Finland’s Next Prime Minister Backs NATO Membership

Russia is almost certain to be alarmed by the likely appointment of Alexander Stubb to become Finland’s next prime minister. The conservative politician, who currently serves as the Nordic country’s European affairs minister, favors breaking with Finland’s neutrality to join the NATO alliance.

“We have to aim at maximising Finland’s national security and being part of decisionmaking and that happens best as a NATO member,” Stubb told the Reuters news agency after Finland’s ruling National Coalition party elected him as its leader on Saturday.

Stubb is expected to take over as prime minister when Jyrki Katainen steps down, possibly as early as next Thursday, to seek a European Union job. Finland is due to hold a general election in April of next year. Read more “Finland’s Next Prime Minister Backs NATO Membership”

Danish Nationalists Reject Alliance with Dutch, French

Denmark’s nationalists dealt a blow to the hopes of similar parties in France and the Netherlands to form an alliance in the European Parliament on Wednesday when one of its lawmakers ruled out any cooperation with Marine Le Pen’s Front national.

Søren Espersen, the Danish People’s Party deputy leader and foreign policy spokesman, told Politiken newspaper that Le Pen’s was not a “decent” party, referring to its history of antisemitism. Marine’s father, Jean-Marie, who founded and long led the Front, made several antisemitic remarks throughout his political career. Read more “Danish Nationalists Reject Alliance with Dutch, French”

Norway’s Election Winners Propose Relaxing Wealth Fund’s Spending

In an election that was a foregone conclusion even before the first ballot was cast, Norway’s right-wing coalition led by the Conservative Party’s Erna Solberg swept to power on Monday. Perhaps the most controversial story from the election was the rise of the Progressive Party, the Conservatives’ key political ally. It is noted both for its anti-immigration positions and for its association with mass murderer Anders Breivik, a former party member.

While this aspect of the election has caught international attention, the bigger issue for voters in Norway was oil. Specifically, what to do with $760 billion worth of oil generated wealth in a sovereign wealth fund awkwardly and inaccurately named the Government Pension Fund-Global. Read more “Norway’s Election Winners Propose Relaxing Wealth Fund’s Spending”

Swedes Reject Centralization, Sympathetic to Cameron

Sweden’s prime minister John Fredrik Reinfeldt rejects the notion of closer economic and fiscal integration in Europe, a goal set out by German chancellor Angela Merkel in Davos, Switzerland earlier last week.

“The idea that we give new powers to Brussels and the European Commission then tells us what we can and cannot do, we categorically reject,” the Swedish leader, who belongs to the same conservative political family as Merkel, said in an interview with the German Handelsblatt that was published on Sunday. Read more “Swedes Reject Centralization, Sympathetic to Cameron”

Finland, Netherlands Block Bailout Fund Expansion

Finland and the Netherlands, the eurozone’s two most hardline creditor states, said on Monday that they would block expansion of the permanent European Stability Mechanism’s ability to buy sovereign bonds.

A European Council last week agreed that the ESM, which is set to replace the temporary European Financial Stability Facility next week, could be used in a “flexible and efficient manner” to lower the borrowing costs for eurozone governments. Highly indebted Italy and Spain had insisted that other European nations help them reduce interest rates on their debts to avert a deepening of Europe’s financial crisis.

Although the council statement gave no specifics, it was assumed that the bailouts fund would be empowered to buy government bonds which could reduce the interest rates that Italy and Spain pay on their loans. Read more “Finland, Netherlands Block Bailout Fund Expansion”

Norway, Russia Strengthen Arctic Relations

At a ministerial summit in Oslo last month, Norway and Russia agreed to improve military relations and expand cooperation in their Arctic territories.

Both northern states are reorganizing their armed forces in recognition of the changing strategic landscape. Norway aims to convert one of its High North battalions into a dedicated Arctic brigade comprising naval and special forces units. Russia last year announced plans to create an armored Arctic brigade of its own on the Kola Peninsula.

As a result of climate change, the Arctic region is set to assume newfound importance for the world economy. The melting ice could shorten global supply chains and free up vast oil and natural gas reserves to exploration. Read more “Norway, Russia Strengthen Arctic Relations”

America Needs an Arctic Strategy

Global shipping may be on the verge of a breakthrough — literally. Within mere years, polar routes could be sufficiently ice free to revolutionize world trade. The distance between Europe and Japan could be shortened by up to 40 percent for example which would provide tremendous savings in time and resources.

