Crucial weekend for EU
It’s a critical weekend for European finance ministers who are meeting in the resort Italian town of Stresa. Not only are they closely watching the Swedish referendum on entering the eurozone, but also discussing France and its ballooning deficit.
The Swedish eurozone referendum, that only a week ago indicated a substantial ‘no’ vote, has been thrown into disarray with the murder of Foreign Minister Anna Lindh.
A Gallup poll indicated on Saturday that 43% of voters would say ‘yes’ to the euro and 42% would say ‘no’. It is the first time since April that the ‘yes’ side has seen positive figures – albeit after a wave of sympathy for the slain pro-euro foreign minister.
But in another poll for the Dagens Nyhetyer newspaper, the ‘no’ side leads with 46% of the votes compared to the ‘yes’ side’s 40%.
The conflicting figures only highlight how close Sunday’s vote is likely be. But it wasn’t always like this.
When Prime Minister Goran Persson first announced the referendum late last year, euro supporters looked certain to win.
Waning support
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The murder of Lindh has resulted |
Big business joined the government in spreading the message that a yes-vote was part of Sweden’s “European destiny”. But public support waned as economic factors and government miscalculations forced many to reconsider what their “destiny” should be.
Many Swedes do not want to see the same economic ramifications that countries like Greece encountered when it entered the eurozone. Complaints of the rising price of goods in Athens has concerned Swedes as they prepared to vote on Sunday.
High interest and inflation rates within the eurozone have not helped convert ‘no’ voters either.
As euro-scepticism snowballed, business leaders like Ericsson boss Kurt Hellstroem warned that Sweden could lose investment opportunities. He also subtly hinted that his company may even leave Sweden if it votes against the euro.
But some blame decline in support of the euro on Persson’s government. He is being accused of being too complacent for not campaigning at an early enough stage.
Franco-German blame
However, Persson can apportion some of the blame to France and Germany, two powerhouse countries who have requested special treatment due to their current economic problems.
The French government is trying to find a loophole in the Stability and Growth Pact and would submit a proposal at the weekend summit.
France faces stiff fines for repeatedly breaking EU deficit rules, but they are hoping to have the rules relaxed by promising to behave better by 2005. If permitted, France would be in breach of the pact for three years in a row.
Germany faces similar deficit problems as EU countries are not allowed to exceed the allotted 3% of their Gross Domestic Product.
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“Unfortunately, the French attitude has played a role in this vote” Bosse Ringholm, |
Smaller countries are unimpressed and see the French move as unfair and arrogant.
Austria has accused France of endangering the Euro ‘project’ and officials from the Netherlands have threatened to sue over the issue.
“We can’t think of any special circumstances for France that justify their deficit breach,” William Leliveldt, spokesman for Dutch Finance Minister Gerrit Zalm, told reporters.
At Saturday’s meeting, Swedish Finance Minister Bosse Ringholm criticised his colleagues for not being helpful in securing a victory for the euro.
He singled out France, saying they set unrealistic deficit targets, as laid down in the Stability and Growth Pact, which in turn, undermined his country’s ‘yes’ campaign.
Wrong attitude
“Unfortunately, the French attitude has played a role in this vote,” Ringholm told the Dagens Nyheter newspaper.
A ‘no’ vote on Sunday would further hurt confidence in Europe’s common currency and would most likely set back pro-euro efforts in Britain and Denmark who are also considering holding their own referendums on the issue.
However, the unknown variable of Sunday’s vote will be how much Lindh’s murder will affect the final result.