We first met in Stockholm three years ago. Our discussions were all about issues such as education and climate change. The economy barely came up. But then the world was shaken by an economic catastrophe that toppled banks, destroyed businesses and ruined countless livelihoods. The wreckage is clear in Europe today: unemployment has risen by more than 7m; almost €150bn has been wiped off European Union output; average EU debt levels have risen to almost 80 per cent of gross domestic product. By any measure, these are shocking statistics.

So when we meet in Brussels today, the economy will dominate discussions. We are agreed there are four clear steps we need to take to ensure that Europe thrives and prospers.

First we need to get a grip on our debts. Because Sweden has been living within its means it is one of the member states that has weathered the crisis best. In Britain, on the other hand, the new coalition government has inherited the largest budget deficit of any EU country. Next week George Osborne, the chancellor, will set out a comprehensive plan to tackle the UK's deficit in an emergency Budget. There are difficult decisions to make but it is essential governments cut back on unnecessary spending. We have to accept there are things we can no longer afford. Both of us are determined to work with other leaders to achieve a consistent approach across the EU.