|During the campaign, proponents of the EMU had warned repeatedly that a "No" vote would result in a weaker currency (the Swedish krona) and higher interest rates, among other economic problems. But developments since the referendum have been just the opposite. The krona has become much stronger, interest rates have declined, and general economic trends are well above the average for EMU member-states. The same thing happened after the EMU was rejected by the Danish people, who had been peppered with the same warnings.
For the EU, in general, things have not gone so well. Just one week after the Swedish referendum, the official responsible for the Union's internal market reported that, "Trade within the EU is stagnant, and the trade in services is less than it was ten years ago. Foreign investment has also declined sharply and price convergence, i.e. competition within the internal market, has weakened." The opposite of this was what the Swedes were promised if they consented to joining the EMU.
In late November, the EMU stability pact (see Part I) was effectively nullified when France and Germany used their muscle to avoid the prescribed consequences of repeated violations. Having failed to keep their budget deficits under three percent for several years running, the two most powerful members of the monetary union forced through an exemption from the penalties which, according to the rules, they were required to pay.
This was not appreciated by less powerful members such as Austria and Portugal which have made heavy and unpopular cuts in public spending in order to conform with the pact's strict rules. Adding to the resentment is the fact that it was Germany which had originally insisted on the stability pact in order to impose a necessary discipline that was felt to be lacking in other member-states.
But for those who have been critical of the EMU's inflexibility, the collapse was entirely predictable. U.S. financier George Soros, for example, confided in 1996 that, "I am concerned. In order to implement the common currency, a monetary system has been constructed which is entirely too rigid. This creates a dangerous situation." Disaster could be avoided, noted Soros. "But that would require the German and French governments to ignore the Maastrich criteria [including the stability pact]. In order to have full effect, they should act together."
They have now done so, and many observers appear to be neither surprised nor disappointed. "When rules clash with reality, reality normally wins," was the reaction of Jack Straw, the United Kingdom's Foreign Minister.
This losing encounter with reality, just four years after the launch of the EMU, has inevitably raised questions about the project's viability. Ultimately, the future of entire European Union is at stake, since the monetary union is regarded as one of the EU's central components. The fiasco has already complicated negotiations over the proposed EU constitution which, in its present form, shifts even greater power to larger countries such as France and Germany (see below).
Business as usual
Meanwhile, it is business as usual in Sweden, where it is difficult to detect any visible traces of the establishment's crushing defeat in the September referendum. The principal lesson that Prime Minister Persson seems to have learned is to avoid referendums in the future, and he has declared that there will be none in connection with the proposed EU constitution-- which, among other things, stipulatesthat the euro shall be the one and only currency. This raises the
That is something for the people's elected representatives in the Riksdag to decide, asserts the prime minister. The problem is that they are not at all representative with regard to the European Union, as the EMU referendum clearly demonstrated: In striking contrast to their constituents, roughly 75 percent of Riksdag members voted in favour. This democratic anomaly-- elected representatives who, on matters relating to the EU, consistently vote against the will of the people they are supposed to represent-- can be observed in virtually all member-states.
There appear to be two main reasons for this syndrome. One is that EU-related issues have yet to be incorporated into national election campaigns. In fact, Prime Minister Persson and his allies have successfully managed to exclude such issues, for reasons that are fairly obvious: Bringing up the European Union would almost certainly result in election losses and even greater opposition to the EU.
Riksdag campaigns tend to focus, instead, on such traditional issues as jobs, taxes, education, social services, etc. No one, least of all Göran Persson, conveys a message which in essence says, "Vote for our party so that we can surrender more powers to the EU." But that is what the prime minister wants to do with the proposed constitution, and it is a procedure that has been applied before (see for example, "National Sovereignty").
The other reason for the lack of representative democracy in the Riksdag is that the four pro-EMU parties, with roughly eighty percent of the seats, are controlled by leaders who are committed to expanding the scope and power of the European Union, no matter what their constituents might think. The greatest discrepancy is in the Social Democratic Party (SDP), with over forty percent of Riksdag seats. A large majority of them are occupied by party loyalists who do not dare or care to challenge the leadership position on the EU. At least half of the SDP's regular voters, on the other hand, have always been sceptical or critical; in the September referendum, 53 percent voted against, and only 45 percent for the EMU-- hardly a vote of confidence in the leadership's policy.
