There are great ambitions to bind northern Germany and southern Scandinavia closer together economically. But a new analysis from the Kiel Institute for the World Economy points out that development is still hindered by border barriers, lack of cohesion in infrastructure, and a governance model where it is difficult to make joint decisions.
The analysis is about STRING, a political and administrative cooperation between regions and major cities around the southwestern part of the Baltic Sea. The cooperation includes, among others, Oslo, Gothenburg, Copenhagen, Hamburg, Schleswig-Holstein, and Region Zealand and was originally established to support the work on the fixed Fehmarn Belt link. Today, the goal is broader: to develop the area into a more cohesive, sustainable, and competitive growth region.
More obstacles
According to the report, the first major brake is national borders. They continue to create noticeable barriers to economic exchange in the region, especially between Denmark and Germany and between Sweden and Norway. For businesses, this means that geography is not the only friction. Rules, systems, and practices can make recruitment, collaboration, and trade more expensive and slower, even when markets are close to each other.
The second brake is the infrastructure, where the Fehmarn Belt connection is only one part of the equation. The analysis highlights that the connection can bring Scandinavia closer to Europe's economic centres, but the benefits depend on whether bottlenecks further up and down the system are also removed. Without better coherence in the north-south connections, Fehmarn risks becoming a strong single link in a chain that still has weak points.
The third brake concerns governance. For a new growth axis to function as a single market, the analysis suggests that more coordination in planning and investments is required. But in practice, this means that members must be willing to relinquish competencies, and that national levels must also shift some decision-making power. It is a heavy exercise in a structure that spans multiple countries.
At the same time, the broad circle of members makes cooperation more complex. Differences in interests, competencies, and resources can slow down the pace and make joint projects harder to prioritise and implement.
