Sweden to vote on euro membership next year

Sweden will vote on whether to swap the 130-year-old krona for the euro on 14 September next year, the Social Democratic Prime Minister, Goran Persson, said yesterday. A "yes" vote would leave Britain and Denmark the only European Union countries outside the single currency.

Polls show the electorate of nearly nine million is almost evenly split on the issue. If the Swedes do vote for the euro, it could be circulating from January 2006. Mr Persson has been cautious about a referendum, knowing support even among his own party rank and file is fragile. At one point, he might have hoped to wait until after a "yes" vote in Britain to hold the Swedish one. But if that was the case he has clearly lost patience with waiting for Tony Blair.

The Swedish Social Demo-crats will have the backing of three centre-right opposition parties in next year's poll. But the left and green parties, on which Mr Persson's minority government relies for parliamentary support on some issues, and another centre-right party, oppose the euro.

A euro referendum is a big test of commitment to Europe for Sweden, which bucked its tradition of standing aloof from international alliances when it joined the EU in 1995.

The opinion poll evidence suggests the result could be finely balanced. A survey this week by the private polling agency Demoskop showed 43 per cent of 9,217 people interviewed between 11 November and 27 November want to replace the krona with the euro, compared with 45 per cent in a similar poll in October. The opposition increased to 43 per cent from 39 per cent and the number of undecided was 14 per cent. The margin of error was 3 per cent. A Gallup survey before the Demoskop one, but released yesterday, showed the "yes" side at 40 per cent of the votes against the "no" side's 34 per cent.

The biggest Nordic economy is outperforming that of the 12 euro nations, and several recent polls indicate falling support for the single currency. But the Prime Minister is aware that, although polls before Denmark's referendum on the euro were mainly positive, the outcome in September 2000 was negative.

Mr Persson has launched his lengthy campaign with an economic pitch to the voters. "We will be living in a part of Europe where we very soon could have the perhaps strongest growing economic region," he said. "It's natural for everyone around the Baltic Sea to use this new currency, with the exception of Russia." The Baltic states ­ Estonia, Latvia and Lithuania ­ are among 10 nations in the final stages of membership negotiations with the EU.

Svenskt Naeringsliv, an employers' federation representing companies such as Ericsson and Electrolux, backs Mr Persson, who initially opposed the euro but changed his mind in 2000. A "yes" vote in Sweden would boost the prospects of a second Danish vote on membership of the currency in 2004.

That would raise the prospect of Britain being the only country outside the eurozone of the 15 member states, taking a role in an outer economic tier with the mainly eastern European nations about to join the EU.