Obama Sweden Stop Offers Moscow Alternative

Photographer: Jewel Samad/AFP via Getty Images

President Barack Obama waves as he disembarks from Air Force One at Stockholm Arlanda International Airport in Stockholm today. Close

President Barack Obama waves as he disembarks from Air Force One at Stockholm Arlanda... Read More

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Photographer: Jewel Samad/AFP via Getty Images

President Barack Obama waves as he disembarks from Air Force One at Stockholm Arlanda International Airport in Stockholm today.

President Barack Obama arrived in Sweden today on a visit prompted by his falling out with Russia that now is overshadowed by U.S. moves to strike militarily at Syria.

Air Force One touched down in Stockholm mid-morning local time, after the president campaigned yesterday for congressional authorization to use force in response to Syria’s attack on civilians with sarin gas. The stop gives Obama a chance to focus on economics before a summit with other leaders of the Group of 20 nations, where Syria also will dominate the discussions.

Sweden instituted economic reforms that helped it weather Europe’s crisis and may give Obama a message to take to European countries when he arrives tomorrow in St. Petersburg, Russia, for the summit, said C. Fred Bergsten, senior fellow and director emeritus of the Peterson Institute for International Economics in Washington.

“It really is a positive model,” he said. “A lot of people still think of the old Sweden, this image from the distant past of a socialist utopia, even though they changed all that 20 years ago and have developed this really successful model.”

“When they had a financial crisis in the 1990s they reformed it,” Bergsten said. “They came through this latest crisis in flying colors.”

Meeting Agenda

Trade and investment, climate change and security issues including Syria and Egypt are on the agenda for Obama’s meeting and news conference today with Prime Minister Fredrik Reinfeldt and their dinner tonight with leaders of Finland, Denmark, Iceland and Norway.

Sweden and its Nordic neighbors have demonstrated how nations can “maintain a degree of social responsibility and also draw on the benefits of market forces,” Bergsten said.

Swedish consumer confidence is at its highest in two years. The consumer confidence index rose to 99.3 from a revised 98.3 the previous month, the Stockholm-based National Institute of Economic Research said on Aug. 28.

A manufacturing confidence index jumped to 100.1 from a revised 94.9. Seasonally adjusted unemployment was 7.8 percent in July, according to Stockholm-based Statistics Sweden.

Reinfeldt, in power since 2006, is seeking a fifth round of income tax cuts next year to increase incentives to work and boost demand in the $540 billion economy. The government this year is spending about 25 billion kronor ($3.9 billion), about 0.7 percent of gross domestic product, on infrastructure, education, research and on cutting the corporate tax rate to 22 percent.

Swedish Support

Sweden has contributed to the International Security Assistance Force in Afghanistan and supported the NATO action in Libya in 2011.

Obama’s Sweden stop is a substitute for a Moscow meeting with Russian President Vladimir Putin ahead of the G-20 in St. Petersburg. The White House made the scheduling switch after Russia’s decision to grant temporary asylum to fugitive former security contractor Edward Snowden deepened the rift between Obama and Putin. Snowden faces espionage charges in the U.S. for revealing National Security Agency surveillance programs.

The U.S.-Russia split also involves the approach to Syria. Putin is Syrian President Bashar al-Assad’s most prominent foreign ally and has blocked any strike authorization by the United Nations Security Council.

Putin’s Stance

Putin has cast doubts about U.S. evidence that Assad’s forces used chemical weapons against civilians in the Aug. 21 attack in a suburb of Damascus.

Obama will seek to rally support from other nations at the G-20 summit, though only French President Francois Hollande has said his country would support a U.S. strike.

U.K. Prime Minister David Cameron was blocked by the House of Commons from taking part in a military action against Syria. Foreign Secretary William Hague told Parliament this week that Cameron would pursue options “through every channel” while at the G-20.

While in St. Petersburg, Obama plans to hold bilateral meetings with Hollande and with Chinese President Xi Jinping, according to a White House official who asked not to be identified discussing the talks before an announcement.

Hollande has pressed for a global response to punish the Syrian government over the use of chemical weapons near Damascus last month. Xi’s government has said it’s “gravely concerned” some countries may act unilaterally and has called instead for a full UN inquiry into the incident.

Before Obama leaves Sweden for Russia, he plans to take part in a celebration of the life of Raoul Wallenberg, the Swedish diplomat credited with saving the lives of tens of thousands of Jews from Nazi-occupied Hungary during World War II. While the details are still in dispute, Wallenberg is believed to have died in a Moscow prison in 1947, two years after Soviet authorities detained him.

To contact the reporter on this story: Margaret Talev in Washington at mtalev@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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