Caroline de Camaret – Hello and welcome to Stockholm for "The Interview on France 24". As Sweden takes over the European Union’s rotating presidency for the next six months, our guest today is this country’s Prime Minister, Fredrik Reinfeldt. Thank you for joining us.

Fredrik Reinfeldt – Thank you.

Your presidency will be full of challenges. What would you call the priority? Is it reaching ambitious targets on climate change?

Yes, I would say that’s the main topic we would like to deliver. Because now’s the time to get the global answer to a global question. Europe has shown leadership, but Europe needs to stick together and to also be able to put up financing measures. And we also need to push on the doors of the rest of the world to get this to a global answer.

Since you mention financial measures, Sweden has had a specific tax on carbon dioxide emissions since 1991. But how are you going to convince others to follow your good example, knowing that some of them are very reluctant?

Yes, that’s right. Well, the scientists tell us that you need to put a price on carbon. The most effective way to do that is to have a CO₂ tax. We have had it for 20 years. When the price is more correctly reflecting in the usage of fossil fuels, that has a climate effect. It’s more interesting to change over to renewables or to be more efficient in the use of fossil fuels. So I would say that this is the most cost-effective, the most climate-smart way to meet the need to lower your emissions. It’s only four countries in the European Union that have the CO₂ tax. So I would of course also like other countries also to introduce it.

But England is particularly reluctant because it objects to tax harmonisation.

No. And I’m not asking for tax harmonisation. I think it should be a national-state decision. The thing that happens is that, without a correct price on carbon, one of the things you are doing is not as cost-effective. Then you have to make a lot of investment, use a lot of taxpayer money, without really knowing that you are reaching your targets. So I would say that this is the smartest way to, at the same time, take care of taxpayers’ interests and their money, and at the same time deliver on climate change.

But, in December, world leaders will be meeting in Copenhagen, and the United States and emerging countries such as India and China have thus far shown no signs of warming to an agenda setting precise targets. What can you say about that?

Well, that’s correct. Europe is using legally binding targets. I think we have to accept that there could be other ways of also making the curb that we need on greenhouse-gas emissions.

There are interesting proposals coming out now in the United States. President Obama has put in place a very good team and they have started to make legislation in the US Congress. But we need, also, to reach out on financing measures coming from the United States and, of course, they need to reflect the fact that this is the one country with the highest per-capita emissions in the world. And, without the United States making enough efforts, it will be very hard to convince China and, not say the least, India, to make efforts to curb their emissions — which are rising very quickly.

As the president of the EU, you will also have to tackle the economic crisis. What innovative ideas are you going to use to fight it?

Well, first of all, we could coordinate a lot of the answers during the French presidency last autumn under the leadership of Nicolas Sarkozy. There we got the financial stimulus packages, we got the coordination of the guarantees for the banking sector. Very important steps.

What we now are talking about is European-based supervision. Because we need increased transparency and knowledge to know where are the bad credits and where are the good ones, and to be able to follow more closely the developments in the financial sector. That is what we hope to see in place during the Swedish presidency. Because we need more efforts to get credits going, to get job creation on its way.

More efforts? You are now leading a centre-right coalition; do you want more stimulus packages and plans in Europe or less public spending?

Well, I think we are now in a situation where we have large deficits in the European economies. It was good that we could coordinate stimulus packages. We have done so in Sweden as well — investments in infrastructure, in measures to meet rising unemployment. These were good measures. But we also now need, I think, exit strategies from this soaring deficit situation that we have. Because, otherwise, we get new unbalances in the European economy — a push up on interest rates, which is not for the best of the economy.

So you are indeed very worried about the soaring debt.

Yes I am. And I think that that doesn’t mean that you have to sort everything of that out next year. But you need an exit strategy, an idea, to get back to balance in your public finances. Because otherwise, await expenditure cuts or tax rising anyhow, very soon into the future.

And a lot of the stimulus packages are now working in the European economy, with increased and better regulation on European financial supervision. I think that is also a needed step to get better credit flowing in Europe.

The eurozone will be contracting 4.8% this year, slightly less than the 5.5% of the forecasts for your country, which is outside the eurozone. Are you planning on joining the eurozone any time soon?

Well, first of all, we are a very export-oriented economy, like Finland and Germany. I think we are more deeply hit. But the economic recession is the worst we have seen since the 30s. And I think we should be grateful that we have a coordinated Europe, that we have the euro. Without that, I think we would have seen a kind of trade war.

