NORDIC EUROPE AND BREXIT

The governments of the EU’s three Nordic members – Denmark, Finland and Sweden as well as Norway and Iceland, both members of the European Economic Area (EEA) face the prospect of losing a powerful ally in future. They all have close political and economic links to the UK, based on common interests. They all count the United Kingdom among their five most important trading partners, and, with the exception of Finland, they – like the UK – are outside the euro area. They are also worried about the potential negative repercussions for their own economies post-Brexit and the prospect of facing an even more dominant euro area. And for non-members Norway and Iceland, Brexit will make it much harder to influence the EU in line with their interests.

Denmark, Finland and Sweden respectively have set up an interministerial taskforce to analyse the direct impacts of Brexit on their countries. With the economic implications at the forefront of their minds, the Nordic members of the EU have firmly positioned themselves against an overhasty break-up with London. Calls for the British to be punished by decoupling the UK from the EU to the greatest possible extent are firmly rejected. Instead, the Nordic countries are unanimously demanding the closest possible post-Brexit links between the UK and the EU. In Denmark and Sweden in particular, there are increasingly vocal calls for their own governments to play an active role in the talks with London with that aim in mind. The Nordic members of the EU are therefore likely to adopt a highly pragmatic position in the exit negotiations. Limiting the damage to their trade relations with the UK will certainly be one of their priorities. Indeed, in the view of some politicians, they might even be potential candidates for an informal mediating role, primarily because Denmark and Sweden in particular occupy a midway position between the UK and the rest of the member states in their policy towards the EU.

Brexit poses major challenges for the Nordic region – but it also creates opportunities. The greatest challenge for the Nordic countries is to prevent any decoupling from the euro area countries (“core Europe”). At the same time, some politicians are hoping that Brexit will increase the Nordic influence in the EU. For that to happen, however, the Nordic countries would have to intensify and expand their cooperation within and outside the EU. So far, they have always been keen to avoid forming a distinct regional bloc in EU decision-making, largely because – despite the many overlaps – there are significant differences in their positions on a range of issues. Nevertheless, the governments of the Nordic countries believe it is important and feasible to further deepen Nordic cooperation at the EU level. Indeed, efforts are now under way to improve and expand this cooperation, particularly in relation to the implementation of EU legislation, much of which is binding on EFTA/EEA countries Iceland and Norway as well. Through coordinated implementation of EU directives, the aim is to avoid legal differences that would make it more difficult for their citizens to live and work in the other Nordic countries, for example. Furthermore, Nordic cooperation could, indirectly, lead by example, showing how pragmatic collaboration can work for all the EU countries. The refugee crisis, for example, triggered unaccustomed tensions between some of the Nordic countries at first, but a new dynamic in favour of integrating the refugees has now emerged in their cooperation. A further beacon of cooperation of great practical benefit – in view of the ongoing digitalisation of Nordic societies – is the creation of a common digital market. In order to exert wider appeal beyond their own region, the Nordic countries should therefore continue to develop their particular model of integration in traditional and new areas alike.

Foreign Trade (Exports -Imports) of Nordic Europe with the UK

Total Exports of Nordic Europe to the UK: 39.5 billion U.S.$

Total Imports of Nordic Europe from the UK: 18.6 billion U.S.$

Countries of Nordic Europe register a positive trade balance with the UK

1. Denmark: + 1.3 billion U.S.$
2. Sweden: + 2.2 billion U.S.$
3. Finland: + 1.0 billion U.S.$
4. Norway: + 16.2 billion U.S. $
5. Iceland: + 0.2 billion U.S. $