Swedish Prime Minister Goran Persson is either a desperate man prepared to say anything to stave off a humiliating political defeat, or he is telling us all something fundamental about the real purpose of the European currency, the euro.
Seven million Swedes go to the polls next month in a referendum on whether or not they should give up their traditional Swedish crown and join the euro, as the Social Democratic premier and his government recommend. Although the bulk of big business, the media, the political classes and elite opinion are in favor of joining the other 12 members of the eurozone, the latest opinion polls suggest they could lose the vote by as much as 10 percent to 12 percent.
So facing an uphill final lap of his campaign, Persson told a rally Saturday in the industrial town of Skelleftea some 600 miles north of Stockholm that Swedes should vote Yes to help counterbalance the economic supremacy of the United States.
This anti-American theme echoes another European political campaign a year ago, where German Chancellor Gerhard Schroeder came from behind to win re-election by criticizing President George W. Bush's "military adventurism" in Iraq, and swearing Germany would not back its traditional American ally. It is a pungent reflection on the state of Transatlantic relations that European politicians in trouble now seek to turn the tide by bashing Bush and American power.
"The fact that we are cooperating against currency speculators (by dealing in only one currency) does not mean that we are entering a superstate. It means that we are putting a halt to the emerging superstate, which is controlled by the multinational companies," Persson told an audience with a large component of labor union members and their families. "I am a radical, I want a counterbalance to the global capital which we lack today and for that purpose we should use and develop the EU to the best of our abilities."
Joining the euro, Persson went on, would mean lower interest rates and thus lower housing costs, cheaper mortgages and more investment in jobs. It would make for more integration and easier trade with Sweden's partners in the 15-nation European Union, cheaper travel and foreign holidays.
It is a potent message, with a lot of weight behind it. Spokesmen for the "No" vote claim they have a campaign budget of just $7.5 million -- barely one-tenth of the $70 million allegedly being spent by the "Yes" faction. And with at least 15 percent of the electors yet to make up their minds, Persson's campaign could yet sneak a win. That would leave just Denmark and Britain of the EU nations outside the eurozone; a Swedish "yes" vote could help sway opinion in both countries.
So far, the debate in Sweden has turned on conventional issues like the potential loss of national sovereignty. On joining the euro, national governments hand over the power to set interest rates and control the money supply to a non-elected board of governors of the European Central Bank whose performance has proved controversial. France, Germany and Italy, who among them account for two-thirds of the eurozone's total economic weight, are all gripped by high unemployment and low growth.
Swedes are also focusing on the implications of joining the euro, debating like the British whether it is the thin end of a wedge leading to a federal superstate and to EU-wide taxes that could jeopardize Sweden's cherished system of generous social welfare.
Like Britain's Tony Blair, Sweden's Persson says national governments and parliaments will of course retain sovereignty over taxes. The Swedish "No" campaign argues that the euro leads to a federal structure with unaccountable bureaucrats and politicians out of reach for Swedish voters setting EU taxes.
"Joint EU taxes are in the pipeline. It is only a matter of time," Per Gahrton, a European Parliament member for Sweden's anti-euro Green Party, claimed this week. "To hold together, a currency union must have quite strong centralized steering functions such as harmonized taxes, a budget and an economic government. The euro is a step toward a superstate. We'll have a central bureaucracy taking over everything."
All this sounds like a dress rehearsal for the eventual referendum campaign in Britain that Blair has promised. As Europe's second-largest economy, and the EU's dominant financial center, Britain's adhesion is likely to prove crucial not just to the euro's eventual success, but to its weight in the world's economic affairs. With Britain inside the eurozone, the euro could seriously challenge the dollar as the world's main currency, with all the risks that involves of economic competition leading to strategic rivalry.
That is why the current Swedish referendum is so important. If Persson can persuade his fellow Swedes that they should join the euro to help challenge America's economic power, then the euro will start looking to American policy-makers like a problem or even a menace. America's long support for the EU and for European integration is already visibly ending; the dollar's relationship to the euro is equally now in question.
