EDITORIAL

Sweden's 'No' to Euro

Coming as a severe blow to Swedish Prime Minister Goeran Persson, the Swedes' loud and clear "No" to the Euro on Sunday, the majority of voters must have heaved a sigh of relief from distancing of the prospect of their country becoming the 13th member of the Euro zone. Their urge not to ditch the Crown for the lure of Euro, eventually proved too resolute to be swayed by sympathy over the ghastly murder of pro-euro Foreign Minister Anna Lindh, an enthusiastic Euro advocate, who died only three days earlier after being stabbed in a Stockholm department store. The Election Authority said opponents of Sweden switching over to Euro had 56 per cent of the vote to 42 per cent for its supporters. With only two per cent voters remaining neutral it was a clear verdict in favour of the Crown and convincingly against the single currency idea. What added weight to the enthusiasm for adhering to Crown, although not quite well pronounced, is being largely attributed to fears that the switchover could lead to abrupt price rises, drop in funding for the welfare state, besides threatening loss of control over Sweden's relatively robust economy. It, indeed, was a hotly contested issue as Swedes turned out in large numbers to decide on the introduction of the Euro in the referendum As a sequel to the peoples verdict, Sweden will stay with Britain and with Denmark - which had also voted "No" to the Euro in 2000 - in the European Union, but remaining outside the Euro zone.
However, contrary to the expectations of financial markets, which had pinned hope on "Yes" verdict, "Nos" carried the day. It is, however, just another matter that the Swedish crown fell on the result though in very thin trading, following the death of Foreign Minister Anna Lindh. As to the impact of the result of the Swede referendum on Euro, it is unlikely to have made any adverse impact of its strength. For there are already a number of other non-Euro countries co-existing with the Euro-tagged ones in the European Union, without making much of a difference for the worse to its economy. This will be seen as being so because the birth of Euro itself can be attributed to the increasing need of re-aligning, in a way, the world's currency, particularly because of the too long destabilizing effect of over-valued dollar on most of the other currency. And as the dollar's status as the most sought of currency had continued hurting other economy, a balancing effort had become long over due. That no serious and properly conceived effort could be made in that direction, due to the International Monetary Fund, understandably, looking the other way.
Coming in the midst of growing dismay of emerging surplus foreign exchange earning countries, from export of low priced products, like Japan, the popping up of Euro could be viewed as marking the beginning of the long elusive re-alignment of the world currencies. Probably, it was not intended that way, but as the thrust of regional economic cooperation started manifesting itself in a number of ways, it became the need of slow and gradual integration of European economies, leading to the emergence of the European Union as a political-cum-economic entity. Needless to point out that catering to an objective need of Europe, without any compulsion on EU member states, Euro has continue to add strength to Euro. And the trend it has set in motion will, undoubtedly, lead to similar other regional currencies emerging on the horizon of a fast changing world. From all indications, the European nations, including Sweden, as now clinging to their own currencies, may deem it expedient, sooner or later for Euro.