Göran Persson's main strategy for dealing with the division within his party has been to conduct a quiet purge of EU sceptics. It appears that fewer and fewer of them are being employed within the party apparatus or nominated to the Riksdag. That pattern has continued, despite the unmistakable message of the September referendum. The recently approved list of SDP candidates for next year's election to the EU parliament does not include a single EMU opponent or EU sceptic in an electable position. Accordingly, the gulf between SDP voters and their elected "representatives" is more likely to widen than to narrow.
For that and other reasons, it may prove very difficult for the prime minister to avoid a referendum on the EU constitution. Several other member-states, including Denmark and The Netherlands, have already indicated that they will put the question to their citizens, and the Swedish Green Party has initiated a petition campaign in favour of a referendum.
At this point, the contents of the constitution are still being negotiated. The first draft emerged from a convention that was dominated by Christian Democrats and right-wing Social Democrats (i.e. the sort that currently govern Sweden). Those interests have presented the resulting document as a mere consolidation of existing treaties, with minor adjustments whose purpose is to streamline the EU's decision-making process-- all the more necessary with the addition next year of ten new member-states.
But critics contend that vital interests have been ignored, and that the draft document prescribes a giant step toward transformation of the EU into a superstate; its provisions call for a large additional loss of national sovereignty, a common foreign policy, a major shift of power from smaller to larger member-states, and all the trappings of a nation-state.
On those rare occasions in the past when citizens of EU member-states have been allowed to vote on major issues like the EMU, but have misunderstood their function and voted "wrong"-- i.e. against the wishes of the establishment-- the solution has been to make them vote again until they come up with the right answer.
This is a one-way process: If the Swedes had voted in favour of joining the EMU, they would never be given the opportunity to change their minds and withdraw their approval. But now that they have gone and voted "No", the normal procedure would be to wait a suitable period, in the meantime applying the carrot and the stick in new combinations, and then hold another referendum in expectation of a satisfactory outcome. An important aspect of this procedure is to reduce the turnout of oppositional voters by discouraging the least motivated. The message is, "No matter what happens, we are going to get our way in the end."
Prime Minister Persson said as much in the early stages of the EMU campaign: "Sweden cannot live with a 'No' to EMU. In that case, I am pretty sure there will have to be a new decision. We will just have to come back and discuss the issue with the Swedish people."
There was no mistaking the import of that message. "It seems that he wants to have the lowest possible voter turnout," noted Peter Eriksson of the Green Party, which supports the government in the Riksdag but opposed the EMU. "What he is saying is that, whatever the outcome of the referendum, we are going to join the EMU, anyway."
For the time being, however, the likelihood of another referendum on the EMU is fairly remote, for at least two reasons. One is the overwhelming nature of the defeat in September. A margin of 14 percent is unprecedented in such contexts, and it appears to be getting wider. Opinion polls indicate that opposition to the EMU has increased to nearly sixty percent since the referendum. This is the opposite of what happened in 1994, when there was a slight majority in favour of EU membership for only a few days before and after the referendum.
The other reason that a referendum rerun is unlikely in the near future is that the EMU is undergoing a serious crisis (see above). If, when and how that is resolved is currently open to speculation.
But if the EMU does survive, the rulers of the EU and Sweden will presumably bide their time until conditions are favourable for a fresh attempt. A severe economic crisis might do the trick, and there is a clear precedent: Sweden's membership in the EU is due largely to the panic generated during the economic crisis of the 1990s (see "The Politics of Self-Delusion").
Such a crisis might conceivably be caused by the problems of the EMU, since Germany is Sweden's second largest export market and five other EMU members are among the top ten. If things get bad enough for them, the impact on the Swedish economy could be quite severe.
It may seem far-fetched to suggest that Prime Minister Persson and his allies might use a crisis generated by the EMU to frighten their fellow citizens into joining it. But as both the 1994 and the recent referendums have demonstrated, EU evangelists are prepared to say and do just about anything to prod and coax their people into the promised land. Their blind enthusiasm, self-righteous certitude and astonishingly flimsy arguments suggest more the character of a fundamentalist religion or a mass psychosis than a well-considered political project.
Precisely what this pattern of thought and behaviour may depend on is a question of no little importance and deserves a thorough investigation. One possible clue to the dynamics involved is that national leaders frequently exhibit a much stronger affinity with their colleagues in the European Union than with their own people.
This phenomenon may be illustrated by the behaviour of Denmark's Social Democratic prime minister, who wept publicly in despair and frustration when it became clear that his countrymen had rejected the EMU for the second time. The following day, his finance minister also burst into tears at a meeting with her EU colleagues, because she had been so looking forward to officially announcing a victory. Instead, she had to be consoled by her EU colleagues.
