The Missing Link

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The name Øresund hardly trips off the tongue like Paris, London or Madrid. But Øresund (pronounced ora-sohn), which is the name of the sound wedged between Denmark and Sweden at the mouth of the Baltic Sea, will soon be Europe's newest — and some believe, most dynamic — metropolitan area. Thanks to a $4 billion, 16.38- km-long engineering marvel that combines a tunnel, an artificial island and a bridge, Denmark and southern Sweden have been joined at the waist, fulfilling a century-old urban planner's dream and reuniting two pieces of Scandinavia that were cleaved apart 350 years ago.

After the 8-km, double-decker bridge opens to regular traffic on July 1, the people of the southern Swedish region of Scania will have direct road and rail links to the city of Copenhagen across the sound. Historically, Scania was part of Denmark until Sweden's King Carl X Gustav wrested the area away in 1658, a point people in the southern Swedish cities of Malmö and Lund are still fond of complaining about. But when traffic starts flowing across the bridge, Øresund suddenly ceases to exist as two separate, mildly successful urban areas. In its place will be a single metropolitan area with 3.5 million people and a combined GDP of $120 billion annually. That's Europe's 12th-largest in economic terms, overtaking Stuttgart and Brussels-Antwerp.

Anders Olshov, economist at the Scandinavian banking giant MeritaNordbanken in Malmö, reckons the connection will boost the economy by about $3.5 billion a year, increasing GDP about 1% in the long run. "Øresund is definitely more attractive now as a Nordic capital, it has all the right services," Olshov says. Among the advantages: Copenhagen's uncrowded airport, a pool of educated labor that can function easily in both Swedish and Danish, as well as English, and easy access by road to the rest of Europe.

In the past, big companies often chose Stockholm as the regional center of Scandinavia using the simple yardstick that it was the largest Nordic metropolis. Now, however, the Copenhagen region is stealing Stockholm's thunder, in large measure because of the bridge. Marriott and Hilton are each building luxury hotels in Copenhagen, and a number of blue-chip global companies, such as DaimlerChrysler and Gillette, have chosen Øresund for their Nordic headquarters. "Øresund will be able to sell its combined resources not only as the largest Nordic area but as a transport crosspoint, which will make it much easier to attract industry and foreign companies," says Christian Matthiessen, a geographer at Copenhagen University.

The bigger population of the region should also help create the critical mass of human capital needed to attract investment in such high growth fields as Internet technology and biomedical research. There are 11 universities in the region with 135,000 students. A recent study by Den Danske Bank noted that in terms of "scientific output," as measured by published papers, Øresund lags behind only London, Paris and Moscow.

Surveying the opportunities once the bridge opens, Swedish businessman Hans Möller, head of Primant, a computer software company in Malmö, noted: "Our business plan foresees almost all of our future growth in Denmark." Even low tech has its allure in Øresund. Sven Ipsen, who heads the office cleaning giant ISS in Copenhagen, which employs 4,000 largely unskilled workers, says he plans to bus in 500-800 workers daily from Sweden. "It's a fantastic opportunity: wages are a bit lower in Sweden, and the two countries have the same culture."

Another big boost for the bridge is the expectation that trade will flourish when consumers realize what bargains lie on the other side. For example, IKEA furniture is about 20-25% cheaper in Sweden than in Denmark, while a visit to the dentist or the optician is only half as expensive in Malmö as in Copenhagen. What's more, while Danish law restricts weekend opening hours, Swedish shopping malls are open on Sunday. Swedes are likely to be attracted by the relatively low alcohol prices in Denmark, such as beer that is 68% cheaper than in near-prohibitionist Sweden.

The main debate on the bridge is now about the cost of actually using it. The toll for a one-way car trip is nearly $30, and even the 30-minute train ride will cost more than $7. While commuter tickets will be cheaper, the management of the state-owned consortium operating the bridge has been criticized for spending so much on an infrastructure project and then pricing it so it will be used only sparingly.

Jacob Vestergaard, spokesman for the consortium that is operating the bridge, said he expected the number of commuters from Sweden to Copenhagen, now about 2,000 using ferries, will double. Vestergaard acknowledges that this could be much higher if the toll was lower, but says the price was set to avoid killing the existing ferry business. Danish Environment Minister Svend Auken says that the high price will motivate people to leave their cars home and use the train, which is good for traffic and pollution.

The pricing policy has been attacked by business interests and economists on both sides of the sound. Sten Wandel, a professor of logistics at Lund University in southern Sweden, says the region would probably benefit most by having no tolls at all. He thinks the highest payback to the bridge would come from a $7.50 car toll, instead of $30. "Companies in the region are going to realize very little benefit from the bridge," said Wandel, noting that a commercial van will be charged almost $60 for a single trip.

Another controversy surrounds the tax loopholes that suddenly arise from the bridge. Fearing an exodus of executives to Sweden, where housing is typically half as expensive as in Copenhagen, the Danes persuaded the Swedes to change their laws so that commuters will now pay taxes where they work, instead of where they live, as in the past. Municipal authorities in Malmö are just waking up to the fact that the estimated 8,000 people who will commute to work in Copenhagen will pay Danish taxes, yet send their children to school, visit the hospital and call the fire department in Sweden. Malmö real estate broker Bertil Steen says housing prices have risen by 50% in the past two years as the market factored in the possibility of commuting to Copenhagen.

Inevitably, the bridge has reopened the four-century-old wounds left when Sweden annexed Scania. "Scanians have the same relation to Sweden as Scotland does to Britain," says architecture professor Peter Broberg, a longtime campaigner for Danish culture in the southern Swedish region. "We belonged to Denmark for 1,000 years and Sweden has tried to take away all my cultural roots."

Thankfully, the new physical link won't lead to the beheadings and pillage that swept the land when the Swedes wrested Scania away 342 years ago. Broberg and his Foundation for Scania's Future merely want Stockholm to set up a separate regional parliament, not a return to Danish rule. Yet the bridge will move the people of southern Sweden closer to Copenhagen in a host of ways; Stockholm's allure, which once attracted the cream of Swedish youth, has already begun to be eclipsed by the booming Øresund. The name may be hard for some to pronounce, but it will soon be on the lips of more and more European businesspeople.