| Author (Person) | Bower, Helen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Title | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Details | 13.9.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 13/09/2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Membership of the eurozone is set to remain at just twelve of the EU's fifteen Member States for the foreseeable future after Swedes voted not to take their country into the single European currency in a referendum held on 14 September 2003. Overshadowed by the fatal stabbing of Anna Lindh, Sweden's foreign minister, just days before, the referendum had been expected to be particularly close but in the event 56% of voters said 'No' to the euro compared to 42% who supported it. The result, which follows the Danish rejection of the euro in 2000 and the British government's decision earlier in 2003 to postpone any referendum on adopting the European common currency, has led many commentators to suggest that public opinion on the euro is reflective of the general dissatisfaction felt amongst Europeans about the 'Brussels project' which is seen as distant and elitist. Background Following a comfortable victory for the Social Democratic Party in The announcement came the day after the publication of an opinion poll that suggested support for the euro in Sweden was hanging in the balance with 43% saying they would support the euro, 43% against it and 14% undecided. Yet, another survey published in November 2002 by Statistics Sweden suggested that 40% would vote in favour of Sweden joining the euro if a referendum were to be held compared to 35% against. Although the results suggested that the Swedish Prime Minister, Göran Persson, would be able to lead a successful campaign, they actually reflected a fall in public support for the single currency compared to six months earlier. In May 2002, 46% of those surveyed supported membership of the euro compared to 31% - these results reflected the general state of Swedish support for the euro since November 2001 when those in favour of the euro began to outweigh those against. Up until then, the majority of Swedes had appeared comparatively sceptical about the number of decisions which were being taken at European level and were not yet ready to give up more of their national sovereignty. The country had only joined the European Union six years earlier after a small margin of victory in the 1994 national referendum on EU membership and a government report entitled 'EMU - A Swedish Perspective', published in 1996, raised grave concerns about what would happen if Sweden's economy was to move out of step with other European economies since the national government would have relinquished its ability to adapt monetary policy to the economic situation. Although the political arguments for joining the euro were strong, the report concluded that the economic arguments were more important and the political case for joining would not be so important since several other countries were expected to remain outside EMU initially. Ultimately, the Riksdag, voted in December 1997 in favour of a bill rejecting Swedish participation in EMU although it suggested that, 'Sweden should keep the door open for a later Swedish participation in the monetary union. If the Government later finds that Sweden should participate, the issue will be placed before the Swedish people for judgement'. More background on Sweden's position on economic and monetary union can be found in European Sources Online's earlier In Focus: The Referendum Campaigns Following the government's decision to hold a referendum on euro membership, the anti-euro activists kicked off the referendum campaigns in good time by enticing three government ministers (deputy prime minister, minister for industry and minister for culture) to speak out publicly against the euro in February 2003. This was followed by opinion polls which suggested that even before the Spring the anti-euro campaigners were enjoying an early lead. Concerned about the swing in support for the euro Mr Persson, who had promised his party members freedom to express their own opinion on the euro issue, ordered that ministers were henceforth to maintain a low profile. The Prime Minister then went on the counter attack, moving the focus of the debate on from who thought what, to the economic and political advantages of joining the single currency. In his traditional 1 May speech he spoke of the thousands of jobs that would be created and the cheaper mortgages that would be available if only Sweden joined the euro. Whilst these may have been dramatic claims, the pro-euro campaigners have emphasised both the political and economic gains that would come with joining the eurozone. They say that joining the euro would give the country more political clout in EU affairs and would prevent Sweden being subjected to the ruthless currency speculation experienced in 1993. They also claim eurozone membership will encourage growth, leading to more jobs and tax income, which would ultimately support Sweden's famously generous welfare state. Finland is cited as an example of a Nordic country which has benefited greatly since joining the single currency in 1999, with economic growth of 3% a year and significantly lower interest rates, giving a boost to households in the form of lower mortgages and lower investment costs for business. In contrast, the anti-euro activists cite Germany as an example of all the problems Sweden will face if it joins the euro. They claim that Germany's experience proves how difficult is to stimulate growth under the constraints of the stability pact and in the absence of an independent monetary policy. Søren Wibe, one of Sweden's No campaign leaders, told the Financial Times, 'Germany is a practical example of what can happen when you join the euro. When you are in a recession you haven't got the instruments you need to work your way out of the situation.' No campaigners also argue that joining the euro will threaten Sweden's low unemployment rate with average figures of 8% in the eurozone, compared to 4% in Sweden. They also claim that Sweden will always be an insignificant player in the 'European club' irrelevant of whether or not it joins the euro. With clear cases for and against the euro, one of the most notable factors of the euro campaign has been its ability to split Sweden's political parties down the middle into 'yes' and 'no' camps. Traditionally, Swedes are used to dividing their politicians into 'left and 'right' but this has not been applicable in the euro campaign. While the Social Democrats have traditionally been supported