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1 1 (August 26, 2019)

handle is hein.crs/govbauy0001 and id is 1 raw text is: h NCongressional Research Service ~Informing the legislative debate since 1914 The Nordic Countries and U.S. Relations Political and Economic Overview The five Nordic countries-Denmark, Finland, Iceland, Norway, and Sweden-share deep historical, linguistic, and cultural ties and many political and economic similarities. They are all stable democracies with parliamentary systems of government and prosperous market economies with relatively high standards of living. With a total population of roughly 27 million people (see Figure 1), the Nordics collectively form the world's 12th-largest economy. They have extensive social welfare systems and relatively high tax rates but are considered to be innovative, business- friendly countries. The Nordics generally rank high on global competitiveness indexes. Foreign trade plays a key role in their economies. They also enjoy substantial natural resources. Norway in particular benefits from vast North Sea oil and natural gas deposits. Despite many advantages, the Nordic countries face some challenges. The Nordics struggled economically following the 2008-2009 global recession and subsequent European financial and banking crisis. Economic growth has rebounded since (to around 2% in 2018 in all but Iceland, where it was over 4%), but unemployment is relatively high in Sweden and Finland (over 6% in each). Iceland's economy has slowed in 2019 due to difficulties in its tourism and fishing sectors; many experts expect an economic slowdown in other Nordic countries amid current global trade tensions and uncertainties. Aging populations and fertility rates below replacement rates also raise questions about the long-term sustainability of the Nordics' social welfare systems. In recent years, migration policy has become a key political issue in the Nordics. The spike in refugees and migrants in Denmark, Finland, Norway, and Sweden during the height of the flows into Europe in 2015 strained education, housing, and welfare systems in all four countries. Most Nordic governments introduced tighter asylum policies and curtailed some welfare benefits. Refugees and migrants also have stirred debate about identity, integration, and security in the Nordics. Promoting societal integration has received heightened attention given that several hundred Nordic citizens fought and/or trained with the Islamic State terrorist group (also known as ISIS or ISIL) in Syria and Iraq, and in light of two terrorist attacks carried out by asylum-seekers in Sweden and Finland in 2017. Economic and immigration concerns have generated voter distrust of established center-right and center-left political parties throughout the Nordics. This has fueled the rise of populist parties in the Nordics, increased fragmentation in national parliaments, and upended some traditional political alliances. Most anti-establishment, populist parties in the Nordics are on the right or far right and hold nationalist and anti-immigrant views. A right-wing populist party has been Updated August 26, 2019 part of successive Norwegian coalition governments since 2013. Far-right, nationalist, anti-immigrant parties are the second- and third-largest parliamentary parties in Finland and Sweden. In Denmark's June 2019 elections, a center- left party embraced certain populist positions, including stricter migration policies, and is now the governing party. Figure I. The Nordic Countries: Key Facts Membership(s) * NAT 0 European Union (EU) fPopulation $ GDP n , .... Source: Graphic by CRS, based on Economist Intelligence Unit data. Foreign and Security Policies The Nordic countries generally share an international outlook that prioritizes cooperation, both among themselves and with the international community. The Nordics work together on regional issues in the interparliamentary Nordic Council and the intergovernmental Nordic Council of Ministers. They promote Nordic defense cooperation through NORDEFCO, a forum that brings Nordic military officials together. Since the 1950s, the Nordic Passport Convention has allowed Nordic citizens to travel freely and reside in any Nordic country. The Nordics also are strong proponents of the United Nations and multilateral solutions to global challenges. They are frequent contributors to international peacekeeping missions, major providers of development and humanitarian assistance, and supporters of U.N. efforts to address climate change. Some foreign policy differences exist among the Nordics. As seen in Figure 1, Nordic membership in NATO and the European Union (EU) varies. Although Sweden and Finland are close partners of NATO, they maintain a nonaligned status. Finland is particularly mindful of its relationship with Russia, with which it shares an 800-mile land border. Finland is the only Nordic country that uses the euro, the EU's common currency. Iceland and Norway remain outside the EU but participate in the EU's single market and the Schengen area of free movement. po scongr

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