Swedish voters gave a decisive No to the euro yesterday evening, despite a late surge in support for the government's Yes campaign after last week's killing of the Foreign Minister, Ms Anna Lindh.
The Swedish Prime Minister, Mr Göran Persson, accepted defeat less than two hours after polls closed last night and said the result showed Sweden's "deep scepticism to the whole project of European Monetary Union.
"We had a very clear result and a high turnout, that makes the result very easy to respect," he said. "I had hoped for something else but it will be our duty to take care of Swedish interests."
Preliminary results showed that 56 per cent of voters rejected the referendum proposal to abandon the krona after 131 years and adopt the euro. Around 42 per cent of the electorate voted Yes, a drop from the last opinion polls conducted after the death of Ms Lindh. Mr Persson paid tribute to Ms Lindh, the face of the government's Yes campaign, who was stabbed by an unidentified man in a department store in central Stockholm last Wednesday and died hours later in hospital.
"Of course her passing is something that is preoccupying me ... my perspective was changed by that," said Mr Persson. Swedish voters rejected the euro even though nearly all leading figures of Swedish political, business and cultural life were in favour of adopting the single currency.
Cheers went around the Blue Bar restaurant in central Stockholm, centre of the No campaign party, as the first results showed they had taken on the Swedish establishment and won. Only two political parties, the Left Party and the Green Party, campaigned to keep the krona.
"This shows that democracy is built from below, not from the top," said Ms Ulla Hoffman, leader of the Left Party. "This is the people's way of saying that they want democracy."
The government-backed Yes campaign was well organised and well funded but euro opponents ran a highly effective campaign, saying the euro would erode Swedish autonomy and threaten the country's welfare state.
Sweden enjoys higher growth and lower unemployment than the euro zone, and Mr Persson admitted last night that it was not an "opportune time" to convince Swedish voters of the benefits of adopting the euro.
The No side reinforced that message with a highly emotive poster campaign. "Harvest time for jobs," was the slogan of one poster where the Grim Reaper carried a sickle with a blade in the shape of the euro symbol. Other posters showed sinister pictures of the board of governors of the European Central Bank (ECB).
Mr Wim Duisenberg, the outgoing president of the ECB, said he had "taken note" of the result but said it would not affect the central bank's policies.
European Commission President Romano Prodi predicted Sweden would lose influence in the EU after yesterday's vote.
Conservative politicians in Sweden, who also called for a Yes vote, said the result showed a gap between the electorate and politicians. "The European Union is not deeply anchored in Swedish hearts. Politicians are not explaining enough about why it is good to be in the EU," said Mr Alf Svensson, leader of the opposition Christian Democrats.
Mr Lars Leijonborg, the leader of the Liberal Party, asked: "Why are Swedes so sceptical to Europe?" Opinion polls in the last days were contradictory, making the final result too close to call. But most polls had shown that a sympathy vote for Ms Lindh had narrowed the No campaign's lead to a few points.
The passionate and bitterly fought referendum campaign was ended early following Ms Lindh's death. Mr Persson urged voters to come out in large numbers to show that Sweden rejected violence and embraced democracy.
Swedish voters answered his call, encouraged by good weather, and turnout was around 70 per cent, according to early estimates.
Yesterday's referendum was consultative and not binding but the decisive result means Sweden is likely to remain out of the euro zone for at least another decade.
The No vote is likely to strengthen anti-euro sentiment in Denmark and the UK, the other two EU members outside the euro zone.
'Lindh effect' fails to sway euro sceptics: page 8