By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
As the Eurozone flails about to keep its chin above the debt crisis that is drowning periphery countries, and as the European Union struggles to duct-tape itself together with more “integration,” that is governance by unelected transnational eurocrats, Sweden is having second thoughts: never before has there been such hostility toward the euro.
Sweden is a special case. It joined the EU in 1995 after its people had graciously been allowed to express their will in a referendum in 1994—with 52.3% voting in favor. As every country that joins the EU, Sweden signed an accession treaty that obligates it to adopt the euro, but without deadline. So in 2003, the government thought time had come to make the move. It asked the people in a non-binding referendum if they wanted to accede to the Eurozone. September 14 was the day.
The people rebelled. They demolished the euro, with 55.9% voting against it and 42% for it. They didn’t want to trade in their beloved krona for the newfangled currency. They didn’t want to give up sovereignty over their monetary policy. It shook up eurocrats, member governments, finance ministers, and heads of state around the continent. And the European power structure learned a lesson: don’t let the riffraff decide; it was the last time that people in the EU had been allowed to vote on the euro.
But in Sweden, the euro is on the table twice a year via a survey by the Swedish statistical agency that asks people how they’d vote if a referendum were held “today” on joining the euro. The results of the survey conducted in November just came out. Sobering results: 82.3% would vote against joining the euro, only 9.6% would vote for it, and 8% were betwixt and between. The euro’s descent into utter unpopularity hell set a new record.
(In an amusing aside of unknown unimportance, more women than men had trouble making up their minds with 10.2% of the women straddling the fence versus 5.8% of the men.)
There was a dramatic change of mind among those who in the May survey had voted to join the euro: 52% of them switched to no, 11% switched to undecided. Disillusionment is spreading even among the euro’s erstwhile supporters. Only 37% stuck to their original yes-vote. Of the naysayers in May, however, 95% stuck to their no-votes.
Historically, the no-vote has dominated the yes-vote in Sweden. Since the survey series started in 1997, there were only three periods when the yes-crowd—if that’s the right word—outnumbered the naysayers: a blip in 1999; from May 2001 through November 2002; and then another blip in 2009 during the financial crisis when the economy went into a horrific swoon. Perhaps they thought there was strength in numbers.
But in 2010, the economy rebounded vigorously. The budget deficit diminished and by 2012 nearly disappeared. Conversations about cutting taxes were heard in polite company. Meanwhile, in the Eurozone, the debt crisis, and its evil twin, austerity, were spreading far and wide. They mangled periphery countries, squashed GDP growth in other Eurozone countries, and started to gnaw even on Germany that had considered itself above the fray. Swedish opposition to the euro skyrocketed.
Alas, Statistics Sweden also asked the people how they’d vote if a referendum were held “today” on remaining in the EU—the very issue voters had already decided by referendum in 1994.
The popularity of EU membership, after an initial rough patch, had been climbing for years and peaked, or rather plateaued, from late 2008 through 2011 with around 55% of the people voting for it. But the debt crisis with its non-solutions, its sacrifices by the lower levels of society, its convoluted undemocratic taxpayer-funded bailouts of bondholders and banks finally had an impact. The yes-votes fizzled. In the November survey, only 45% voted for membership and 26% voted against it. And it set a record: 29% couldn’t decide.
EU membership is becoming unpopular in Sweden. And the euro is despised. Not a good omen. And not only in Sweden. The ills of the euro have infected the larger community of countries and their cohesion. People have expressed their anger in massive protests. Now, the very efforts to keep the Eurozone together are tearing up the fabric of the EU: the first one out may be the UK. Read…. Sacrificing the Will of the People on the Altar of the Euro.
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Thanks for the posting.
If the UK leaves I don’t think it matters as much as if Sweden left. Sweden would create a sovereign currency and the private banking world and the global inherited rich wouldn’t like that.
It will be interesting now to watch the efforts undertaken to not let the EU public decide its monetary future.
Its also interesting to compare the wrangling in the EU about “makers and takers” between the countries and then look at how that same wrangling about the “makers and takers” is talked about (or not) in the states of the US.
In EU, the makers need the takers, one but has to look at how German trade balance changed since introducing EUR.
Say Italy used to have a trade surplus with Germany in 90s, that’s gone…
Just a note, and it might have more to dow with American cultural idioms, but the phrase, “Sacrificing the Will of the People on the Altar of the Euro,” is far less evocative to American eyes than, “You shall not crucify mankind upon a cross of gold.” (Even for a non Christian like me)
http://openeuropeblog.blogspot.se/2012/09/the-view-from-sweden-barroso-is-making.html
The more EU institutions say and do, the less they are liked by Swedes. Correlation or possibly causation?
& then we have the case of John Dalli, EU commissioner for health, who was forced to resign earlier this year because of his non-handling of a possible solicitation of a bribe. No bribe was paid out and the directive from the EU-institution came out and it was against the interests of the Swedish company who refused to pay the bribe.
