Sweden, Denmark and the European Union: Changing views – in opposite directions

Date: 23/08/03

Swedes look ready to reject a switch to the euro. Danes would welcome one, but are not so sure about the new European constitution

CONTRARY folk, Scandinavians. When the Swedes' Social Democratic prime minister, Göran Persson, last November announced a referendum on adopting the euro, he was confident they would say yes. Polls showed a small but steady majority that way, and he had just been re-elected. Yet barely had he made up his mind than the voters changed theirs. Today, after months of “yes” propaganda from his party and the opposition alike, and lobbies advertising as if kronor grew on trees, polls still show a solid majority saying no.

There are still three weeks before the vote on September 14th, and 20% of undecideds to go for. But can he do it?

Plenty of carrots are on offer. Vote yes, and, it is said, the economy will boom, creating 100,000 new jobs. Mr Persson claims typical home-buyers will save SKr1,000 ($120) a month in lower interest rates. Ann-Christin Nykvist, the consumer minister, says a family with small children will gain SKr30,000 a year as competition cuts prices. And then there's stick. Vote no, says Mr Persson, and cutbacks in the welfare state may be needed this very autumn.

Yet for every pro-euro economist another can be found who says Sweden is better off controlling its own interest rates. It now has more growth and less unemployment than the euro zone. So the yes side has turned to politics: the euro is a peace project that helps unite Europeans; without it, Sweden will be isolated and without influence on the EU's big decisions about the future. And so on.

But the Swedes have a long history of being outside. They do not belong to NATO, and in 1994 voted to join the EU only by 52% to 47%. Denmark too sticks to its krone, and Norway has said no to the whole EU project. Nor is Mr Persson's camp united. Core Social Democratic voters - like the LO, the powerful blue-collar trade-union body - fear for Sweden's generous welfare state and the high-tax model that supports it. Even the cabinet is split. Five ministers are openly anti-euro, including the deputy prime minister, Margareta Winberg, and the industry minister, Leif Pagrotsky. Many voters feel Sweden can simply wait and see; as Mr Pagrotsky puts it, “I'm not saying a no is forever.” And Mr Persson's comment early in the campaign that a no victory would mean another referendum suggests they are right.

Yet the no side is disorganised, and it has thrown up no charismatic leader. The yeses can count on more money, the party machines and a traditionally deferential electorate. Mr Persson can still hope.

One person hoping with him is Denmark's centre-right prime minister, Anders Fogh Rasmussen. His country's voters are notoriously suspicious of the EU: they have already held two referendums on the euro. Yet they too have changed their minds on the euro - in its favour. One poll this week showed pro-euro support at 54%. Other polls in recent months have recorded 60% or more.

Why? Pollsters say that the more Danes travel on holiday around Europe and meet the euro in practice, the more they like it. Nor would a Swedish no deter them: 90% told this week's poll that that would not alter their view - and a few even said that it would make them still more pro-euro. Yet in September 2000, when Danes voted on the issue, 53% said no.

Support for the euro is broad-based. Mr Fogh Rasmussen's government rarely misses an opportunity to sing its praises. Ditto the Social Democrats and Social Liberals, the two main opposition parties. Ditto the governor of the central bank, business and trade-union leaders and the media. Organised scepticism is confined to the far-left and far-right fringes of parliament and a pair of non-parliamentary movements. So surely another referendum must end in a yes? It might not.

Two hefty obstacles stand in the way: Denmark's decade-old opt-outs from the EU's Maastricht treaty and the EU's proposed new constitution. The opt-outs let Denmark exclude itself from EU co-operation on the single currency, security and defence, justice and home affairs, and EU citizenship. They can only be reversed in a new referendum; Mr Fogh Rasmussen has promised one, knowing that most Danes would be happy to agree. But he has also promised a referendum on the EU constitution - to be precise, on a treaty accepting it - some time in 2004, after the EU's national leaders have put the finishing touches to it. Logic says hold the two referendums together. Politics does not.

Danes want to abolish the opt-outs, but this enthusiasm does not extend to a new EU constitution. To many Danish ears, that phrase smacks of an unacceptable loss of sovereignty and a leap into a federal Europe. Even some politicians previously known for their pro-EU views are worried.

Mr Fogh Rasmussen is worried too. Last week he warned voters that a rejection of the constitution would leave Denmark in a “completely confused situation”. This week, Mogens Lykketoft, leader of the Social Democrats, echoed his fears: “If we say no, we'll end up like Norway, just rubber-stamping EU decisions without having any influence on them.” But Danish voters have a history of rejecting advice. So Mr Fogh Rasmussen will probably plump for separate referendums: a first one on the constitution, a second one - maybe after the next election - on the opt-outs. Among which, the euro.