Monday, September 15, 2003
EURONEWS! A note from Sweden to be taken very seriously by all:
News Analysis: Behind vote, a mistrust of Germany and France John Vinocur/IHT IHT
Monday, September 15, 2003
Sweden's rejection of the European Union's common currency was a coldly rational statement of mistrust in the euro. It distanced itself from the stagnant economic performance of the euro zone, and flatly refused to place its monetary future under the sway of big countries like France and Germany, who have bent the euro's rules to suit themselves.
Coming at a moment when emotions after the murder of Foreign Minister Anna Lindh might well have pointed the electorate in the direction of the "yes" vote she favored, the "no" in the referendum Sunday proposing adoption of the euro wasn't just a slap, but a hard right, to the jaw of European monetary union.
As a country that believes in rules and reasonableness, that treasures moderation, and bases its economic life on exports and solid international relations, Sweden said, in effect, that it could do better on its own.
Despite its shock and grief over the death of its pro-euro foreign minister, Sweden restrained its emotions and said it was not joining a currency that had provided more signs of self-interested maneuvering among its strongest members than a willingness to play by the regulations they conceived themselves.
For the euro's participants, and for those outside Europe, it was an embarrassing rejection. It made euro-Europe look like no place to go for an enlightened electorate - after the Danes' and Swedes' refusals, only Britain has a referendum on its schedule - and euroland like mostly a split-level club for the noncomplying founder countries and the needy new members from the continent's east and south.
In the weeks before the vote, Prime Minister Goran Persson, a euro supporter, had said that a substantial source of opposition to joining the currency resulted from France's and Germany's unwillingness to meet the euro zone's annual deficit criteria - a reference, in France's case, to its prime minister's statement that its European obligations would always be subordinate to France's self-interest.
After Lindh's death, Finance Minister Bosse Ringholm returned to the issue and, as if stating a deep grievance, said, "We have a problem here, in particular with France." Its violation of the rules of the euro zone's national performance criteria, he said, "has been disturbing the election campaign and it has been negative for the 'yes' vote."
Obviously, Swedes often complain that their own country is obsessed and burdened with inflexible regulations and codes. But Sweden is also proud of its sense of civic duty and its acceptance of the necessity for compliance.
It was in this context that many Swedes were likely to have seen joining the euro as buying into a situation where Sweden would obey the Stability and Growth Pact rules, however economically ascetic, while countries like France or Germany were demonstrating the rules were only meant for the little folk.
The "no" forces, who stirred a strong anti-establishment wave in the country, had only to post editorial commentary from France or Germany to make their point. The current L'Express newsmagazine accuses France of anti-European demagoguery. Le Monde, pointing out that no French government had balanced a budget since 1975, said over the weekend that France had not only crashed into its own economic wall, "but as the shame of Europe to boot."
Against this, Sweden's economic circumstances outside the euro, after years of budget trimming, looked very favorable. Sweden now runs a budget surplus. Its unemployment rate is better than the euro zone average. And its projected growth rate of 1.5 percent for the year is more than double that of the EU, which the European Commission lowered to 0.5 percent from 0.7 percent a few days before the referendum.
This euro stagnancy, and the accusations by Wim Duisenberg, the outgoing president of the European Central Bank, that there is a lack of sufficient political courage in the euro zone to enforce the reforms needed to bring about a genuine surge of growth, had a particular resonance in a country that actually has its finances in order.
After all, what did the euro offer Sweden? One of the promises of the "yes" campaign was a more stable currency than what the krona offered over the last years. Yet it is no secret that a part of Sweden's economic success for years has been due to competitive devaluations of the krona against the dollar.
Without the euro, the "no" forces argued, the krona would hardly become more of a target for a speculative run. But the government and central bank would lose their capacity to adjust the currency's value in relation to trends in trade, or the dollar, or the euro.
The burden now falls back on the EU and the 12 of its members that make up its common currency. With their meager growth perspectives, and the United States' massive lead in productivity and innovation, the euro states' capacity to regain their attractiveness lies in finding the political will to bring about dramatic structural change in the group's leading economies.
This is now so obvious that Duisenberg's remarks about a failure in courage among political leaders, or similar comments by his successor, Jean-ClaudeTrichet, were met with silence.
The Swedish vote, in the eyes of the Swedish euro proponents at least, is in a real sense partly the fault of France and Germany. To assume that these two governments would take the steps needed to turn their economies into the motors of Europe, and remove the growing pall over Europe's role in the world, required a measure of trust that Sweden's cold-eyed electorate saw no good reason to grant.
