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Euro membership a distant prospect

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Euro membership a distant prospect
17:40 CEST+02:00
In September 2003 the Swedish electorate voted by a resounding majority against surrendering the krona in favour of the euro; six and half years later as the eurozone economies have been forced to underwrite a €750 million bailout of Greece, this popular opposition remains strong, and apparently at odds with the mainstream political establishment.

All the larger political parties came out in favour of Sweden's membership of the euro in 2003, but none has proposed a new referendum to parliament in the interim years. A telephone survey by The Local on Tuesday indicates that political support remains strong for Sweden to eventually join the Euro zone, although few are willing to commit to a concrete timeframe.

”We are in favour of Sweden adopting the euro, however we have also said that we should respect the outcome of the referendum in the meantime. But we want Sweden to adopt the euro eventually,” said Gustav Blix, Moderate Party substitute member of the parliamentary foreign affairs committee, to The Local on Tuesday.

”We should have another referendum, adopting the euro would be a good thing for Sweden in the long run, but we need a well functioning monetary policy in Europe and a stable eurozone,” Blix said, adding that Sweden should be prepared ”take our share of the responsibility” to help troubled EU economies, but should insist on ”high requirements” for reform.

The Social Democrats were in government when the 2003 referendum was held and led the chorus of parties and Swedish business leaders in favour of adopting the euro. While support in the party remains strong for Sweden joining the single currency, a new referendum is not an immediate priority.

“We haven't changed our minds because of Greece, but the situation reinforces the need to wait longer. It is too soon to have a referendum in the next four years. It is important to review the situation and look for a referendum in 2014,” said Sven-Erik Österberg, Social Democrat Party member of the parliamentary foreign affairs committee, to The Local on Tuesday.

Österberg pointed out that while there is unity in the centre-left coalition on their position with regards to the euro and a new referendum, the centre-right government is more split.

Left Party spokesperson Britta Kellgren, however indicated to the Local on Tuesday that the centre-left coalition may not be as unified as the Sven-Erik Österberg claims.

”We are against the euro and Sweden taking part in the euro. We believe the independence of the country and the economy would be destroyed; it is very risky and the developments of the last few weeks demonstrate that,” Kellgren told The Local.

Kellgren also rejected the idea of a new referendum on euro membership.

”There is no need for a referendum, we don't want another referendum. We had a referendum in 2003 and the Left Party was against it then,” she said.

The Green Party removed the requirement to leave the EU from its party programme in the autumn of 2008 but remains opposed to Swedish membership of the euro and a second referendum.

”Sweden should keep out of the euro and not have a referendum. We are too different and we should not have the same interest rates between countries,” said Ulf Holm, the Green Party member of the parliamentary EU advisory committee, to The Local on Tuesday.

While Holm argued that it is too early to judge the fall out of the Greek debt crisis, he advised that the Green Party has become more sceptical towards the euro than before.

”I think it is necessary to help Greece out because the crisis can affect other countries outside of Europe and it's necessary to stop that from happening,” he said.

On the issue of a second referendum, Holm stated that the centre-left coalition had agreed not to hold a referendum before the next election (in 2014).

The Liberal Party (Folkpartiet) is the party which has perhaps gone furthest to establishing its credentials as a staunch advocate of Sweden joining the euro, and the ongoing Euro zone debt crisis has done little to dent their resolve.

”We want to join the euro and we want to have a referendum in the coming years, within the next mandate period,” said Mathias Sundin, parliamentary candidate for the Liberal Party in Östergötland, to The Local on Tuesday.

Sundin emphasised that the party's line has not been affected by the Greece crisis.

”The crisis in Greece is not because of the euro, it's because of the way Greek politicians have ruined the Greek economy with short-sighted policies. Greece's membership of the euro forces it to fix the economy, if they had their own currency they wouldn't have to,” he said.

Despite the Greek problems, Sundin argued that the Liberal Party is in favour of supporting the bailout plan as ”the other option of a bankruptcy would be worse for Sweden, the EU and the world”.

The Christian Democrats amended their position during campaigning in the 2009 EU elections and in May 2009 called for a new referendum to be held within the next mandate period.

The Centre Party was the only centre-right party to align itself with the no camp in the 2003 election it has since reversed its position with leading party members in October 2008 voicing a call for the adoption of the euro after a new referendum.

The 2003 referendum, coming in the wake of the tragic murder of foreign minister Anna Lindh, attracted a 81.6 percent turnout with 55.9 percent coming down against the euro, and 42 percent in favour.

“We have got a result that is clear, very clear, and a high turnout - this means the referendum result is very easy to respect,” the then prime minister, Social Democrat Göran Persson, said in conceding defeat.

A recent survey by Demoskop shows that public opinion remains clear on the issue with 55 percent of Swedes ready to vote no if a new euro referendum were to be held today, with only 37 percent in favour. The survey, of 1,004 Swedes, was conducted in the first week of April, before the Greek debt crisis sent shock waves across global stock markets.

The survey indicates that opposition to the euro is at its highest level since 1997 (the first year Statistics Sweden (SCB) began collating data on the issue), and is almost as high as the 2003 referendum, with support considerably lower.

During the interim years there has been significant fluctuations in the position of the Swedish people however, with the November 2009 SCB survey indicating that support for the euro exceeded opposition for the first time since late 2002, after a steady climb since May 2007.

SCB statistics also indicate that since the 2003 referendum there are fewer Swedes sitting on the fence with the those replying don't know halving from almost 30 percent in 1997 to around 15 percent in November 2009.

Despite the popular opposition, and Sweden's role alongside the UK and Denmark as the only EU15 countries remaining outside of the responsibilities of eurozone membership, finance minister Anders Borg has argued that Sweden has a self-interest in backing the €750 billion bailout announced by EU finance ministers on Sunday.

“If a liquidity crisis affects the banking system, if banks have liquidity problems, it can hit exports to the point of bringing them to a standstill, and its completely impossible for an export-dependent country like Sweden to function in such a situation,” Anders Borg said while emphasising that Swedish support for the bailout would be in the form of competitive loans at market conditions.

On Tuesday Borg went a step further and called the UK's resistance to backing the plan as “unrealistic”.

"London is Europe's financial centre. If bank financing and payments no longer work, it will only take a few days before the financial markets in London are dramatically affected," he said.

The Swedish government's gesture of solidarity with its European Union partners would however appear to resonate with stable Swedish support for membership of the EU, which is consistently supported by a significant majority. According to SCB statistics from November 2009 56 percent of the electorate back membership while only 18 percent were openly opposed.

Support for the membership of the EU was not however reflected in the turnout for the 2009 European parliamentary elections which, at 43.8 percent, was low by Swedish standards, while higher than the 37.1 percent showing in the previous election in 2004.

Sweden, like the UK and unlike Denmark, holds no formal opt-out from joining the euro and must join the single currency when a series of macroeconomic criteria are met, including national debt, interest rates and exchange rate stability. In practice Sweden holds the right to decide when, and if, to join the euro by simply avoiding to meet all the criteria.

The EU greeted the 2003 Swedish referendum no with a statement that it was confident that the Swedish government would ”keep the euro project alive in Sweden”. While the responses received by The Local herein indicate that this confidence would appear to have been well placed, Sweden's adoption of the euro remains in practice, a distant prospect.

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