Ten years on, what Britain can learn from the Swedish euro referendum

Last Saturday was the tenth anniversary of the Swedish referendum on the euro, and our Director, Mats Persson, wrote this piece for the Guardian's Comment is Free:

"The best argument against democracy is a five-minute conversation with the average voter," Winston Churchill famously said. He could have added that the best argument against elite rule is a five-minute conversation with your average politician.

I used to be sceptical of referendums. They are populist instruments, I thought. Voters never vote on the actual issue. And what do voters know anyway? Then the euro happened. 

Saturday is the 10-year anniversary of the Swedish public voting no to joining the euro in a high-profile referendum, 56% to 42%. The Swedish elite was in shock. All the major parties, the national newspapers, the business organisations, including the Swedish CBI, and most of Stockholm's chattering classes favoured ditching the krona. According to some estimates, the yes campaign outspent the no campaign 10 to one. There were a lot of clever and genuine people on the yes side, making valid arguments such as eliminating exchange risk for business and replacing the flaky devaluation policies of the past.

However, it was obvious that something wasn't quite right. Yes, perhaps Sweden could benefit from sharing a currency with Germany, the destination of many of its exports. But the euro wasn't about liberal economics: stretching from the Arctic circle to Sicily, it locked vastly different countries, cultures and economic structures, into one monetary system, under a single interest rate – forever binding together the problems of all its members, large or small. It was a system based on the hopelessly flawed assumption that politicians and central bankers would make the right decisions all the time.

As with all referendums, there were various reasons why the Swedish public voted no, including an inherent bias in favour of the status quo. Fundamentally, though, most Swedes' gut instinct – bondförnuft as the Swedes say (literally "farmer's common sense") – told them that a serial defaulter with dubious finances, Greece, and a heavily industrialised exporter with an obsession with sound money, Germany, simply couldn't share the same currency. Swedes treated the exam question with the same kind of book-keepers' approach by which many of them run their own household economies. Whatever the experts told them, the arguments – and the numbers – simply didn't add up.

Ten years on, Europe is shrouded in uncertainty, but one thing is clear: the Swedish public got it right, the elite got it wrong. Though there may have been some politicians in Sweden and elsewhere who saw the single currency as the ultimate way to set the snowball rolling towards an EU superstate, the euro was far more a case of cock-up than conspiracy. Today, 80-90% of Swedes oppose the euro, and the political and business elites are wary too – save the odd isolated politician doing an impression of the Japanese soldiers found in the 1960s refusing to believe the second world war had ended.

However, referendums are by no means a magical potion. It's clear that there are cases where they're hijacked or misused – and where they lead to outcomes that no one intended or that settle nothing. Sweden itself has some less successful experiences with public votes. In 1980, a three-way referendum on whether to ditch nuclear power – arguably a populist kneejerk response to the Harrisburg disaster – generated a vote in favour of a vague plan to incrementally dismantle all nuclear plants. The result was totally inconclusive, leaving half the country embittered on the issue (Sweden still has nuclear power today).

Incidentally, there's a lesson for David Cameron here. He has promised to negotiate a new settlement in the EU and put that to an in/out referendum by 2017. If that indeed happens, the worst possible outcome is a 49-51% type result, too close to call in either direction. As in Sweden in 1980, much of the population would feel disenfranchised and the EU debate will continue just as before. This isn't in either the UK's or Europe's interest.

To avoid this scenario, there needs to be substantial and systemic changes, ideally rooted in EU-wide solutions so that they last (unilateral opt-outs tend to be eroded). That would allow a decisive vote in favour of the UK staying in a heavily reformed, slimmed-down EU.

One can have different views on Cameron's strategy, but given public and political discontent about the EU status quo, sooner or later there will probably have to be a referendum to settle the Europe question in this country. And as the Swedish euro vote shows – warts and all, the public can opt for perfectly rational and responsible outcomes that would not occur if politicians were left to their own devices.

Beppe Grillo demands Five-Star Movement government and euro referendum

Remember Italy?

