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Sweden: Stockholm Rejects Euro Currency By Solid Margin

Swedish voters have soundly rejected the European Union's currency, the euro. At a referendum yesterday some 56 percent of the electorate said "no" to the euro. Sweden now looks likely to stay outside the eurozone for at least a decade. What are the implications of this for Europe?

Prague, 15 September 2003 (RFE/RL) -- Euro skeptics everywhere are rejoicing today as Swedish voters rejected joining the European Union's single currency, the euro.

By a wide margin -- 56 percent to 42 percent -- the Swedes voted yesterday to keep their own currency, the crown, and not to adopt the euro, which circulates in 12 of the EU's 15 member states.

Celebrations carried on through the night in Stockholm.

The rejection is more than a matter of economics. The euro is the European Union's most powerful tool to deepen European integration. By saying "no" Swedes are flying the flag of national sovereignty against the vision of an "ever-closer union" of European states.

A disappointed Swedish Prime Minister Goran Persson admitted defeat, acknowledging that he had been unable to persuade his countrymen of the need for change at a time of prosperity: "Remember one thing: Sweden is performing [economically] better than the rest of Europe and, of course, to convince the people in that situation to change their currency, say 'farewell' to your own currency and go for the project when you can see that you are performing better -- we are performing better -- that's not easy."

The salt of his tears is sharpened by the loss last week (10 September) of his comrade at arms, Foreign Minister Anna Lindh, who was stabbed to death while shopping in Stockholm. The police say they do not think the crime was related to the euro campaign but, until the killer is caught, the motive will remain a mystery.

The size of the "no" majority, although it was expected, is an embarrassment for Persson's government, and some analysts say he is now politically weakened. They do not rule out an eventual resignation.

Swedish big business was also disappointed, as it had been the strongest lobby backing the euro as a means of tying Sweden more fully into the EU's single market. The chairman of mobile-phone maker Ericsson, Michael Treschow, said future investment in Sweden is threatened: "Long term, when we are going to evaluate where we are going to put investments, of course, we look at different options. If we lose this competitive edge [the euro], then we have to have another competitive edge to secure our Swedish-based operations."

In Brussels, European Commission President Romano Prodi expressed regret at the result, but went on the offensive to say that Sweden itself will be the loser.

He told Swedish television that Sweden will "certainly" lose influence. He said he recently attended a meeting of eurozone finance ministers to discuss the future of the European economy -- and "Sweden was not there."

EU Economic and Monetary Affairs Commissioner Pedro Solbes took the same line, saying the ministerial "Eurogroup," which coordinates economic and budget policies for eurozone members, is destined to become increasingly the leading group driving the EU forward.

That basically is the point at issue, the point of ideological divide. Will Sweden and the other noneuro holdouts, Britain and Denmark, eventually be pushed to the periphery because of their refusal to join the eurozone?

Or have Swedes saved part of their national identity with the crown, and preserved to advantage their freedom of economic action?

Certainly, Sweden as an individual country has been doing better economically in the last few years than the eurozone, with double the level of growth. On the other hand, the eurozone has been a stable haven, producing previously undreamed of ease of financial transactions across the continent from Dublin to Athens.

German Foreign Minister Joschka Fischer today in Berlin emphasized what Germany sees as the importance of monetary integration.

"Just like before, Sweden was not a member [of the eurozone] and that's too bad, and I think this is where the integration process needs to be taken further among those who are member states," he said. "It has become a very important economic factor for all of us."

After a weak start amid much derision, the euro in the past year has gained stature on world markets. With 10 new member states set to join the EU next year, mostly from Central and East Europe, the eurozone will eventually greatly expand. The accession states are not being give an option, they are required to join the monetary union as soon as they meet the necessary criteria.

Some voters cited the weakness of the accession countries as a reason for rejecting the euro. As one woman voter said: "There are so many problems in many countries in Europe, and especially in the new [future EU] countries in Eastern Europe. I think we need to stabilize the economy more before Sweden shall enter the euro [zone]."

Women voters were generally more cautious than men in yesterday's referendum, and voted "no" in larger numbers. One male voter put the contrary case: "[The euro] will make life much easier for all those who travel in Europe, and it will also serve to integrate our economy even better with the other European countries."

The government says it takes the referendum result seriously. Persson says there will be no new vote on the euro until something like 2013.