Post-WW2 this was very close to reality anyway in OTL, although the "federalise by 1970" is very challenging. Look up Nordek on Wikipedia, especially the Danish version which has some good information on it. This kind of collaboration is what led to the Nordic Passport Union, Nordic Language Convention and Nordic Council. The founding of Nordek (which would be the Nordic equivalent to the EEC/EU) stumbled ultimately in the face of economic challenges and Russian paranoia on Finland (the Finnish-USSR treaty said neither side would enter alliances without the permission of the other if I remember right, which the USSR duly ignored in setting up the Warsaw Pact, but Finland obviously can't afford to do this and risk upsetting the USSR). Economically, in the days before North Sea oil, Norwegian industry and agriculture were small, and would stand to be crushed by Swedish industry and Danish agriculture, so they wanted a gently phasing in of the economic union, and financial assistance to modernise, which was not forthcoming. Iceland, only just rid of the Danish personal union in 1944 were less willing to join straight away, but would probably join at a later stage.