Sweden Makes it Safe to Say "No"

I was thrilled at the "no" vote by Sweden on the Euro--not because of any direct effect on either the Euro or America, but because it is less a rejection of the monetary unit than it is a rejection of the policies that go with it.

That is, I don't think the voters rejected the Euro because they are so attached to the Krona, but because they realize that the rules that govern a sovereign nation's monetary policy shouldn't be governed by a body outside that nation. In fact, if a country can't set its own economic agenda, its very sovereignty is in question.

Well documented unreasonable price rises across the 12 countries that adopted it didn't help but its real achilles heel has turned out to be the stability and growth pact - the rule book which underpins it.

The pact's insistence that no signatory country should have a budget deficit larger than 3% has rankled many on the left. And the fact that failure to comply is punishable with large fines has gone down even worse.

In short, the idea of capping government spending on public services in the name of good economic housekeeping has turned out to be unpopular and distasteful to many of the continent's vote-hungry politicians. In Sweden, where the country's welfare state is seen as non-negotiable, the pact's rigidity was a real turn-off. The other problem has been enforcement.

I have no general problem with a set limit for deficit spending or increases in spending--and, in fact, I think we'll see more laws governing those issues on a local basis in the United States. Making it more difficult for our leaders to spend more and more of our money is a good idea--keeping a cap on their habits might help keep them out of my pocket.

And I still would have voted the Euro down if I were in Sweden.

Would I want to see the US sign over economic sovereignty to a fickle bureaucracy like the EU? Goodness no, and I would rather that our friends avoid the same fate. When it finally comes up for a vote in Britain, I hope that the measure fails in a dramatic way (with all apologies to Tony Blair, a man who I have grown to respect but is still terribly wrong on this issue).

The author also notes something that makes the EU even more worrisome to citizens that enjoy democracy.

In Sweden, where the country's welfare state is seen as non-negotiable, the pact's rigidity was a real turn-off. The other problem has been enforcement.

Then there was the issue of democracy. The Swedes, famed for their openness and transparency, have little time for the secretive machinations of the Frankfurt-based European Central Bank.

The bank's failure to publish the minutes of its meetings or even disclose anonymous voting lists has left many Swedes feeling uncomfortable.

As well it should.

We, as Americans, should encourage our friends abroad to reject adoption of the Euro. For some of the smaller, Eastern European nations, the Euro could be a boost to their economy, but that boost could come from open trade arrangements with other nations without signing over a good measure of a nation's sovereignty to an outside bureaucracy.

As the author of the article points out, it is now much safer to say yes to the EU and no to the euro.

Read the story.

Posted by zombyboy at September 15, 2003 02:16 PM | TrackBack