The Telegraph
Since 1st March, 1999
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Apart from the assassination of the former prime minster, Olof Palme, by a lone loony in 1986 as he walked home from a movie with his wife, politics in Sweden is rarely passionate, let alone violent. The knife attack on Wednesday that killed Anna Lindh, the foreign minister, was therefore deeply shocking for Swedes, but it may also be a measure of how upset many of them are at having to choose between their own historic currency and the euro.

Nobody yet knows if Lindh was killed because of her pro-euro position, but it seems likely: she had such a high profile in the campaign that one newspaper dubbed her the “Yes Queen”. Much bigger countries like Germany, France and Italy gave up their own historic currencies without a murmur when the euro was launched 20 months ago, and didn’t even bother with a referendum. But Sweden is different.

Potential “yes” voters have been told that adopting the euro would destroy Sweden’s ability to choose its own economic policy, and that the result would be the loss of the country’s cherished social welfare system. To many Swedes, that would be tantamount to losing their national identity,so the argument has been bitter from the start. (Hostility to the euro comes mostly from the left in Sweden, whereas it is mainly on the nationalist right in Britain and Denmark, the other two European Union members that have kept their own currencies.)

No win

Prospective “no” voters were threatened with a different kind of disaster: if Sweden doesn’t join the euro, it will become Europe’s odd man out. Twelve of the 15 existing EU members already use the common currency, and most of the 10 new members due to join next year will adopt the euro as soon as possible.

Most of Sweden’s industrial giants backed this version of events, but despite all the money lavished on the “yes” campaign, the Swedes weren’t buying it. In late August, the “no” supporters were 15 percentage points ahead, and the last opinion polls on Wednesday showed “no” still winning by 48 per cent to 39 per cent. The pro-euro forces had been hoping that it would end like Sweden’s referendum on joining the EU in 1994, when the “yes” came from behind to win 53 per cent-47 per cent, but there was no way that such a huge gap could close by the weekend: Sweden was going to reject the euro. Why'

Because economists and market analysts normally do most of the talking about money, the euro is usually treated as a financial and monetary phenomenon. In reality it is much more an historical and psychological issue — and Sweden’s history and psychology are both quite different from most other places in the EU.

To turn the tide

For the richer EU countries, the common currency is mainly a way of ensuring that Europe never slides back into the disastrous internecine wars of the past — but Sweden, geographically isolated and neutral by conviction, has sat out all of Europe’s wars since 1815. For the poorer EUmembers, adopting the euro is also a kind of sympathetic magic: if we use the rich people’s currency, then we will get rich quicker too. But Sweden is not poor, and, despite its separate currency, it has enjoyed a higher growth rate and lower unemployment in recent years than any big EU member except Britain — which has also kept its own currency.

With only nine million people and not much in the way of natural resources, the Swedes have managed to turn themselves into one of the world’s most prosperous and civilized countries, and they are a bit smug about it. Unlike Switzerland, which enjoys equal prosperity on an equally improbable base, they have deigned to join the EU, but it was a close-run thing in 1994, and on the euro it wasn’t going to happen at all. Until now.

The suspicion in many Swedish minds that Anna Lindh was killed because of her support for the euro could even create enough revulsion against the “no” campaign to swing a narrow victory for the “yes” — but it would always be a tainted “yes”. There can be no good outcome now.

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