Sweden says No to the euro

SWEDEN decisively rejected joining the euro last night. In a historic referendum, the No camp won 56.2% and the Yes campaign just 41.8%.

The result is a devastating setback to Prime Minister Tony Blair's dream of leading Britain into the single currency.

Downing Street had hoped that if British voters saw the last countries in the European Union join - Denmark is the only other non-member - it would increase the belief that membership is inevitable.

Now the chance of a UK referendum before the next General Election looks extremely remote, even though the Government plans to reassess its five economic tests for membership next year.

Swedes went to the polls in sombre mood after the murder last week of Foreign Minister Anna Lindh, a star performer in the Yes campaign. But the predicted sympathy vote for her side never materialised.

Swedish premier Goran Persson admitted the poll had been a huge victory for Euro-sceptics. He said: 'This reveals profound scepticism of the EU project. There are huge economic problems in the eurozone and persuading people of the benefits of the euro isn't easy.'

The future of Persson, who told his country it must dump the Swedish crown, or krona, or become a second-class European nation, is now in doubt.

Dengt Westerberg, a former leader of the pro-euro Liberal party, said: 'I'm not surprised. There's huge resistance to Europe. The Yes side has all the money and owns all the newspapers but still hasn't been able to win.'

Leading No campaigner Gustav Fridolin said: 'We won against all the odds. Money can't beat ideas and principles. Now we are going to challenge the whole structure of the European Union.'

The demand for a greater say in European affairs echoes the Daily Mail's referendum in Britain in June. That vote gave 1.7m people the chance to have their voices heard on the proposed EU constitution - and 90% demanded a say on whether Britain signs up to it.

The Swedish result, mirroring Denmark's No vote in a 2000 referendum, was hailed by British opponents of the euro as demolishing claims that Britain would be isolated if it stayed outside.

Tory spokesman Michael Ancram said: 'In the face of all the arguments that the euro is inevitable and that only the British have doubts, this result shows the extent of doubt that exists in Sweden and is increasingly reflected in other parts of Europe. It strengthens our view that to oppose the euro for the UK is right.'

A spokesman for Britain's No campaign, a coalition of business leaders and politicians, said: 'This result is a warning to Tony Blair that he will have huge problems winning a referendum. People in Sweden can already see the huge problems the euro has caused for countries locked into the single currency and they have decided they will not hand over any more control.'

Labour backbencher Chris Bryant, chairman of the Labour Movement for Europe, said: 'Obviously I would have preferred it if Sweden had voted Yes. But Sweden is Sweden and Britain is Britain and we have a very different economy.'

The final stages of the campaign had been overshadowed by the murder of mother of two Mrs Lindh, 46, in a knife attack as she shopped at a Stockholm department store last Wednesday.

The tragedy produced a sharp jump in opinion poll ratings for the Yes campaign. Euro supporters had been trailing by more than 10% for months but a poll on Saturday gave them a shock 1% lead.

When it came to voting, however, fears about the economic and political consequences of joining the euro proved more pressing for many Swedes.

The turnout of 81.2% was around the normal level for Parliamentary elections. Some 2% of voters returned blank ballot papers.

There was relief that a sympathy vote had not swung the election towards the Yes campaign. Opposition politician Gudar Schyman said: 'If the Yes campaign had won then the legitimacy of the vote would have been in doubt.'

Swedish commentators pointed to the fact that their economy - like Britain's - has consistently outperformed the 12 countries who use the euro, including traditional powerhouses such as Germany and France.

Professor Ulf Johnsonn of Stockholm University said the Eurosceptic tradition was as strong among Sweden's nine million people as it was in Britain.

'Historically there has been a mistrust of continental Europe,' he said. The Swedes, who joined the EU in 1995, also value their expensive welfare system, and mistrust the ability of Brussels bureaucrats to manage it.

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