- The Washington Times - Saturday, August 30, 2003

STOCKHOLM — Sweden has always thought of itself as being ahead of the curve — more egalitarian, less hung-up about sex, more respectful of women, untouched by war, a land as safe and solid and streamlined as a Volvo station wagon.

In fact, so ingrained is this certainty that it’s giving the government a major headache.

That’s because Sweden faces a fateful decision Sept. 14. A referendum will decide whether Sweden adopts the euro, the common currency of the 15-nation European Union.

Opponents say Sweden, like Britain and Denmark, is better off staying out. Joining the euro, they say, is another step toward a European superstate that will tie Sweden’s hands in setting tax rates and maintaining its generous welfare system.

The government maintains that by snubbing the euro the nation of 9 million risks becoming a marginal force in the new, borderless European giant.

Right now the “Ja” vote trails the “Nej”-sayers by 10 to 15 percentage points in the polls, and Prime Minister Goeran Persson and his Social Democratic party will have to campaign hard to close the gap.

But they find themselves in an odd spot: They have to play down a recent economic trend showing better growth and unemployment figures in Sweden than the EU average while gently pointing out to the voters that “the Swedish model” isn’t what it used to be.

Though welfare benefits remain high, the days have gone when Sweden’s tax-funded schools, hospitals and social services were the envy of neighbors struggling to recover from two world wars. What was once unique to Sweden is now the norm in many European countries.

Until the 1980s, Sweden was among the top four in per capita purchasing power among the 15 countries that now make up the EU. It then fell to No. 11, ahead only of Britain, Spain, Portugal and Greece, according to official EU statistics.

“I think there’s a notion left from the 1970s that Sweden has a much better welfare system,” said Stefan Foelster, chief economist at the Confederation of Swedish Enterprise, which represents employers and backs joining the euro.

“In reality, health care and schools are worse than in Central European countries like Germany, France, the Netherlands and Belgium.”

Sweden’s growth is only marginally better than that in the euro-zone, he noted, and the unemployment numbers are less impressive when you add the 800,000 people — a whopping one-sixth of all workers — on government-paid sick leave or early retirement.

What’s left of “the Swedish model” is the EU’s lowest infant mortality rate, the longest male life expectancy, and the world’s highest proportion of women in parliament: 46 percent.

“From a woman’s perspective, Sweden is miles ahead of Europe,” said Maj-Britt Theorin, a leading euro opponent. She believes swapping the Swedish krona for the euro is the first step toward a common EU tax policy and the end of such benefits as 480 days parental leave that have allowed women to combine work and family life.

“The progress that we’ve achieved in the last 30 years will be lost,” Ms. Theorin said.

Mr. Persson insists Sweden’s voice must be heard in Europe.

“Of course we cannot always have it our way,” the prime minister said in an Aug. 3 speech. “But we have a good reputation. They listen to us when we have good arguments.”

But his own Social Democrats, the party that molded the Swedish welfare state through the 20th century, is divided on the issue right up to Rosenbad, the waterfront seat of government in the capital, Stockholm.

Five Cabinet ministers have come out of the “no” closet, though they have agreed not to campaign against the euro in order to avoid splitting the party and government.

The discord has already damaged the pro-euro campaign, says former conservative Prime Minister Carl Bildt, who accuses the Social Democrats of fostering anti-European sentiment in Sweden.

“The superiority of the Swedish welfare state is a myth,” said Mr. Bildt. “A quarter-century ago we were one of the world’s richest countries. Now we’re a middle-income country in Europe. We’re only ahead of a few Mediterranean countries.”

Yet many Swedes are convinced things are inferior “paa kontinenten” — on the continent.

Switching to the euro would mean ditching the krona, with its bank notes honoring such greats as the 18th-century botanist Carl Linnaeus and soprano Jenny Lind, the 19th-century “Swedish nightingale.”

The fear of diminished Swedish sovereignty is confined to small far-right groups, while most euro-resistance comes from the left, defending the cradle-to-grave welfare system.

“I’m going to vote no,” said Ronny Eriksson, 50, a standup comedian in Piteaa, 80 miles south of the Arctic Circle. “I want a society in which we together own and pay for our fundamental goods. They’re not interested in that in the European Monetary Union.”

Sweden’s anti-European reflex can be traced back to 1961, when Social Democratic Prime Minister Tage Erlander said no to the nascent European bloc. The rest of the world should follow Sweden, not the other way round, he said.

The image of an economically and socially superior Sweden has persisted, especially on the left, with the same tenacity as the myth of Swedes being suicidal. (In fact, according to the World Health Organization, Sweden’s suicide rate is comparable to that in the United States, and well below those of several European countries.)

Sweden finally joined the EU in 1995 with Finland and Austria.

Pro-euro sentiment surged temporarily after Sweden held the rotating EU presidency in 2001, and again when euro coins and notes were introduced in 12 EU countries Jan. 1, 2002, with much less disruption than expected.

It’s been downhill since, accelerated by economic trouble in the euro-zone.

“Ever since economic growth stopped in Germany, among others, the economic arguments for the euro have lost strength,” said polling analyst Toivo Sjoeren.

However, Mr. Sjoeren said he wouldn’t bet on either side just yet. In the 1994 referendum on joining the EU, opponents held the lead until the last week of campaigning. They lost.

Euro-backers say the risks are outweighed by the benefits, especially for exporters who will no longer have to wrestle with fluctuating exchange rates.

A “funny currency” like the krona makes it hard for a country on the northern fringe of Europe to attract companies, said Cees van Lede, chief executive of Dutch chemicals and pharmaceuticals company Akzo Nobel.

“It’s as if you were to go to the United States and put your head office in Haiti and use the Haiti currency,” he said. “People would say you’re out of your mind.”

(Editor’s note: The euro is the currency of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. European Union members that have stayed out are Britain, Denmark and Sweden.)

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