Public support for entry into the eurozone is creeping up in Denmark and Sweden - the two European Union countries apart from the UK that have so far refused to take up membership. In Denmark, one opinion poll in September showed that those in favour of adopting the euro had edged ahead of those against for the first time since Danes rejected membership in a referendum in September 2000. The 48 to 46 per cent margin for the "yes" camp compared with a 53 to 47 per cent victory for the "no" side in the referendum.

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Britain's date with destiny
The debate over the UK’s entry into the euro has been in a strange state of suspended animation. Within the next 18 months, the government will give it the electric jolt that will revive it. Read article |
However, the poll, conducted by Greens, a research institute, was by no means conclusive. A simultaneous survey by Gallup pollsters put the "no" camp ahead by 48 to 46 per cent. Denmark is the only EU country to have held a referendum on joining the eurozone, and the "no" victory reduced enthusiasm among Danish political parties for staging another ballot soon. "It's certain that Denmark will not hold another referendum before the general election next spring. The time must be ripe before we head for the ballot boxes again," says Marianne Jelved, economics minister. In Sweden, the swing in favour of the euro has been more pronounced. Until August, opponents of membership had held the lead over supporters for 18 months. But one poll in August put the two camps level at 44 per cent. Another poll in early October showed the "yes" side ahead at 45 per cent, with 42 per cent against. Sweden's government made clear in its budget statement for 2002 that it was not contemplating early entry into the eurozone. It said Sweden had no plans for the moment to join ERM-2, the European exchange rate mechanism in which participation is a required first step to adopting the euro. Goran Persson, prime minister, says eurozone membership by 2005 is still possible. However, a government-commissioned report, published in July, asserted that the Swedish economy had not yet sufficiently converged with the eurozone. One problem has been the weakness of the Swedish krona, which has fallen by about 17 per cent against the euro in the past 18 months. Mr Persson says it is precisely the krona's weakness that has made many Swedes think more positively about adopting the euro. In both Denmark and Sweden, popular support for entry into the eurozone might rise if UK voters backed the euro in a referendum likely to be held during the current parliament, whose term expires in 2006. For central and eastern European countries waiting to join the EU, eurozone membership is unlikely before 2007 at the earliest. This is because no country is expected to enter the EU before 2004 and, before adopting the euro, every new EU member will be required to spend at least two years in the exchange rate mechanism. A few countries, however, already seem well placed to meet the EU's Maastricht treaty criteria for eurozone membership, which include manageable public debts and fiscal deficits, low inflation and exchange rate stability. Slovenia, for example, has stronger public finances than either Greece or Portugal had in the 1990s, and both Mediterranean countries are in the eurozone. Other former communist states do not yet fulfil the Maastricht requirements. The Czech Republic, Hungary, Poland and Slovakia, with annual inflation rates ranging between 4 and 8 per cent, would not qualify at present, though time is on their side. One troublesome issue concerns whether EU governments and European Central Bank policymakers will be satisfied even if the EU's new member-states do eventually meet the Maastricht criteria. Some have cautioned that the countries of central and eastern Europe should make sure that their economies have enough all-round strength to sustain eurozone membership over the long term. By this, they mean that the new member-states ought to have stable and efficient banking systems, rising per capita incomes, an EU-harmonised legal infrastructure, and business sectors capable of competing in a free international trade system. These do not, strictly speaking, form part of the Maastricht requirements for eurozone membership. But some EU and ECB officials are concerned that setting policy for a monetary union of 20 or more countries could prove extraordinarily difficult if economic and income disparities in the enlarged eurozone are too wide.
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