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Last Updated: Friday, 5 September, 2003, 21:37 GMT 22:37 UK
Sweden thinks hard about the euro
The BBC's Jonty Bloom weighs the strengths of the Yes and No campaigns as Sweden prepares for a referendum on the euro currency on 14 September.

The royal palace in Stockholm stands impressively on a hill overlooking the city and its harbour.

It is the largest inhabited palace in the world, which puts all those patronising stories about cycling Scandinavian royals in some kind of context.

Stockholm royal palace
Some say Sweden is a eurosceptic kingdom, rather like Britain
The palace also looms over the Swedish parliament, a reminder that for all its European, liberal, welfare-state credentials Sweden is still at heart a traditional, proud and independent kingdom.

It is also - according to Professor Ulf Johnsonn, an economic historian at Stockholm University - a eurosceptic kingdom, rather like Britain.

"Historically there has been a certain mistrust of continental Europe," he says. "The popular project was the United States, one million Swedes left Sweden before World War I out of a population of four or five million.

"Most people have relations in America, and we have been increasingly open to the Anglo-Saxon culture."

Parties split

But if doubts over Europe and now the euro are widespread they just do not seem as deep or as visceral as they are in Britain.

It is not a right or left kind of issue, it is more about concerned thinking by each individual, about what would be the right thing
Joran Hagglund
No campaigner
Joran Hagglund, secretary of the Centre Party and a leading No campaigner puts that down to the fact that the referendum is not a fight between the parties but a chance for some serious thinking by the voters.

"Sweden has always, since we entered the European Union, had a kind of sceptic view about co-operation in Europe," he says, "and you can see now that this scepticism about the euro is going through all the political parties, all the trade organisations and so on.

"So it is not a right or left kind of issue, it is more about concerned thinking by each individual, about what would be the right thing."

But the real reason the referendum campaign in Sweden is not a battle between the parties is because most of them are split.

Even the government has members campaigning on both sides of the argument. But the Yes campaign has all the money, most of the political big names and the backing of captains of business.

And yet the No campaign is well ahead in the polls.

Euro difficulties

Part of the problem for the Yes campaign is that, despite all the money and resources they are throwing into the campaign, the eurozone does not look like a club you would want to join at the moment.

Hand-written announcement about pro-euro meeting
The euro's own difficulties are dogging Sweden's Yes campaign
The Swedish economy is growing faster than the eurozone's, unemployment is lower and the welfare state is more generous.

As if those problems were not difficult enough for the Yes campaign to overcome, there is also the fact that Germany and France are breaking the rules of the Stability and Growth Pact, and seem to be getting away with it.

Swedish Prime Minister Goran Persson has even gone so far as to attack France, Germany and Italy for failing to prepare properly for the introduction of the euro.

'Same interests'

But when I put it to him that this was an argument for voting No he disagreed strongly, saying Sweden was already affected by what was happening in the eurozone.

Let us co-operate - that means full membership and full participation
Prime Minister Goran Persson
"If they start borrowing too much, a deficit will occur in their economy and that will sooner or later bring inflation to the European economy and that sooner or later will also have an impact on Sweden," he said.

"So we are dependent, we are integrated and we have the same type of interests. So let us co-operate and that means full membership and full participation."

That argument does not seem to be working - the gap in the polls is narrowing but still stands at 5% or more.

The Yes campaign is pinning its hopes on a re-run of the referendum on joining the EU in 1994.

Swedish market
Pragmatism will probably be the decisive argument
Then the No campaign was ahead until the polling booths opened. They lost as the Don't Knows turned up and decided they did know after all and voted Yes.

But the gap this time is larger and the No campaign is unlikely to let its guard down.

Rather cleverly, one of its winning arguments has been pragmatism. Many No campaigners have said that if the euro proves to be a success they will change their minds and fight to take Sweden into the eurozone at a second referendum.

For a country that is split on this issue, that kind of pragmatism looks likely to be the decisive argument come next Sunday.

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