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UPDATE 1-INTERVIEW-Swedish PM: EU should avoid separate summits

Published 02/28/2011, 01:30 PM
Updated 02/28/2011, 01:32 PM
EUR/SEK
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* Reinfeldt says euro zone-only summits don't help

* Doubts usefulness of new competitiveness measures

(Adds quotes, details, background)

By Andreas Rinke

HAMBURG, Feb 28 (Reuters) - Swedish Prime Minister Fredrik Reinfeldt told Reuters on Monday that the European Union should avoid separate summits for members of the single currency zone such as a March 11 meeting to discuss euro zone crisis measures.

His comments clashed with a joint proposal by Berlin and Paris earlier this month for euro zone leaders to hold annual meetings to review steps to improve economic cooperation.

Reinfeldt said in an interview in Hamburg that his country was not a member of the euro zone but was reform-minded and had performed well through the euro crisis.

"We should not have that kind of division inside the European Union for the future," he said, adding that the currency bloc could already meet on its own at ministerial level as the Eurogroup.

"I think we should not divide the European Union, but stick at the 27 members being present when it comes to heads of state and government," said the conservative Swedish leader.

European Union leaders will meet in three separate summit formats in March -- leaders of 14 centre-right EU states gather in Helsinki on March 4, the 17 members of the euro zone have their own summit on March 11 and finally there is a summit of the full membership's leaders on March 24-25.

These summits are expected to discuss a comprehensive euro zone crisis response including a competitiveness pact, with public spending reforms, pushed by Germany and France.

But Reinfeldt said he was sceptical about the need for such a competitiveness package, saying Europe already had plenty of pacts which it does not comply with, citing as examples the Stability and Growth Pact and the "2020 Agenda".

"Just by following through on what we have already decided I think we would create a lot more competitiveness. Until I see what is the exact content, I am not sure the solution should be the creation of new institutions or new facilities until we do not follow the ones we already have," he said.

Reinfeldt reiterated his view that there is no chance at present of Sweden wanting to join the euro, saying "the issue is not open for the moment". Sweden voted against euro membership in a referendum in 2003, under a centre-left government.

Sweden's economy has bounced back from a 2009 recession, its worst since World War Two, and the crown recently hit 10-year highs against the euro . It strengthened a bit more against the euro after the central bank released minutes that set a hawkish tone for Swedish interest rates. [ID:nLDE71R0NH]

Reinfeldt expressed doubts about how helpful it would be for Europe to offer further aid to struggling Greece and Ireland, citing Sweden's experience of its own crisis in the early 1990s.

"It took us eight years to come back, eight years of very tough reform," he said, adding that while he was sure Greece and other countries had "done a lot" to put their houses in order, emergency loans were a stop-gap measure "but not a solution".

(Reporting by Andreas Rinke; writing by Stephen Brown; Editing by Ron Askew)

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