Refuseniks and problem cases of the non-eurozone

As the eurozone crisis deepens, the countries outside of it are trying to come up with ways not to lose control of their destinies inside the EU.

Published on 10 November 2011 at 14:15

Is a referendum on the euro, call for by Czech Prime Minister Petr Nečas, a “triumph of reason” or rather a “stab in the back” of the saviour of the euro, German Chancellor Merkel? The Czech Republic will have to work out its own role and position in crisis-torn Europe. Elsewhere across the continent, this all-important agenda is shaping up in different ways.

The nine other countries outside the eurozone can be divided, with some simplification, into four groups. Number one, the open refusniks: Britain, Denmark, and Sweden. Two, those who want to but cannot quite yet meet the conditions for adopting the euro: Lithuania, Latvia, and Bulgaria. Three: Poland, a strongly pro-European fan of the Union. And lastly, “problem cases” who due to shaky national budgets and economies are not even in a position to debate joining the euro: Romania and Hungary.

The Czech Republic is still in the second group, but is swinging toward group number one. London and Copenhagen both previously negotiated an exception – that is, to opt out of the obligation to adopt the euro. Although Sweden has no exemption, it’s ranked among euro opponents because of a referendum on the single currency held in 2003 that was rejected by a narrow majority.

An expected explosion of nationalist and anti-EU sentiment

To label Sweden today as eurosceptic, however, is not entirely straightforward. According to Mark Rhinard, Senior Research Fellow at the Swedish Institute of International Affairs, worries about growing alienation from the European core may have prompted the recent statement by the Prime Minister that Sweden could contribute to the rescue package for Greece, even though, as a non-eurozone member, it is not obliged to do so.

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It’s much the same fear of losing “influence over its own future” that is now being voiced in Denmark – a country that, along with Britain, has come to be labelled the most sceptical of all the twenty-seven member states. Local experts, on the other hand, are increasingly observing that Denmark has long been an indirect member of the eurozone anyway, since for years the Danish krone has been in the especially close relationship with the euro, adhering to rules eurozone candidates must follow in the two years preceding a changeover to the euro.. Although formally independent, the Danish krone is now firmly tied to the movements of the euro.

Interviews with political scientists and economists in countries outside the eurozone reveal that calls for referendums are exceptions rather than the rule. The only two countries where such calls have been heard recently are Latvia and Poland. In Poland one was called for by the head of the opposition Law and Justice party, Jaroslaw Kaczynski, who in the last elections, however, was defeated by pro-EU Prime Minister Donald Tusk.

In Latvia, it should be borne in mind that only two years ago the country found itself in a situation similar to that facing Greece today. A host of economic problems forced the small Baltic state to accept drastic measures imposed by the European Central Bank and the International Monetary Fund: salaries and state benefits were cut across the board by tens of percent, and the government introduced several new taxes and raised existing ones. Many commentators expected an explosion of nationalist and anti-EU sentiment. None of this has happened – at least, not yet.

"Hungary must go its own way"

The Polish point of view is far from prevailing in the Czech Republic. “Entering any time soon is nonsense: the monetary union has become a debt union, and I see no reason why we should pay someone else’s debts,” Prime Minister Necas has often repeated lately. The Czech Republic ought to do only what will bring it some benefit.

At the same time, however, Nečas has not steered the Czech Republic into a radical anti-Europeanism, as embodied by Czech President Vaclav Klaus. “As for the referendum, it simply points to the fact that EU membership entails increasing costs, and for countries like the Czech Republic it may be preferable to work out a slightly slower speed of integration.”

Outside the eurozone, no other governments are expressing similar notions – except for that of Hungary, led by Prime Minister Viktor Orban. “We can’t expect rapid growth from the EU, and Hungary must go its own way,” he said recently. Orban, though, is generally regarded in the Union as an autocratic politician whose government has taken Hungary to the very periphery of Europe.

Translated from the Czech by Anton Baer

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