Sceptics warm to the euro

Danes surprised pollsters by rejecting the euro in 2000

By the BBC's Oana Lungescu in Brussels

The smooth introduction of euro notes and coins appears to be boosting enthusiasm for the currency among the political elites of the three EU countries outside the eurozone.

Sweden's Prime Minister Goeran Persson has given the clearest indication yet that a referendum on the euro will be held next year.

Mr Persson: Referendum could be held in spring 2003

And the Danish Foreign Minister, Per Stig Moeller, said Danes may also be called to a second referendum on the euro in 2003.

And in Britain, a new poll suggests that support for the euro has gone beyond 50%.

But these are still early days.

Mr Persson said a referendum on the euro could be held in spring 2003, enabling Sweden to start using the notes and coins from 2006.

Unlike Denmark and Britain, Sweden does not have an official opt-out from the euro.

Opinion shift

According to Emily von Sydow, Brussels correspondent of the Swedish daily newspaper Aftonbladet, there are political and psychological reasons why the country may eventually want to opt in.

"I've just come back from Sweden and I felt that there was a feeling that we missed a big party

Swedish journalist Emily von Sydow

"The latest opinion polls show a 55% Yes, which is stronger than the Yes vote for membership in the European Union, so I think the government feels fairly confident and also Mr Persson's situation is very strong," she says.

"The voters love him. So he's likely to win the (general) election in September and he feels confident he can gain a broad majority for this too."

A yes vote in Sweden next year would put more pressure on Denmark and Britain to hold similar referendums.

British officials have already suggested holding one later next year. And on Wednesday, Mr Moeller raised the issue in Denmark.

"We will have a new situation if those two countries vote Yes - will we then stand completely alone?", Mr Moeller asked, apparently testing the ground rather than making a concrete proposal.

Germany will be a key indicator in the success of the euro

In Denmark, the euro is a case of once bitten, twice shy. In September 2000, 53% of voters opposed it.

This week, a new poll, commissioned by the financial paper Boersen, shows that the tide may be turning, with 57% of Danes saying they would now favour adopting the euro.

But in 2000 too, most of the media and the polls were expecting a Yes.

Britain's Labour Government will also have to tread carefully. According to an NOP poll this week, 51% of Britons would be persuaded to vote Yes if the euro had strong backing from industry and government.

The Minister for Europe, Peter Hain, warned that Britain could end up isolated in an enlarged European Union if it does not adopt the euro by the end of the decade.

Left out?

Hungary and other central European countries hoping to join the EU by 2004 - which are not entitled to opt out from the euro - say they want to enter the euro-zone around 2006, if their economic permits.

The European mainstream: Swedes want to be in it

But for the Scandinavian countries, the debate doesn't seem to be primarily about economics.

"In the Danish case, we're already pegged to the euro and we've been following the interest rates of the German national bank before and now of the European Central Bank so, on that matter, it's not a major difference," said Mr Langvad.

Ms Von Sydow says the current weakness of the kroner might be an argument for joining, but that other factors carry more weight.

As she sees it, Swedish people simply do not want to feel left out of the European mainstream.

"I've just come back from Sweden and I felt that there was a feeling that we missed a big party. They have seen on TV the joy and the enthusiasm that nobody had expected in Sweden.

The European Commission does not want to be seen influencing, or interfering in, national debates.

Spokesman Jonathan Faull said it would simply continue the hard work to make the eurozone economy successful and competitive.

Testing times

All eyes will now be watching Germany, the strongest economy in the EU, which is rapidly slowing down.

Another test of the newborn currency will be the EU summit in Barcelona in March, which is intended to make the economy more flexible, by liberalising key sectors such as energy and telecommunications.

The hoped-for stimulus to growth and jobs may be crucial to the future strength of the currency.

But, with French elections planned for spring and German elections in the autumn, few are optimistic about Barcelona's results.