Looking unusually smart in his dark suit, Beppe Grillo, along with some of his Five-Star Movement colleagues, this morning opened the second day of talks with President Giorgio Napolitano on forming the new Italian government.

After the meeting, Grillo's parliamentary whips Vito Crimi and Roberta Lombardi (see picture) read a short declaration to the press. The following three points stood out:

• The Five-Star Movement's 20-point plan for government would include a referendum on Italy's membership of the euro. This now seems to have become official party policy; 

• The Five-Star Movement wants "a full mandate" to form a government of its own choosing;

• If the Five-Star Movement fails to obtain the mandate, it will request the chairmanship of two key parliamentary committees: COPASIR, which is in charge of supervising Italy's intelligence services; and the committee in charge of supervising Italy's public broadcaster RAI.

On his blog, Grillo has just ruled out supporting "political or pseudo-technocratic governments". This sounds very much like a definitive 'no' to any solution other than a cabinet led by the Five-Star Movement itself, and essentially leaves two options open:

• A national unity government backed by Silvio Berlusconi, centre-left leader Pier Luigi Bersani and possibly Mario Monti. Such a government could be led by either Bersani himself or someone from outside of politics. Incumbent Interior Minister Anna Maria Cancellieri and newly-elected Senate speaker Pietro Grasso (a former anti-mafia prosecutor) are the names doing the rounds in the Italian media at the moment;

• New elections. These could, however, only be called once the next Italian President takes office in mid-May (we explained why in our response to the Italian election results).

Bersani is due to meet President Napolitano this evening at 5pm (GMT). The prevailing view in the Italian media is that the President may announce the name of the (first) person tasked with forming the new government by tomorrow evening, or Saturday morning at the latest.

We'll keep you posted with real-time Twitter updates from Italy. Follow us @OpenEurope or @LondonerVince.     

And who are you again? Grillo's MPs and Senators meet each other for the first time

163 MPs and Senators-elect from the Five Star Movement met in Rome yesterday and today. As an initial party meeting after a general election it was quite unusual: despite belonging to the same party, most of the elected representatives had never heard of each other before, let alone met. Beppe Grillo himself did not know many of them, and that's why he joined the meeting today - along with the Five-Star Movement's media guru Gianroberto Casaleggio. Remember, the Five Star Movement selected its candidates through an on-line survey, so no face-to-face contact involved.

This shows just how far away the Five-Star Movement is from being a traditional political party - by any standard. And there's some more stuff:

• Large part of today's meeting was live-streamed and available to everyone online; 

• At the meeting, each of the 163 parliamentarians-elect was given the opportunity to introduce him/herself to the others, and explain what his/her background and areas of interest were;

• The MPs and Senators-elect are all considered 'spokesmen' and 'spokeswomen' of the Five-Star Movement;

• The 163 today chose their faction leaders in both houses of the Italian parliament by a simple show of hands. The faction leaders will only hold the post for three months, and are to be replaced after that.

Incidentally, the faction leader in the Italian Senate is Vito Crimi, a 40-year old (the minimum legal age to be elected as a Senator in Italy) judicial assistant from the Northern town of Brescia.  The faction leader in the Chamber of Deputies, the lower house, is Roberta Lombardi. She is 39, holds a degree in Law and works for an interior furniture company.

Whatever one thinks of the Five-Star Movement, it was quite impressive to see so many Italian MPs in their thirties (or even twenties) in the same room. Finally some fresh air in Italian politics, some might say. We still don't know what the Five-Star Movement will do next. Grillo made a quick appearance at the very beginning of the meeting today, saying that the Movement will only vote for the laws which fit with its manifesto - but he said that several times before.

It remains to be seen how this enthusiastic but inexperienced lot will react when the new Italian parliament convenes - on 15 March, or a bit earlier - and talks on the formation of the next government enter their decisive stage. The time for post-election celebrations may already be over for the Grillini. The question is: will this innovative approach to party politics hold (think party discipline) when things get serious?