The rationale in Britain and Sweden, as in Denmark, is pretty straightforward. They can join the single currency at any time. With inflation low and unemployment at less than half the level of the euro zone, there’s no sense of urgency. “Now that we’re where we are,” says Klas Ecklund, chief economist at SEB bank in Stockholm, “most people–including business–feel there’s no hurry.”
In addition to a shared wariness about the extent of political integration some EU members on the Continent might want, Britain and Sweden each have their own reasons for being anti-euro. Britain has a history of being “outside” Europe and of resisting German and French initiatives. Many Swedes, like many Danes, worry that the fiscal strings attached to single-currency membership could have an adverse impact on their modernized welfare state.
Does opposition to the euro matter? Many if not most economists believe that Britain, Sweden and Denmark will eventually join Euroland. Like Ecklund, they see the world moving toward fewer and fewer currency blocs, with the dollar and the euro being the strongest. Especially for a relatively small country like Sweden (population: 8.8 million), there’s the risk that a currency not anchored to one of the blocs could be buffeted by forces beyond its control. “I don’t want to exaggerate this,” says Eklund, “but long term, as an insurance policy, it will be better to be part of a large bloc.”
Economists can afford to think long term. Most politicians cannot. The Blair government’s stated policy toward the euro used to run “prepare and decide.” Now it is, in effect, “prepare but delay.” Last week the watchword out of the mouth of Peter Mandelson, one of the most pro-European members of Blair’s cabinet, was “relax.” That might be fine advice for now–but probably not for the long term.
