Getting a reaction

Much to the shock of many Swedes, the country has just overturned a ban on new atomic plants. As Terry Macalister reports, the government has decided to give the green light to a new generation of nuclear reactors to replace its ten existing plants.

Sweden was at the forefront of anti-nuclear sentiment in the 1970s and 1980s, when the subject was one of the top political issues of the day. It split political parties. It tore families apart around the dinner table. It educated an entire generation of green-minded Swedes, who discovered the environment needed protection. Especially important was the 1979 nuclear accident at Three Mile Island, which convinced many Swedes that nuclear power was not safe. Then, of course, there was Chernobyl in 1986.

The nuclear question was so heated that in 1980, the then prime minister, Olof Palme, decided to submit it to a referendum. The verdict: phase out the country's plants by 2010. Which Sweden partly did: in 1998 and 2001, it closed down two reactors at its Bärseback plant.
But it proved difficult to phase out the remaining ten plants. In 1997, government officials acknowledged there weren't enough alternative sources of energy to do it by 2010. So they decided to delay the target for about three decades by not replacing the existing reactors. Even today, about half of the country's electricity comes from nuclear power, with the rest produced from its hydroelectric dams. Yesterday's announcement could be the death knell of the 1980 referendum.

Or maybe not – since the issue is now firmly on the political agenda for the 2010 general election. The opposition Green and Left parties are firmly against atomic energy, while the main opposition party, the Social Democrats, is deeply divided on the issue. And even though the leadership of the four ruling centre-right parties are now united in their support of nuclear power, there are rumblings within the ranks of two of the four groups, the Centre party and the Christian Democrats, which oppose the announcement.

This has led some analysts to privately suggest that yesterday's move was primarily a political ploy to undermine the opposition, rather than a move to secure Sweden's energy supply. Since Fredrik Reinfeldt's government is trailing the opposition parties in the polls, what better way to undermine them than to throw an issue in the ring that can deeply divide them? It's the Swedish equivalent of Gordon Brown announcing that Britain will join the euro to tear apart the Conservatives.

Sweden is also closely following what's going on next door in Finland, where the first nuclear reactor in western Europe in 15 years is being built. Its backers would like Olkiluoto 3 to be the shining new example of the a generation of nuclear reactors, but so far it's a nightmare, suffering endless delays and doubling budget costs.

And even though most Swedes today favour the use of nuclear power, just two years ago they were debating whether it was safe after a fault at the Forsmark plant, 100 miles north of Stockholm. According to one of the chief engineers who helped built the plant in the 1980s, it was "one of the most serious incidents that could have happened, short of an accident like Chernobyl or Three Mile Island". Half of Sweden's nuclear park had to be shut down following the incident and Swedes were left wondering whether they were too dependent on nuclear energy. Far from putting an end to the nuclear debate in Sweden, yesterday's announcement could be just the beginning.

A Viking union?

While Iceland is debating whether applying for EU membership is really the best option to rescue its crisis-hit economy, there is another option on the table growing in popularity: monetary union with Norway.

None other than Iceland's new finance minister, Steingúrmur Sigfússon, is considering the idea of using the Norwegian crown as the country's currency – a move that would have been unthinkable only a few months ago.

Asked by the Norwegian daily Klassekampen on Friday whether this was a serious option, Sigfússon answered: "We hope so. It will be natural to talk about it when we celebrate our party's 10-year anniversary [this week]. Nordic socialist party leaders are invited and I hope of course that Kristin [Halvorsen, the Norwegian finance minister] will come."

Sigfússon is the leader of the Left-Greens, the most popular political party in Iceland today, while Halvorsen leads the Socialist Left party in Norway, the sister-party of Sigfússon's.
"A strong and deceptive belief in adopting the euro has emerged [in Iceland] even though Iceland is just as far away from complying with euro criteria as poor countries in eastern Europe," continued Sigfússon, whose party is strongly opposed to EU membership. "So we think that the possibilities of currency co-operation with the Nordic countries, preferably Norway, must be thoroughly investigated."

And Norway is not saying "nei" either. "I look forward to discussing various aspects of the economic situation in Iceland with finance minister Steingrimur Sigfússon," Halvorsen told Reuters today, "also currency co-operation if that becomes a subject."

The idea of a monetary union between Iceland and Norway is not as crazy as it sounds, as the two nations have been co-operating for years. Since 2006, when US forces pulled out of Keflavik base, Iceland's national defence has been provided by Norway, as Iceland does not have armed forces of its own.

Norwegians have also been quick to ride to the rescue of their Icelandic cousins during the economic crisis. In May the Norwegian central bank said it would lend Iceland €1.5bn to prop up its economy, together with the central banks of Sweden and Denmark.

And in November, Norway again gave a lending hand to Iceland with €500m in aid as part of an IMF-led $10bn package.

The two states are culturally close, with Iceland originally populated by Vikings who left Norway more than 1,000 years ago. They also have shared strategic interests, such as control of their fisheries, which they are loth to surrender. Both have interests in the strategic Arctic region.
But not everyone is thrilled at the prospect of an Icelandic-Norwegian union, with Oslo-based economists warning that it is unrealistic. Oystein Doerum, chief economist at Norway's largest bank DnB NOR, told Reuters that the idea sounded "absurd" and would most likely be opposed by Norway's prime minister, Jens Stoltenberg, and Norway's central bank.

And as Eirikur Bergmann suggests, the lure of the euro could be such that the only viable option for Iceland really is to join the EU. So it remains to be seen whether there will be a new Viking union in Europe.