International Herald Tribune
Copyright © 2003 The International Herald Tribune
News Analysis: Behind vote, a mistrust of Germany and France John Vinocur/IHT IHT
Monday, September 15, 2003
Sweden's rejection of the European Union's common currency was a coldly rational statement of mistrust in the euro. It distanced itself from the stagnant economic performance of the euro zone, and flatly refused to place its monetary future under the sway of big countries like France and Germany, who have bent the euro's rules to suit themselves.
Coming at a moment when emotions after the murder of Foreign Minister Anna Lindh might well have pointed the electorate in the direction of the "yes" vote she favored, the "no" in the referendum Sunday proposing adoption of the euro wasn't just a slap, but a hard right, to the jaw of European monetary union.
As a country that believes in rules and reasonableness, that treasures moderation, and bases its economic life on exports and solid international relations, Sweden said, in effect, that it could do better on its own.
Despite its shock and grief over the death of its pro-euro foreign minister, Sweden restrained its emotions and said it was not joining a currency that had provided more signs of self-interested maneuvering among its strongest members than a willingness to play by the regulations they conceived themselves.
For the euro's participants, and for those outside Europe, it was an embarrassing rejection. It made euro-Europe look like no place to go for an enlightened electorate - after the Danes' and Swedes' refusals, only Britain has a referendum on its schedule - and euroland like mostly a split-level club for the noncomplying founder countries and the needy new members from the continent's east and south.
In the weeks before the vote, Prime Minister Goran Persson, a euro supporter, had said that a substantial source of opposition to joining the currency resulted from France's and Germany's unwillingness to meet the euro zone's annual deficit criteria - a reference, in France's case, to its prime minister's statement that its European obligations would always be subordinate to France's self-interest.
After Lindh's death, Finance Minister Bosse Ringholm returned to the issue and, as if stating a deep grievance, said, "We have a problem here, in particular with France." Its violation of the rules of the euro zone's national performance criteria, he said, "has been disturbing the election campaign and it has been negative for the 'yes' vote."
Obviously, Swedes often complain that their own country is obsessed and burdened with inflexible regulations and codes. But Sweden is also proud of its sense of civic duty and its acceptance of the necessity for compliance.
It was in this context that many Swedes were likely to have seen joining the euro as buying into a situation where Sweden would obey the Stability and Growth Pact rules, however economically ascetic, while countries like France or Germany were demonstrating the rules were only meant for the little folk.
The "no" forces, who stirred a strong anti-establishment wave in the country, had only to post editorial commentary from France or Germany to make their point. The current L'Express newsmagazine accuses France of anti-European demagoguery. Le Monde, pointing out that no French government had balanced a budget since 1975, said over the weekend that France had not only crashed into its own economic wall, "but as the shame of Europe to boot."
Against this, Sweden's economic circumstances outside the euro, after years of budget trimming, looked very favorable. Sweden now runs a budget surplus. Its unemployment rate is better than the euro zone average. And its projected growth rate of 1.5 percent for the year is more than double that of the EU, which the European Commission lowered to 0.5 percent from 0.7 percent a few days before the referendum.
This euro stagnancy, and the accusations by Wim Duisenberg, the outgoing president of the European Central Bank, that there is a lack of sufficient political courage in the euro zone to enforce the reforms needed to bring about a genuine surge of growth, had a particular resonance in a country that actually has its finances in order.
After all, what did the euro offer Sweden? One of the promises of the "yes" campaign was a more stable currency than what the krona offered over the last years. Yet it is no secret that a part of Sweden's economic success for years has been due to competitive devaluations of the krona against the dollar.
Without the euro, the "no" forces argued, the krona would hardly become more of a target for a speculative run. But the government and central bank would lose their capacity to adjust the currency's value in relation to trends in trade, or the dollar, or the euro.
The burden now falls back on the EU and the 12 of its members that make up its common currency. With their meager growth perspectives, and the United States' massive lead in productivity and innovation, the euro states' capacity to regain their attractiveness lies in finding the political will to bring about dramatic structural change in the group's leading economies.
This is now so obvious that Duisenberg's remarks about a failure in courage among political leaders, or similar comments by his successor, Jean-ClaudeTrichet, were met with silence.
The Swedish vote, in the eyes of the Swedish euro proponents at least, is in a real sense partly the fault of France and Germany. To assume that these two governments would take the steps needed to turn their economies into the motors of Europe, and remove the growing pall over Europe's role in the world, required a measure of trust that Sweden's cold-eyed electorate saw no good reason to grant.
International Herald Tribune
Copyright © 2003 The International Herald Tribune
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