Even from outside?

Even from outside. I must say that we would have been in deeper problems without the euro. But the Swedish people took a decision in the referendum of 2003 that Sweden should stay outside of the euro. So we are trying to respect that and we follow, of course, how our Swedish krona is developing. And, somewhere in the future, we might ask the people again if they have reconsidered. But that’s not the time now.

Another big issue facing your presidency is enlargement. You said that you wanted to open new chapters in talks with Turkey. How many and which ones?

Well, I know that they are able, probably, to open up a taxation chapter today. And we are looking on environment. Maybe an extra chapter as well. We have said that it could be one or two chapters per presidency, and a lot of the chapters are frozen from different countries. So of course it’s very...

You mean France?

Well, basically Cyprus, actually. Some of them also from other countries. But there are some still ready to open. And of course this is how to get to conditionality, to get the negotiations ongoing — which I think is very important, even though we might disagree at the end what should be the conclusion on Turkey vis-à-vis the European Union. But that’s later in the future.

As you know, both Nicolas Sarkozy and Angela Merkel oppose Turkey’s full membership. Is that the reason why the French president postponed his visit to Sweden, which was planned before the European elections?

Well, Nicolas Sarkozy is coming to Stockholm now, Friday. And, of course, I view enlargement as the biggest success that the European Union has achieved. I think we should stand to our commitments. We have promised Turkey a membership but it has to be followed on negotiations that will change Turkey to a modern European-style country.

And, at the end of the day, France and other countries can say yes or no. And I think that is after probably I — and probably also Nicolas Sarkozy — have left politics. So I think now it’s more the decision to have negotiations opening a few chapters. And, in the contacts I have had with Nicolas Sarkozy, he has said that he can accept that if they are ready, if the reforms are in place from Turkey.

OK. What about other enlargements? I was thinking of Croatia and Iceland. Can that happen by 2011?

I’m not sure. We don’t have an application from Iceland yet. I told the new Icelandic prime minister [Johanna Siguroardottir] that they can control this partly by not asking for that many, you know, special conditions that sometimes come from applicant countries. We’ll have to see.

On Croatia, this is basically linked to a bilateral conflict with Slovenia. We have had Olli Rehn, the enlargement commissioner, there trying to get a solution. But this has not been possible. A lot of Europeans are now waiting for a signal from these two countries how to move further on. Because a lot of countries are looking at Croatia. There is, I believe, an agreement to be number 28 in the European Union. But a lot of countries are of course asking themselves how they will treat Croatia. Is it possible to get negotiations ongoing? I hope to see this during the Swedish presidency but I can’t be sure.

Some members of the newly elected European Parliament would like to take some time to think it over, but you are urging them to confirm Mr Barroso at the head of the European Commission for another five years. Why is it so urgent?

Well, first of all, I think we should respect that these are two institutions that need to show solidarity between themselves. We need to listen to each other. Heads of state and government have unanimously supported José Manuel Barroso for a second term. But I will consult and listen to the parliamentary groups if it’s possible to make a decision in July. What happens if it’s postponed until later in the autumn?

Is Mr Barroso the man for the job, for you?

Well, yes. We support him. And there is no other name on the table. So why then wait? Because what we stand at risk of facing is a Europe without leadership in a moment of climate crisis, of financial crisis, where we need both a presidency ready for the work, but also a commission.

Because everyone knows that they need to drive on to the issues. And of course everyone knows in politics that if there are questions about the leadership, if the names are not ready, that’s what politicians talk about. So I want to see leadership. I want us to be active in the process of climate change. And that’s why I want this decision as soon as possible.

What would you like to say to the Irish people, who will be voting on the Lisbon Treaty with new guarantees in October?

That we have listened to the Irish people. We think that they wanted this clarification on what the Lisbon Treaty means for Ireland. They also said they wanted to keep their commissioner. And we have given them the legal guarantees in this answer.

So I now think it’s ready for the Irish people to say, “Well, with these guarantees, we are pro-European. We think we will get a better functioning European Union with the Lisbon Treaty.”

And they will vote yes?

I can’t promise that. No one can promise that. We should respect that the referendum can be a yes or a no. I think it’s their decision to take and that we should wait, with all our answers and preparation for the Lisbon Treaty until we know the answer in the Irish referendum.

Thank you for this interview, Mr Prime Minister.