The art of the deal, Swedish edition

Good morning and welcome to Europe Express.

Sweden’s outgoing and new prime minister, Stefan Lofven, may be an unassuming, atypical politician who forged his negotiating skills as a welder and trade union chief. But his unlikely survival, shortly after he became his country’s first prime minister to lose a confidence vote, is a lesson on how to navigate Europe’s increasingly polarised political waters.

Slightly further south in the Netherlands, we will explore the impact of an assassination attempt on one of the country’s most prominent journalists, who has been taken to hospital in a severe condition after being shot in the head outside his studio in Amsterdam. Attacks on journalists are sadly multiplying in the EU: only a few months ago, a Greek crime reporter was gunned down outside his house in Athens. Journalists have also been killed in recent years in Slovakia, Malta and Bulgaria.

On the tech policy front, we will look at a recent push by countries including France to carve out enforcement powers from the new legal regime being negotiated.

Ultimate survivor

Stefan Lofven has pulled off another unlikely escape, writes Richard Milne, FT Nordic and Baltic correspondent.

Just two weeks ago, Lofven became the first-ever Swedish prime minister to lose a no-confidence vote. He resigned several days later.

Now, he is back as Sweden’s prime minister despite losing a vote, thanks to the quirks of the country’s negative parliamentarianism, under which a majority was needed against him to stop him from regaining the role.

The 63-year-old former welder is often written off in Sweden as one of the weakest leaders of recent times. But this is at least the third serious political crisis Lofven has successfully negotiated against the odds, showing that when it comes to holding on to power, he has few equals.

Carl Bildt, former centre-right prime minister, was most scathing of Lofven, saying he could not think of a single big policy the Social Democrat leader had pushed through. But he added: “His strength is postponing things, and surviving. That’s an art in itself.”

Bildt concluded tartly: “You can’t call it decisive leadership.”

Many observers, including former advisers to Lofven, said he is more the trade union boss he used to be than a politician. In his role as head of IF Metall, Lofven was used to negotiating hard with business leaders as well as working alongside them.

He became leader of the Social Democrats, the traditional party of power in Sweden for much of the 20th century, in 2012, when the centre-left group was perhaps at its lowest ebb, facing a centre-right government that had helped reshape the Scandinavian country through a series of bold reforms.

Although the percentage of the vote the Social Democrats have won in elections has not improved under Lofven, the most important thing for the party is that he has been prime minister since 2014, securing their power.

His own life story is extraordinary: his father died shortly before he was born and he was placed in an orphanage by his birth mother while still a baby. Brought up by foster parents, he dropped out of university to become a welder and then a trade union official.

This autumn could test his negotiating skills to the max. He owes his position as prime minister to an unwieldy mix of parties spanning the ex-communists of the Left party to the centre-right Centre party. The latter has said it would neither talk with nor back a budget negotiated with the Left.

But Lofven knows the cost of ignoring the Left entirely; it was this neglect that caused them to back the no-confidence vote against him last month in protest against a possible reform of rent controls. Passing the 2022 budget this autumn is likely to be tough.

But Lofven could be helped by the fact that if he falls, extra elections would be called for early 2022, while normal elections have to be held in September 2022. Few relish the thought of two votes in a year.

So the prime minister could hobble on, postponing the really tough negotiations until after the next elections — when Sweden’s political landscape is likely to be just as fragmented.

Chart du jour: Record growth in decades

The European Commission has revised its growth projections upwards for this and next year on the back of increased vaccinations, which have enabled many European economies to open up. Economics commissioner Paolo Gentiloni warned, however, that the projections could falter if member states withdrew their pandemic support too soon. (Read more here)

Dutch drug busters

The Netherlands has been rocked by the shooting of one of the country’s highest-profile investigative journalists, raising fears about targeted attacks against figures involved in uncovering organised crime, writes Mehreen Khan.

Peter R de Vries, a prominent crime reporter who hosted a TV show, was shot in the head in Amsterdam on Tuesday night after leaving his studio — an attack that Prime Minister Mark Rutte described as an assault “on free journalism”. De Vries is in critical condition in hospital. Two men have been arrested in connection with the shooting, said Amsterdam police.

