Nordic leaders seek EU agreement over post-Brexit power play

Bloomberg

The Nordic members of the European Union have vowed to work closer together to make up for the potential loss of a key ally, the U.K.
Meeting Wednesday in the Finnish island of Aaland, the leaders of Sweden, Denmark and Finland agreed to explore ways of cooperating on some of the crucial battles they will face in Brussels.
“We have decided that we have to deepen cooperation within the Nordic countries on the internal market, trade and quite a few issues where we have been like-minded with the U.K.,” said the summit’s host, Finnish Prime Minister Juha Sipila.
At the same time, the EU should focus on practical issues such as migration and the economy rather than pursue grandiose plans for a federal state, the leaders said at their annual get together.
With Britain expected to follow up on the outcome of the June 23 referendum, in which a majority voted to leave the EU, the bloc’s three Nordic members are set to lose a close partner on issues ranging from energy to financial regulation. To euro outsiders Sweden and Denmark that’s particularly troublesome. Both countries, like Britain, have some of Europe’s largest financial sectors relative to national output and face the European Central Bank in matters of regulation.
Although Britain isn’t expected to formally leave the EU for years, top officials are already beginning to worry. One particular source of concern involves payments into the EU budget.
“Without the U.K. there will have to be a completely new discussion on the next long-term EU budget,” Swedish Prime Minister Stefan Loefven said. “Our position is clear. If you have less income you should also have lower expenditure.”

Forging Alliances
Although the Nordic leaders stopped short of forging a formal alliance within the EU, they’ve already started cooperating more closely.
Last month, the three met in Berlin with their colleagues from Germany and the Netherlands to discuss how to counterbalance the growing power of less fiscally prudent EU members like France and Italy.
“The political debate isn’t just about counting votes,” Danish Prime Minister Lars Loekke Rasmussen said in an interview when asked about future changes to the balance of power in Brussels. “It’s also about setting the tone and agenda and some countries have been hiding behind the U.K. while it did the fighting.”
“When that strong voice is no longer there, others have to step up,” Rasmussen added, listing the Nordics, Germany and the Netherlands as natural partners for Denmark.
In the meantime, Nordic nations including non-EU member Norway are keen to keep Britain, a top export destination, as close as possible to the EU’s internal market.
The idea that Britain might be able to remain a member of the common market without the freedom movement of labor that goes with it appeals to populist parties in the Nordics, which would be keen to copy such an arrangement.