By many standards, Sweden is the envy of Europe. It has great delicate energy to wield because it takes on the rotating presidency of the EU’s ministerial councils. But a latest go to to Stockholm left me considering that Swedes really feel as disoriented by a quickly altering world as everybody else.

One motive is home malaise. An epidemic of shootings — 60 gun murders throughout Sweden final yr, in opposition to 9 in London — little question fuelled the rightwing nationalist Sweden Democrats’ election success final September. Previously shunned, the social gathering enjoys a proper deal for parliamentary assist of the brand new centre-right coalition authorities.

However simply as momentous is the exterior identification disaster of a rustic lengthy dedicated to neutrality, free commerce, market liberalism and multilateralism. As an alternative struggle, political fragmentation and a renaissance of state financial activism are the playing cards Stockholm is dealt because it chairs its EU friends for the subsequent six months.

Among the adjustments swimsuit the three-month-old authorities. As overseas minister Tobias Billström identified to me, his Average social gathering has lengthy favoured becoming a member of Nato, which the Swedes are actually doing. The primary hurdle is Turkey’s ratification of their accession. “We’re fulfilling to the letter” circumstances agreed with Turkey final yr, Billström says. The message from each Sweden and fellow candidate Finland is clearly that they’ve performed sufficient, and the majority of the alliance appears to agree. To this observer, it appears to be like like Ankara has extracted the utmost it will probably.

Adapting liberal financial traditions to a extra hostile world is tougher. Stockholm can be historically sceptical of extra powers or cash for Brussels, in opposition to present clamours for each. Billström factors out it has all the time been for “a powerful EU in sure sectors” corresponding to commerce and the rule of legislation. And if Sweden will get its means, it’s going to carry what many there name the optimistic commerce agenda, and produce the EU’s many pending commerce offers nearer to their conclusion.

For now, although, the defensive commerce agenda will get most EU airtime. It was boosted by the US Inflation Discount Act, which belatedly goals to kick-start inexperienced US trade however discriminates in opposition to European exporters. “A large headache” for Swedish preferences, says one insider. However after the UK left the EU, Stockholm is commonly compelled to nuance its free-trading instincts to stay related within the debate.

“Sure to strategic autonomy,” says Billström in reference to French president Emmanuel Macron’s phrase for a extra activist financial and overseas coverage, “so long as it’s not one thing that limits the potential of export and import.” Requested about requires a European countermeasure to America’s IRA, Billström insists on avoiding commerce disputes and subsidy races. Whereas it’s “essential” for the US to mitigate destructive results for Europe, he says we must always welcome Washington’s dedication to emissions cuts.

But the very best can turn out to be the enemy of the great. Each political and financial logic factors to subsidising the applied sciences that facilitate the carbon transition. If that logic wins, the selection turns into not for or in opposition to subsidies, however between widespread EU subsidies or nationwide ones. And a subsidy race inside Europe might do rather more hurt than a subsidy race between the EU and US.

On this turmoil, company and political Sweden appears to be like to the competitiveness agenda because the place to land on their toes. A evaluate is predicted from Brussels quickly. Given how divided opinions are, it’s going to inevitably convey political battles to a boiling level earlier than any choice by leaders. If Sweden can safe a concentrate on long-term productiveness and never protectionism, it’s going to safeguard Europe’s financial prospects in addition to its personal free-trading soul.

There may be one custom Sweden is efficiently doubling down on. Its dedication to a rules-based order has solely been strengthened by Russia’s assault on Ukraine. Because the Nato choice reveals, within the selection between neutrality and a world run by guidelines, neutrality needed to go.

Accordingly, Billström countenances no different resolution than “Ukraine successful the struggle on the battlefield” — and meaning all of Ukraine. “Re-establishing Ukraine’s territorial integrity is what this struggle is finally about.” Ukraine, he says, “has to win for the remainder of us to be assured that this isn’t 1815, the time of the Congress of Vienna”. He vows extra assist for Ukraine and hopes for a tenth Russian sanctions package deal on Stockholm’s watch.

The Congress of Vienna, after all, marked the twilight of Sweden as an ideal European energy. The nation’s contributions to the standing of fellow small states in a world of guidelines are a prouder legacy.

martin.sandbu@ft.com