Persson faces uphill battle in euro
A No vote would be highly damaging for the SDP, which has run
Sweden for all but nine of the last 71 years. It would also be a further rebuff
for the single currency - the Danes rejected it in September 2000. It would add
to the impression that countries that give their citizens a specific vote on
the euro tend to stay out.
"The referendum can still be won - but that's
not the way it's heading at the moment," admits Carl Bildt, the former Swedish
prime minister and a leading Yes campaigner.
Financial Times, 5/6
Göran Persson, theSwedish prime minister,
badly needs something to go his way in the countdown toSweden's euro
referendum, now just 103 days away. The question is whether next week's UK
decision on when and whether to call a vote on joining the single currency will
If the UK keeps open the possibility of holding
a referendum before the next general election, it would be taken positively in
Sweden. But a more negative tone from the British government would reinforce
the view of Swedish eurosceptics that Sweden, too, should wait and see.
The latest opinion polls show Swedes will
reject the euro in the vote planned for September 14 - and by a hefty margin. A
Gallup poll published on Monday gave the No side 50 per cent, with only 32 per
cent in favour and 18 per cent undecided. Financial markets, taking their cue
from the surveys, are also expecting a No. "The referendum can still be won -
but that's not the way it's heading at the moment," admits Carl Bildt, the
former Swedish prime minister and a leading Yes campaigner.
The anti-euro sentiment that has prevailed for
more than six months has deepened in recent weeks. It has not helped Mr Persson
that the powerful, blue collar Landsorganisationen trade union group refused to
support euro membership after the Social Democratic government failed to meet
its demand for a buffer fund. The fund would have partly operated to combat
unemployment during an economic downturn. Instead the LO will adopt a neutral
Nor did the prime minister do himself any
favours last month by silencing internal dissent in his party. This was after a
number of senior SDP members, including cabinet ministers, had spoken out
against joining the euro. The clampdown was seen as a panic reaction and only
served to highlight the extent of SDP divisions.
Persuading Swedes to join the euro at a time
when the Swedish economy is out-performing the eurozone's is likely to be a big
problem for Mr Persson. The flow of economic news from the eurozone, and
particularly from Germany, Sweden's largest trading partner, is almost
unremittingly bleak. "Why should Swedes want to join a club that is doing
badly?" muses one diplomat.
When Sweden voted to join the European Union in
the mid-1990s, it helped the Yes campaigners that the country was just emerging
from the deep economic crisis of the start of the decade. Even then, the
endorsement - 52 per cent in favour, 47 per cent against, with 1 per cent of
voters cast blank - was hardly enthusiastic.
This time round, eurosceptics are arguing that
Sweden risks losing its ability to manage its own economy and it will concede
too much power to Brussels and the European Central Bank. Per-Olof Eriksson,
a former chief executive of Sandvik, the engineering group, says: "Europe is
not ready for one currency yet. Sweden can say Yes to the euro at any time in
the future. If we say Yes now, we cannot change our mind later."
Supporters of the euro kick-started their
campaign last month, earlier than originally planned, in an attempt to combat
the increasingly negative opinion polls. But the debate will get serious only
in the six weeks before the vote. The Social Democrats have the support of the
main opposition party, the Moderates, and two other centre-right parties.
Most business leaders are in favour, as are the
media, leaving opponents of the euro to focus their case on the negative views
of some economists and former central bank governors.
Mr Persson, a strong campaigner and speaker,
and Anna Lindh, his foreign minister, will be crucial in swaying the large
numbers of undecided voters.
Binit Patel, economist with Goldman Sachs in
London, says: "Swedish public opinion can change very quickly. In the run-up to
the referendum on the European Union, there was a majority for a No, but, once
the big guns started campaigning, that changed."
But the stakes are high. A No vote would be
highly damaging for the SDP, which has run Sweden for all but nine of the last
It would also be a further rebuff for the
single currency - the Danes rejected it in September 2000. It would add to the
impression that countries that give their citizens a specific vote on the euro
tend to stay out.