The attempted murder followed the high-profile assassinations of Dutch public figures involved in exposing the underworld of gangland drug cartels.

In 2019, defence lawyer Derk Wiersum was gunned down in the street near his home during a trial in which he was representing a witness in a drug cartel case against alleged drug lord Ridouan Taghi. A second lawyer, Philippe Schol, was shot and seriously hurt months later in a drive-by attack. Dutch media reported he was also representing people in drug cases. 

The news prompted alarm from senior EU officials, including European Commission president Ursula von der Leyen, who demanded that “national authorities clarify the situation and bring the perpetrators to justice”. 

The EU has been shaken by a series of attacks against journalists involved in uncovering high-level corruption and organised crime. Victims include Malta’s Daphne Caruana Galizia, Slovakia’s Jan Kuciak and his fiancée, and Greek journalist George Karaivaz earlier this year. 

The de Vries shooting has been linked to his involvement as an adviser to the witness in the case against the suspected druglord, Taghi, who has been charged with six murders and accused by prosecutors of ordering the killing of the witness’s brother and his lawyer. Taghi had eluded authorities for many years and was dubbed the Netherlands’ most wanted man until his arrest and extradition from Dubai in 2019.

Lousewies van der Laan, executive director of Transparency International in the Netherlands, said the attack on Tuesday challenged “the collective consciousness of the Netherlands that this is a country without serious corruption and organised crime”.

“Intimidatory tactics are commonplace in every part of society — including against journalists and local politicians trying to root out money laundering or expose organised crime. The tactics often work,” she said.

Franco-German carve-out

Margrethe Vestager, the EU’s digital policy chief, has insisted that Brussels should be the main enforcer of new rules for Big Tech, but calls are growing for member states to have more power, writes Javier Espinoza in Brussels.

Stéphanie Yon-Courtin, an MEP with liberal centre group Renew Europe, has called for member states to play a bigger role alongside the European Commission in policing rules for technology companies dubbed “gatekeepers”.

Her views reflected a push by big countries, including her native France, for their national authorities to carve out more powers to take on Big Tech companies. Alongside Germany and the Netherlands, France recently called on the commission to hand them more power to regulate tech groups at a national level. 

Yon-Courtin told Europe Express that enforcement of the new regime must remain at the EU level, because the aim was to avoid fragmentation of the single market, but argued that the commission would not have enough capacity to monitor the rules.

“We need to have clear and sound regulation and we need to make sure we have effective enforcement too,” she said.

Her call came as MEPs and member states debated draft legislation to curb the power of Big Tech, which has been called the Digital Markets Act.

The French MEP, who will be an important voice in the debate, pointed to countries such as France and Germany that have enough digital markets experience in enforcing their own rules.

“National competition authorities should be the eyes and ears of the European Commission on the ground, they should be entitled to ask Brussels to open an investigation because countries have the experience to do so,” she said.

The commission’s main argument against such a power-sharing arrangement is that in countries where such expertise is lacking, enforcement will be minimal. A compromise is likely to emerge in further discussions this autumn, with the Slovenian EU presidency aiming to reach an agreement at least among EU governments on the matter.

What to watch today

1. European Commission president Ursula von der Leyen travels to Cyprus and Croatia to approve their national recovery plans

2. The European Court of Justice issues a legal opinion on the independence of Poland’s judges

Notable, Quotable

The new architecture against money laundering is a big step forward for the EU and the common market

• Clean-up agency: The European Commission wants to set up a dedicated anti-money-laundering authority by 2024, according to draft proposals seen by the FT and due to be put forward on July 20. Unlike the existing AML regime, the authority would have the power to directly supervise banks and slap offenders with multimillion-euro fines.

• ECB strategy: The European Central Bank’s long-awaited strategy review will be presented today. It is set to amend the central bank’s inflation target and address climate change and housing costs.

• Sacred low tax: Ireland’s history of high unemployment and emigration helps explain Dublin’s opposition to the global minimum corporate tax deal. The country has a flat 12.5 per cent rate, which is credited with having boosted productivity and attracted foreign investment.

• Out with AstraZeneca: As of August, Germany will donate all of its remaining AstraZeneca vaccine doses to other countries, mainly via Covax. Berlin has not made any plans to order more doses of the shot for next year.

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