2 per cent of the labour force. Total unemployment (the sum of open unemployment and participation in labour-market programmes) thus amounted to as much as 13.2 per cent of the labour force in 1994. Figure 8.2 shows this. After a slight reduction in 1994–95, total unemployment rose again in 1996. The figure then amounted to 12.6 per cent of the labour force (8.1 per cent in open unemployment and 4.5 per cent in labour-market programmes).

Macroeconomic Disturbances and Monetary Policy

Two possible consequences of a European monetary union are often contrasted with each other. On one hand, membership of the union can mean higher credibility for low inflation. On the other, the loss of monetary policy independence means less freedom of action in stabilisation policy and thus a risk of larger fluctuations in output and employment.

Currencies and Exchange-Rate Systems — A Background

This chapter provides a theoretical and historical perspective on the choice of exchange-rate system. Section 3.1 discusses the various functions of a national currency. Section 3.2 describes the differences between various exchange-rate systems. A monetary union may be seen as an exchange-rate system with irrevocably fixed exchange rates among the member countries. Its opposite is a system of floating exchange rates, such as the one that currently applies between the dollar, the yen, and the German mark. Several other systems exist between these two extremes. Section 3.3 describes historical experiences of various exchange-rate systems. Even if the European monetary union is unique in a historical perspective, lessons from other international monetary arrangements can be useful in an analysis of the consequences of introducing a single currency. Section 3.4 summarises the most important conclusions.

The EMU Project

This chapter outlines the EMU project. Section 2.1 gives a brief description of how the plans for a monetary union within the EU have gradually evolved. Section 2.2 presents the basic structure of the monetary union, as laid down in the Maastricht Treaty. Section 2.3 explains the organisation of the European Central Bank and its tasks. Section 2.4 provides a survey of certain key EU institutions, which are of importance for understanding the EMU process. Finally, section 2.5 presents the “reference scenario” for how the transition to the single currency should take place in practice, as agreed in Madrid in December 1995.