Europe's leaders warned Sweden yesterday that it will be the loser from its referendum snub to the euro, as the vote ended hopes of bringing all EU countries into the single currency in the near future.
The unexpectedly large Swedish "no" underlined the gap between the EU and many of its citizens, and suggests that Sweden, Denmark and Britain will now remain outside the eurozone for many years.
In the aftermath of the Swedish rebuff, diplomats are also alarmed at the prospect of similar "no" votes when a European constitution, due to be finalised within a few months, is put to plebiscites in several countries.
Reacting to events in Sweden, Europe's leaders expressed regret and irritation, arguing that the 9 million-strong Scandinavian nation would sacrifice influence in decision making. Ana Palacio, Spain's Foreign Minister, said: "I profoundly regret this. I think it is bad news for Europe and bad news for Sweden."
Margot Wallstrom, the Swedish European commissioner, warned her country of the "economic and political price to pay for remaining outside", echoing comments from Romano Prodi, the European Commission president, who spoke of Sweden's likely loss of influence.
Financial markets had largely written off the "no" vote, and the European Commission spokesman Reijo Kemppinen argued: "If somebody decides not to join, it is not a catastrophe for a currency that is already powerful."
But the crushing result suggests that the next currencies to join the euro may be from the former Communist nations of eastern Europe, rather than Scandinavia or Britain. The new nations join the EU in May 2004 and hope to adopt the euro several years later.
Anders Fogh Rasmussen, the Danish Prime Minister, argued that Sweden's decision had "no bearing on our attitude towards the single currency".
It is unlikely to encourage early Danish entry either. Denmark, which rejected the currency in a referendum in 2000, has been debating whether to stage a second vote next year, but that seems to be off the agenda. That would leave a semi- permanent bloc of three euro "outs", dividing the EU clearly into inner and outer tiers.
The referendum rebuff served as a graphic reminder of how difficult it is to win a pro-European vote, and a warning of the problems that the EU faces over its new constitution.
After Sunday, Sweden will have to take a more Eurosceptic line in negotiations on the text proposed by the former French president Valèry Giscard d'Estaing.
When the final document is agreed, several countries, including Denmark and Ireland, will have to hold referendums. The possibility that at least one member state votes against, preventing it coming into force, must now be rated as high.
In Sweden, the referendum "no" result produced a round of recriminations in a nation still struggling to comprehend the trauma caused by the murder last week in a department store of Anna Lindh, the Foreign Minister.
Michael Treschow, the chairman of Ericsson, warned that investment in Sweden would suffer, arguing: "Nothing dramatic will happen on 15 September, but in 10 years' time company leaders will ponder where to establish in the future."
Goran Persson, the social democratic premier who called the referendum, faced a political headache after the size of the split within his party became evident. Five cabinet ministers opposed the euro, and Mr Persson's relations with the Greens and the Left Party will be complicated. These two parties are not in the government but support its programme in parliament, and their demands are likely to increase following their victory at the polls.
Mr Persson is, however, unlikely to quit, and his personal standing has been shored up by the dignified way in which he dealt with the murder of Ms Lindh. Indeed, her death may prompt him to stay on longer because it has deprived his party of an obvious successor.
- More about: