Stockholm, Sept. 15 (Reuters): Sweden got a clear message today that it will pay a political price for snubbing the euro by being frozen out of EU decision-making, but financial markets shrugged off the “No” vote as a welcome end to uncertainty.
The resounding 56-42 per cent “No” to the euro in yesterday’s referendum follows a rejection of the European Union single currency by the Danes in 2000 and a “not yet” from Britain.
“I profoundly regret this. I think it is bad news for Europe and bad news for Sweden,” said foreign minister Ana Palacio of euro member Spain, while the Netherlands called it “a shame”.
Swedish European commissioner Margot Wallstrom warned Swedes of the “economic and political price to pay for remaining outside”, echoing European Commission chief Romano Prodi’s reaction to the snub to the euro, used from Finland to Portugal.
Asked if Sweden would lose influence by staying outside the 12-nation euro zone along with fellow EU members Britain and Denmark, Prodi told Swedish Television: “Certainly, yes.”
Sweden is the only one of the 15 EU member states that is neither a member of the euro nor of Nato. Its “No” yesterday contrasted with a solid “Yes” to EU membership in Estonia, one of 10 countries hoping to join in 2004 and the euro soon after.
While industry spoke of lost opportunities, Sweden’s crown rallied from early falls on relief after a year’s uncertainty.
“Traders are again looking at fundamentals — the foreign trade surplus, strong public finances, higher interest rates and prospects of economic growth faster than in the euro-zone,” said Peter Kaplan, economist at ABN Amro. German Chancellor Gerhard Schroeder said “the enormous economic potential of the European market cannot be realised without the common currency”.
He hoped Sweden would come round to the euro at a later date but Prime Minister Goran Persson has ruled it out before 2013. Sweden’s “No”, fuelled by concern on the Left and among women voters especially that the euro would raise prices and cut funding for the cradle-to-grave welfare system, is a personal blow to Persson, suffering his first defeat in a national vote.