Bribery do happen in Sweden and to minimise the risk of bribery and waste there is some really strong Freedom of Information legislation in Sweden. Sadly the workings in Brussels are not as transparent. Citizens arguing against monitoring are asked ‘what are you hiding?’, government bodies exempt from monitoring is apparently seen as ok.
Years ago I lived in Brussels, the main seat of the EU, and I was surprised that even there, ordinary Belgians I met were implacably hostile to the EU.
I believe Europeans have long known what this unity project is all about: A way of achieving what we have in the States — distant, nontransparent, fundamentally undemocratic government firmly controlled by capital and accountable to no one else.
Or as i like to describe it; do to Europe what Bismarck did to the German states…
This has happened in Poland as well. Where EU enthusiasm is very high (on that note you see Sweden has still twice the pepole for the EU vs against it – as it is just a brilliant idea even taking into consideration all of non-democratic processes) but EUR acceptance rates has dropped below 50% and now there are more opponents than proponents of the single currency.
Poland is in slitghly different situation as we already had the referendum on joining EU connected with accepting EURO so we already voted yes. Luckily though it has no deadline to it and our politicians seem to be rather sensible about waiting and postponing till the fog of war receedes.
Regarding trade balance and EUR impact to Germany which was mentioned here plenty of times. I think that it is difficult for the ordinary Germans to see the invisible, that is the very postive effect the relatively weak EUR, vs continuing on DM, had on them since the introdction. And the politicians there instead of explaining this ivisible effect focus on the Greece and club Med ‘moral’ faillings. This is not responsible and I think this is the basis of the criticism by former chancellor Kohl against his fellows in goverment right now. What would happen if it would be Germany, not Greece, expelled from the club. They will immediately see appraisal of new DM same as CHF but for other reasons being an export powerhouse. Their purchasing power would jump immediately and the negative trade balances with likes of Italy would comeback.
Regarding EURO as can be observed on the bond spreads between EUR countries through years prior to the crisis even the markets assumed that it is a single currency with ECB being ‘real’ Central Bank. VS what turned out to be a foregin currency for every EURO country. I think if the architecture will be in place in couple of years ahead it might be worth revisiting the notion of joining the EUR.
I’m not at all surpised.
Everyone in the UK is hugelly relieved we didn’t join the Euro. We’re in enough sh*t as it is, the only lever we have is QE.
The Swedes value their independance highly, with their history of neutrality, and they have the same sort of Lutheran outlook on runniing defecits that the Germans have.
The weakness of the Euro level leadership is the thing. Every time they seem to have taken the easy way out, only a few months or weeks after it would have been succesful. They bottled out of sending German civil servants to Greece to oversee the budgets, which was the only thing that might have cut down on Greek govt corruption. Greece is the most corrupt country in Europe, which takes some doing when you consider it shares a continent with the likes of Italy, Romania and Bulgaria.
Does Sweden have a mechanism for renouncing the EU treaty and leaving the EU if the Lords of EU try to extort Sweden into accepting the Euro as the blackmail to be paid for getting to stay in the EU?
Devolution and fragmentation are the natural consequence of failed leadership. As hegemon, the US under Obama had an opportunity to exercise leadership and coordinate strategies across trading blocs, but Obama chose instead to bail out the banks. This effectively scuttled any attempt for anyone else to go after their banking sectors. It legitimized instead an “everyman for himself” approach. So Europe went its way, then Northern Europe and Southern Europe started going their ways, then intra-national regions like Catalonia started moves to go their way. This was all predictable. I say this mostly because I remember predicting it back in 2009.
People are looking at unity and realizing that there is no upside to it. Unity or the kleptocratic simulacrum which passes for it did not save them from the current crises. It caused them. Nor does it offer a way out. So the various unities are falling apart.
Question Americans might ask themselves:
If America breaks up and collapses like the USSR did, am I living in a potential “Baltic State” or a potential “Poland”? Or am I living in a potential “Moldova” or in a potential “Ickystan”? What sort of post-America “new nation” do I want to find myself living in? If I’m not there already, maybe I’d better move there with all deliberate haste.
Another dimensions, that correlates both with the Euro/EU scepticism as well as with a growing resentment of the existing political elite in Sweden, is the emergence and strong rise of an openly nationalistic party, as seen elsewhere in Europe.
The Swedish democratic party is now trending in opinion polls as the third largest (of the 8 parties represented in the parliament), with >8-10% of the votes. They already holds balance of power, and if the current trend holds, will gain significant in power and influence.
Which makes me wonder that the politicans and EU bureaucrats may very well be able to, at least temporary, to contain the economic crisises, but in doing so they risk to literally break the political bakbone of the current system i several european countries.
Which may very well mean that any success in the former might be utterly lost in the latter.
Here you can find a translation of this article for italian readsers: Svezia: euro? No, grazie. Un’opposizione da record