unwaveringly over EU issues by Sweden's non-socialist parties (the Moderates, Liberals and Christian Democrats) many members have spoken individually out against the euro and the Centre Party (the Christian Democrats) have actively campaigned against the euro. However, the Social Democrats have enjoyed surprise support from many members of the Left and Green Party, which have traditionally been anti-EU, but which are now mustering forces for a Europe of the Left. Thus both right and left have been represented in the pro-euro campaign while young anarchists and leading industrialists have campaigned together for the No campaign. The Referendum: Emphatic No Just four days before the referendum all campaigning was dramatically halted following the tragic death of Anna Lindh, the country's foreign minister and the 'face' of the pro-euro campaign. Mrs Lindh was shopping in a department store in Stockholm on 10 September 2003 with a friend when she was brutally stabbed. She was taken to hospital and died from severe internal bleeding after undergoing surgery for more than ten hours at Karolinska Hospital. The death of one of Sweden's up and coming politicians who had earned widespread respect from her countrymen and internationally for her work as foreign minister shocked the nation. Proud of their open political culture, which sees politicians mingling unprotected with their electors, Swedes began to question whether such a culture should continue in the future. At a time when the 'No' campaigners were still ahead in the polls, the political debate switched dramatically from Sweden's membership of the euro to Sweden's culture of democracy and openness and Mr Persson led a demonstration against violence in Stockholm on 12 September 2003. But despite the sombre mood, the leaders of Sweden's seven political parties decided that the referendum should go ahead on 14 September 2003 as a fitting tribute to a woman who had campaigned so actively up until her death. Many even suggested that the pro-euro campaigners would taste victory as a result of the 'Anna sympathy vote'. In the event, the opinion polls proved right and the No campaigners registered victory with 56% voting to keep the krona. But the result shocked many who had thought it would be a much more closely fought contest. With an 80% turnout, only 42% supported the Prime Minister and the euro campaigners, and each region voted to keep the krona with the exception of the capital Stockholm. The effects of the 'No' vote in Sweden and the EU Göran Persson was forced to admit that the result was a clear victory for opponents of Swedish Euro-membership and he suggested that another euro referendum was not likely in the coming decade. He blamed the defeat on bad timing and the behaviour of some eurozone countries which have continually breached the rules of the Stability and Growth Pact. Swedish businesses have also expressed their disappointment at the vote, with some going as far as to suggest they will seek compensation from the government for income lost as a result of keeping the krona. But the effects of the Swedish rejection are likely to be felt far further afield than Sweden itself. In particular, the result is likely to strengthen the 'No Euro' lobby in Denmark and the United Kingdom, the two other countries outside the eurozone. While pro-euro campaigners there had hoped to cite the problems of being further isolated if Sweden had joined the euro they will now face an uphill battle. Within the eurozone itself, the vote of no confidence will fuel once again the debate of the strict budgetary rules of the Stability and Growth Pact which have been repeatedly flouted by many eurozone members and may encourage the European Commission to adopt tougher penalties for countries such as France and Germany in an effort to boost the single currency's reputation. Whilst the President of the European Commission, Romano Prodi, spoke of such measures 'We are working to reinforce our institutions, our bank, of course we need to have a more coherent economic policy' he also warned the 'outs' that they would lose political influence - 'if you are not in you are out, it's very simple - you cannot be in and out together', he told the BBC. The European Commissioner for Economic and Monetary Affairs, Pedro Solbes, was also keen to downplay the result claiming that Sweden would be forced to join sooner or later since it had not, unlike Denmark or the UK, negotiated an opt-out from EMU in the Maastricht Treaty. However, it is unlikely that in a country which prides itself on its strong democracy the government would force the people to drop their currency against their will. Beyond the economics, some commentators have suggested that the Swedish result reflects the general apathy, indeed dislike, of the European citizen, for the European Union project. They have suggested that the Swedish referendum should serve as a wake up call to those in Brussels that issues such as the so-called 'democratic deficit' need to be addressed. While EU officials argue that such problems are being tackled through the Convention on the Future of Europe, commentators claim that public support needs to be bolstered before any referendums on the draft EU constitution take place. Further information within European Sources Online: European Sources Online: Topic Guides
European Sources Online: In Focus
European Sources Online: Financial Times
European Sources Online: European Voice
Further information can be seen in these external links: EU Institutions European Commission
European Parliament
National Organisations Sweden: The Swedish Government: Prime Minister's Office Sweden: The Swedish Government: Ministry of Finance
Sweden: Bank of Sweden
Miscellaneous Organisations Virtual Sweden: The official gateway
SNS: Center for Business and Policy Studies
The European Policy Centre
Centre for European Reform
Bank for International Settlements
United Kingdom: No euro campaign
News Organisations BBC News Online Further and subsequent information on the subject of this In Focus can be found by an 'Advanced Search' in European Sources Online by inserting 'Sweden and the euro' or 'Sweden: Euro referendum, 14 September 2003' in the keyword field and selecting 'Exactly these words'. Helen Bower Compiled: 15 September 2003 Swedes have voted not to join the single European currency in a referendum held on 14 September 2003. |
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| Subject Categories | Economic and Financial Affairs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countries / Regions | Sweden | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
