Two polls released Sept. 12 send conflicting signals on the impact of Foreign Minister Anna Lindh's fatal stabbing on Sweden's euro referendum Sept. 14. Currency markets have anticipated the referendum's defeat, and — though defeat is still more likely than victory — one poll suggests a chance for euro supporters to squeak out a victory. Adoption would give both the euro and the Swedish krona a substantial boost beginning Sept. 15. If the euro vote fails, however, markets should take the defeat in stride, with a slight drop in both currencies.
One day after Swedish Foreign Minister Anna Lindh's died of stab wounds, two polls yielded contradictory information about public attitudes toward the Sept. 14 referendum on adoption of the euro. The conflicting results suggest that the vote might be closer than previously thought. A Sifo poll conducted after Lindh's death found 50 percent of Swedes oppose adoption, with 38 percent in support. The results mirror most polls conducted during recent weeks, which give the opposition a solid double-digit lead. However, a Skop survey conducted the same day concluded that Swedes were split 50-50. Recent economic trends provide ammunition for euro opponents. Although the European Union estimates Sweden's economy will grow 1.4 percent this year, the European Central Bank on Sept. 11 downgraded the year's eurozone growth expectations to 0.4 percent. Regardless of whether they are justified, many in Sweden link diverging growth forecasts to the different currencies and fear the new currency ultimately could undermine their prized welfare state. With a persistent lead by opponents in polls — and the apparent failure of an intensive public relations campaign to shift public opinion — currency markets have anticipated the euro's defeat. Market expectations have driven down the krona's value over recent weeks: After holding steady at 9.2 and 9.3 to the euro through most of the summer, the krona declined to 9.1 between Aug. 26 and Sept. 11, with similar drops against the dollar. Markets continued to bet on Sept. 12 that the vote would fail, and the krona fell another 0.11 percent during afternoon trading in Europe. Since the markets already have bet against the referendum, an official defeat should have only a marginal downward effect on the krona. Defeat could hurt the pro-euro movement in Britain — and the euro might take a hit as a consequence — but the effect most likely would be short-term. However, voter rejection might not be as certain as it once was. Euro supporters could benefit from a sympathy vote in Lindh's honor, especially as her death came just days before the public referendum. Lindh was one of Sweden's most popular politicians and a likely successor to current Prime Minister Goran Persson. Her violent death has sent a shockwave through the Scandinavian country. Lindh was also a key figure in Sweden's pro-euro campaign. Her face adorned pro-euro posters throughout Stockholm, and she had teamed with Ericsson CEO Carl-Henric Svanberg — one of the country's most powerful business leaders — to warn that rejecting the euro could reduce overall investment in Sweden. If the Skop poll can be believed, her death might have a substantial impact on the referendum. An even split of opinion would reflect a massive shift of public opinion from earlier polls, suggesting that many undecided voters could swing emotionally to the pro-euro side. Unfortunately for euro supporters, there are reasons to question the Skop findings — or those of any single poll. For example, an early September poll showing that support had climbed to within 5 points, but in successive surveys, the gap fell back to between 12 percent and 15 percent. Furthermore, Lindh's death prompted Persson to put the brakes on a massive pro-euro publicity campaign, and even might have taken some steam out of the pro-euro movement. A Sept. 11 Gallup poll found that 91 percent of those questioned said they did not think Lindh's death would influence their voting decision, compared to 5 percent who said it would. It is somewhat hard to believe that the practical and dispassionate Swedes would let their emotions run wild Sept. 14. Nevertheless, Lindh's death might have opened the door, if ever so slightly, for a referendum victory that seemed impossible days earlier. Because the markets have positioned themselves for the referendum's defeat, a pro-euro victory would have a far greater impact on currency markets than a rejection. The krona could quickly recover territory it lost during the last weeks, and possibly move above the 9.3-euro mark. The euro also could get a bounce against other foreign currencies on the prospect that Sweden could give the British pro-euro forces a much-needed boost. The impact of Sweden approving the euro would be far more interesting than the effects of defeat, even if the chances of approval remain far less likely.