Speech Almedalen 06 July 2008
Cecilia Malmström, Minister for EU Affairs

Europe of the small businesses

Ladies and Gentlemen!

When I was a child, I lived with my parents in France for a few years. Among my friends in school, many had grandfathers who had been killed in the Second World War.

My parents sometimes took my sister and I along to the huge war cemeteries they have in France, with their endless rows of white crosses. The grandfathers of my school friends were also buried there. It is impossible not to be moved by such a sight and it is not hard to come to the conclusion that the countries of Europe must solve their conflicts with negotiations, instead of from the trenches.

Countries that trade together do not fight together. That is how easily you can summarise the concept of the EU project. Today it is obvious what EU has meant for peace, democracy, and wealth in Europe after the Second World War. Those ties that free enterprise, free trade and free movement create between countries and people, i.e. those ties that many of you still work on each day, are the best insurance policy we could have against any war or conflict. I feel that this is worth reminding us of.

The inner market and the four freedoms are at the very core of European cooperation, and the free trade within the Union has contributed to growth, wealth, and security. An efficient inner market, which considers the needs of the businesses in the best way, is of the outmost importance both inside and outside of the EU and to ensure that European companies will do well in the international market.

When we hear cries for increased protectionism, or see attempts at hidden protectionism, we as friends of free trade must respond. Even though Sarkozy, the president of France, uses the word protectionism, it is not a nice word - as a liberal, it will always remain a dirty word to me. Free trade, however, is a fine expression. Sweden works hard with a group of likeminded countries to stand up for free trade within the EU and to oppose any type of protectionism, which is sometimes expressed in very imaginative ways.

We cannot settle down and think that the inner market is now complete. We have to be aware of the tools of today, so that they can be used for tomorrow's purpose. Many of the laws are in place but we see an ever-increasing need for the applications to work, in order for free movement to have an impact and for any obstacles to disappear.

The need for small and medium businesses is especially obvious, as obstacles and costs in connection with trade across the borders often hit them harder. It can be crucial to them that formalities and contacts to authorities work as easy and equal as possible throughout the entire region. A large strength of the EU membership stems exactly from those mutual solutions and mutual laws. But the daily application of these rules by the authorities is also a large part of the solution. So improved cooperation across the border and a strong trust between the authorities of different countries is necessary.

At the start of this year, the commission presented an overview of the inner market in order to modernise and develop it, and to enable the citizens, businesses, and consumers to fully take advantage of the market potential. The hope is that through this review we can start a debate and awareness of the fact that this is our foremost instrument in meeting the challenges of globalisation.

The review of the inner market will be followed up during the Swedish presidency in autumn 2009. This presidency will give us a chance for more goal oriented and long-term work with the inner market, as well as to further the efficiency of the inner market.

During the year, the commission intends to present a Small Business Act for Europe. The aim is to introduce the concept of "Think small-scale first" to the EU work. The Small Business Act is a package, with measures to be presented during the summer of 2008, and these will make it easier for the small and medium businesses to trade across borders and within the inner market. The aim is that a new set of rules for so-called private European public limited companies will create mutual rules for all of EU, and this mutualisation is one of the prioritised items on the Commission's program for 2008.

But even Sweden must become better at respecting and carrying out what we agreed on within the EU. The Swedish Inner Market Review must see beyond the rules and make suggestions for any simplifications, improvements, and finalisations of the rules set, which are necessary for the free movement of goods and services to really work.

EU's mutual work for growth and employment is normally referred to as the Lisbon Strategy. When it was created by the heads of state and governments in 2000, they put down 2010 as a target year, but of course it is necessary that this work continues even beyond 2010, and during the Swedish presidency discussions will take place regarding a renewed and strengthened strategy in order to meet future challenges. Sweden wants to see follow-ups which are even more cutting edge than the present strategy and with a clear focus on enterprise and free trade.

In order for businesses to work, a steady flow of workers with the right qualifications is needed. Free movement for persons within the Union is important but so is the possibility of obtaining qualified workers from other parts of the world. A so-called Blue Card has been suggested, in order to attract highly qualified workers from countries beyond EU. This card allows the cardholder and his or her family to live, work and travel freely within the Union. Sweden is working towards the inclusion of a highly skilled workforce and also that the demands of the employment market are met.

Free service trade between the EU member states was written as a goal as far back as in the Treaty of Rome in 1957. Since then the majority of obstacles for movement of goods have disappeared, but the development for the service area is still relatively slow.

Today the service sector is the quickest growing part of our economy. Within EU the service sector makes up around 70% of the total GNP, but only makes up around 20% of the export. So there is a large potential for increased service trade, which is also of high importance to Sweden.

The aim of the service directive is to accommodate both long-term implementation and more random service practices at the inner market. The goal is also to remove various trade obstacles and to simplify the administration for business owners. This creates better conditions for Swedish service businesses to compete in the European market. The service directive must be fully implemented before the year-end 2009/2010, and we will of course actively ensure that this takes place during our presidency.

Finally I know that many of you consider the Euro as an important tool for the inner market. You must also be aware that Sweden is not included in this. We are losing out on investments, exchange fees and we cannot take part in decisions that affect us. My party (The Liberal party of Sweden) and I are convinced that Sweden also belongs in the Euro zone, especially now that we see more and more countries adapt this shared currency. I hope that we somehow can raise this question during our next mandate period. Your support for this process would be most welcome.

Ladies and Gentlemen!

Free enterprise and free trade are the foundations for democratic and peaceful progress. We must be aware of threats of limitations to free enterprise and free trade, wherever they may show themselves. The inner market is not finished, but must be developed each day. Small businesses are not the exception but the rule. Therefore the work of simplifying and developing the inner market must take its cue from the reality of the small business. I have mentioned some processes within this area but I'm sure that many amongst you have great ideas, which I can take with me today.

Thank you for listening!