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.