Sweden says no to the euro

The murder of Ms Anna Lindh has made little or no difference to the outcome of Sweden's referendum on the euro

The murder of Ms Anna Lindh has made little or no difference to the outcome of Sweden's referendum on the euro. Last night's counts indicated that the proposal to join the single European currency has been rejected by a decisive margin.

This result is in line with the trend of public opinion before the murder of the euro's leading advocate in the campaign. It is a tribute to Swedish democracy in extreme adversity, and must be fully respected there and in the rest of the European Union. It will nevertheless have definite and regrettable consequences, whose lessons must be absorbed in coming months and years.

Most Swedes have remained unconvinced about the merits of joining the euro since the prime minister, Mr Göran Persson, launched the referendum campaign last spring. He argued it was essential if Sweden's international competitiveness and political influence on its economic policy are to be maintained. It is better to be at the policy-making table than to be obliged to accept its decisions, he stated, with arguments that have been well-rehearsed elsewhere in the EU and in several major policy domains. He insisted, with Ms Lindh, that this would best ensure real sovereignty over the country's social protection system, a core value for their Social Democrat party.

Their campaign failed to rally the majority within the party and its supporters. Deep divisions between political, economic and social elites favouring the euro and popular views emerged. They were found between town and country, the north and south, and between more enthusiastic men and more sceptical women. Some of this expresses abiding features of Sweden's political culture, which it shares with several other EU member-states, in which democracy is closely associated with national sovereignty.

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Others have to do with how the euro zone's economies have been managed during the current downturn, as controversy about French, German and Italian breaches of the Stability and Growth Pact overlapped with the Swedish referendum campaign. This gave many voters the impression that the larger states can write the rules to suit themselves and reinforced their belief that Sweden's relative prosperity is better protected from outside the zone. Given such a decisive result, on a high turnout in extraordinary circumstances, it is difficult indeed to see the issue being reopened soon. That will affect opinion in Denmark, where political leaders might have been tempted by a Swedish "yes" to hold another euro referendum, and in Britain, where it is difficult to imagine one being held before the next election after this result.

The single currency has been successfully introduced and is functioning well as a key player in the international economy. Its design and optimal policy framework must be subject to continuing review, balanced against the need to ensure its stability and credibility. These aspects need to be re-examined in the light of the current economic downturn, to ensure that growth as well as stability have parity as objectives. The lesson from Sweden is that large states in economic difficulties cannot assume they can manipulate agreed and equitable rules at will.