As the Arctic assumes newfound significance for the world economy, national governments are stepping in. The melting ice isn’t just an opportunity for shipping; there are huge oil and gas supplies waiting to be exploited up north. Countries like Canada, Norway and Russia are already in conflict over maritime borders in the region.

Under United Nations sea law, the eight Arctic states have jurisdiction over waters extending twelve nautical miles from their shore with their exclusive economic zones stretching up to two hundred miles into the Arctic Ocean. Most of these countries already have extended oil and natural gas industries. Read more “America Needs an Arctic Strategy”

Finland, Netherlands Resist Expansion Bailout Fund

Finland’s prime minister supported a Dutch proposal to create a European commissioner for fiscal discipline on Monday and warned that Europe may have mere “weeks” left to convince markets that it can combat its spiraling debt crisis.

Prime Ministers Jyrki Katainen and Mark Rutte rejected international calls for an expansion of Europe’s bailout facility however, stressing that profligate euro nations in the periphery should enforce budget discipline according to existing treaty obligations. Read more “Finland, Netherlands Resist Expansion Bailout Fund”

Socialists May Return to Power in Denmark

Denmark’s ruling coalition of conservatives and liberals is likely to be unseated in elections this week as the opposition Social Democrats hope to secure a parliamentary majority of center-left parties. After a decade of right-wing government, the Scandinavian country is expecting a change although major reforms could be complicated by coalition politics.

According to recent opinion polls, Prime Minister Lars Løkke Rasmussen’s liberal Venstre, a pro-business party that champions smaller government, would lose maybe no more than a single point in support down from 26 percent of the vote in 2007. His conservative coalition partners could be decimated however.

Denmark’s conservatives and liberals were able to govern with the parliamentary consent of the far-right Danish People’s Party, an anti-immigration platform that has consistently polled at around 11 to 14 percent of the vote. Unlike the other two major parties on the right, the populists are wary of entitlement reform and liberalization and draw considerable support from pensioners.

Although unemployment is below the European average at 4 percent, Denmark’s economy contracted by almost 5 percent in the wake of the financial crisis, forcing the governing parties to consider welfare reforms as they simultaneously cut taxes.

The government’s borrowing conforms to European treaty norms with 2.7 percent deficit spending but to achieve balance in the long term, Copenhagen has to reduce expenditures.

Raising more revenue was not an option for Venstre. Instead, it enacted a reduction in the top income tax rate from 59 to 51.5 percent in January of last year. Overall tax revenue amounts to 49 percent of gross domestic product nevertheless — an extremely high figure even among Northern European countries.

Negative growth and its implications for fiscal policy exposed the rift that had always existed between two governing parties and their allies in the People’s Party. They may be far to the right on immigration and security issues; their national conservatism borders on a protectionist economic stance which conservatives nor liberals can embrace. The People’s Party’s staunch support for existing welfare programs moreover made it nigh impossible for the ruling parties to implement meaningful reforms.

The Social Democrats of Helle Thorning-Schmidt, who represented her party in the European Parliament before assuming its leadership in 2005, have progressively increased their support in opinion polls since the start of this year, climbing from 25.5 percent of the vote in January — which equaled their performance in 2007’s election — to 28 percent this summer. In coalition with smaller socialist and Green parties on the left, the party that has spearheaded the opposition for precisely a decade could well return to government and deliver Denmark’s first female prime minister this year.

An obstacle could be the social liberals in the Radikale Venstre who are considered left of center on social and immigration policy but otherwise in favor of the market driven economic policies of the main Venstre party. If they will not enter a coalition that is dominated by socialists, they may be persuaded to support the new government without joining it — fulfilling the very role that the People’s Party they so despise has for ten years.

Gunman Targets Norway’s Social Democrat Party

An explosion in the Norwegian capital on Friday left eight dead and many injured. A bomb went off near the prime minister’s office in the late afternoon. Soon after, the perpetrator killed dozens of youngsters gathered for a Labor Party summer camp on a small island west of Oslo where former prime minister Gro Harlem Brundtland had just spoken. The killer identified her as his primary target on Monday.

Prime Minister Jens Stoltenberg was scheduled to speak at the island on Saturday. He was not in office during the blast and remained unharmed as did Brundtland but at least 68, many of them teenagers, perished in a killing spree.

Police detained the gunman who was described as tall, blond and a right-wing extremist. The 32 year-old criticized “cultural Marxists” in a lengthy essay that he had posted online and championed a “crusade” against Islam in the Scandinavian country. He blamed the Labor Party for letting Muslims “colonize” Norway and accused it of “treason.”

Police believe the gunman drove to the island after the explosion in the capital.

This post was updated with corrections and new information.