"When I saw that on TV," recalls Drude Dahlerup, a leader of the successful anti-EMU campaign, "I thought: Who does she represent, anyway? Here, we could witness a significant shift in loyalty. We can see the same thing in the work with the new constitution. The political elite is not able to resist the pressure. It says 'Yes' to just about everything, even if the result is a major step toward transforming the EU into a nation-state.
"Representatives of the 'Yes' side often say that we have to sit at the table in order not to lose power. I have long contemplated what they mean by that, and have reached the conclusion that it has a purely personal meaning for them. They enjoy sitting there and making laws for all of Europe, without anyone being able to hold them responsible. Their solidarity is directed to their chums in the EU. Of course, it is a good thing for Europe's politicians to get on well with each other, but not if they regard the people as a problem."
First class/second class
The rejection of the EMU by the Swedish people has yet to cause any public tears-- the Swedes are notoriously reserved, especially in comparison with the Danes-- but the same basic attitude is quite apparent (see "Bitter Reaction" in Part III).
That attitude is especially evident in the refusal of Prime Minister Persson to accommodate the persistently strong EU scepticism among the voters who elected him to office. "I hope that there is a serious reconsideration," was the post-referendum appeal of Sören Wibe, an economics professor and Riksdag member who was the leading Social Democrat against the EMU. "I hope that we who are critical are no longer made to feel like second-class Social Democrats. An awful lot of people feel they have been treated unfairly. . . . The party must now modify its EU policy. This situation cannot continue. For decades, there has been a chasm between political leaders and the people on matters related to our most fundamental laws."
As previously noted, however, there has been no indication of any willingness on the part of the party leadership to change its ways. Sören Wibe and like-minded critics have been dismissed as troublemakers who threaten to split the party-- which is, of course, already divided due to the behaviour of the leadership-- and they continue to be excluded from a party apparatus which is firmly in the grip of Göran Persson and his underlings. As though to underscore their distance from the people, they chose to conduct a post-referendum review in the luxurious surroundings of a vineyard in southern France.
That symbolically apt gesture prompted the following rebuke by a columnist in Aftonbladet, a daily newspaper affiliated with the SPD and the labour movement: "The Social Democratic leadership has levitated from the surface of the earth. A more inappropriate place to discuss the EMU fiasco than a vineyard in Provence would be difficult to find. . . . Why not, instead, go to Högbo Hotel in Sandviken, a community dominated by the manufacturing industry? There, 48 percent voted for the SDP in the latest national election, but 67.5 percent voted 'No' in the EMU referendum.
"The SDP's official name is the Social Democratic Workers' Party. But the leadership travels first class, like the rest of the establishment. If a referendum fiasco is to be discussed, it's off to a vineyard in sunny France-- not to surroundings that might provide a clue as to why things went they way they did."
The widening gap between the political elite and the general public parallels a similar process that has long been evident throughout the European Union. For years, EU leaders have been repeating the litany that it is necessary to preserve national sovereignty and to make the organization more democratic, open, and responsive to the people. Yet, virtually every major EU initiative has had precisely the opposite effect; the draft constitution is a case in point. The result has been growing a alienation among ordinary citizens which is reflected in opinion surveys and steadily declining participation in EU elections.
This suggests that there is a fundamental conflict between the underlying objectives of the EU, which are seldom explicitly stated, and the perceived interests of national populations. Ever since the EU first began to take shape after World War II, it has always been strongly influenced by interests whose ultimate purpose is to unify Europe into a cohesive whole. Since the end of the Cold War, that purpose has been strengthened by the arrogant behaviour and constantly expanding power of the United States. The need to confront that threat has become a standard theme of those who advocate a stronger and "more efficient" European Union.
Accordingly, the basic issue is not whether to join the EMU or to approve the EU constitution (whatever that turns out to be). Those are merely components of a more fundamental issue-- whether to surrender what remains of national sovereignty in order to form a more perfect and more powerful European Union.
That in turn raises a number of questions, including: Do existing nations have more to gain than lose by completely subordinating themselves to the EU and, if so, what exactly does that gain consist of? What are the risks and the chances of success associated with a challenge to the power of the United States? Why not, instead, join forces with the vast majority of the world's population and concentrate on strengthening the United Nations? If a regional association of nation-states is desirable, why not start with the other Nordic countries, whose societies and economic structures are more compatible than those of the EMU?
These and related questions imply the need for an open dialogue between leaders and the led which has yet to take place.