Sweden and the euro: Voters can be such a nuisance

Date: 20/09/03

Will Europe's leaders ever start listening to their citizens?

IN THE end, Sweden's voters rejected their government's plan to adopt the euro by a surprising margin. Although the government of Göran Persson was itself divided on the issue, the weight of opinion across the main political parties, the business press and other media had been overwhelmingly in favour. The yes campaign was many times better financed than the comparatively invisible no campaign. And just days before the vote, Anna Lindh, Sweden's appealing foreign minister and spokesman for the yes campaign, was stabbed to death, arousing outrage that seemed likely to draw votes to her side. Yet Sweden voted no by 56% to 42%: under the circumstances, a crushing defeat for the pro-euro alliance.

Whether Sweden has made the right decision is debatable. From an economic point of view, there are things to be said on both sides. In some ways, Sweden is the ideal euro candidate: a small, open and internationally competitive economy, with more than most to gain from exchange-rate stability across Europe. On the other hand, the euro area is performing badly, partly because its economic-policy rules have been poorly designed, whereas Sweden is doing well. A vote to wait and see, if that is what it was, makes sense. Sweden can adopt the euro later, if it seems to be losing inward investment, or if the policy rules are mended, or if the euro area's performance inspires. In this, no is not for ever. Yes is - or that is the idea, anyway.

In fact, however, Sweden appears not to have been voting to wait and see. Arguably, the country was not even voting about the euro, as such. So far as one can tell, the vote reflects a verdict on the economics of the single currency less than it expresses deeper suspicions about what the European project implies for Sweden's sovereignty and for the future of its democracy. This matters for Europe as a whole, not just Sweden, because people in many other countries have similar doubts - and because many of them, just like the Swedes, will shortly get a chance to say so.

Next month the European Union embarks on an inter-governmental conference (IGC) whose task is to finalise the proposed new European constitution. We have already said what we think of the draft constitution produced by Valery Giscard d'Estaing's convention - we think it fit for the dustbin - but we will leave further denunciations for another time. The point is that the new constitution, once it emerges from the IGC, will need to be ratified by every government in the Union. In several countries, it is already understood that ratification will be subject to referendum. Pressure for a referendum is mounting elsewhere too - notably in Britain, whose government has pledged to deny a vote to its citizens, despite the fact that more than 80% of voters say they want one.

How many Swedens?

As widely noted, Sweden's rejection of the euro will sustain anti-euro opinion in Denmark and Britain (the union's other non-euro members) and makes it unlikely that any of the three will soon fall into line: the EU will therefore remain a multi-currency area for the foreseeable future. That is significant, but far more important is the fact that forthcoming referendums on the constitution now seem increasingly unlikely to go as governments would wish. It will take only one Sweden to block plans for a new constitution, and two or three might kill them.

“When we ask voters a European question, the answer is either no, or yes by only the narrowest of margins,” the Financial Times quoted an official of the European Commission as saying this week. “That should be telling us something,” he added. This penetrating insight deserves applause. It should indeed be telling them something. Mainly, it should be telling them that the “ever closer union” envisaged by the proposed constitution does not seem to be what most Europeans want.

It is true that Europe needs new rules if the EU is to function at all after the admission of ten new members, with more to follow. Procedures will have to be simplified. But in revising the rules to this end, it is vital to define and protect the powers of the sovereign countries that make up the group - and to do so in a way that voters understand. On present plans the new constitution not merely fails in this, it seeks to blur and erode national powers still further. Hitherto, Europe's leaders have made it their specialty blithely to ignore popular doubts about their European vision. Few of them seem ready to try a different approach. They should look at Sweden, think about the obstacles between here and ratification of a new constitution, and get to work at next month's meeting on plan B.

Editorial asks 'Will Europe's leaders ever start listening to their citizens?'. What about the referendums to be held in many countries on the new European Constitutional Treaty?