Vikings are meant to ravage Europe, not to save it, but on September 14 Sweden's voters decisively rejected the option of signing up for the euro. The Swedes' rejection of that economic suicide note may have set in motion a process that could save the continent from the worst consequences of the EU's disastrous single currency. To start with, Sweden's nej was a valuable reminder to the electorates in the U.K. and Denmark (both of which have yet to accept the euro) that there is nothing inevitable about its introduction in their countries. It was also a signal to those Eastern European states that will join the EU next May that they too should think very carefully before adopting a currency that will almost certainly be unsuitable for their level of economic development for many years to come. Most important of all, if Brussels chooses to listen (early signs are not, needless to say, encouraging), the Swedish vote was a useful warning that the EU's current approach may lead to political and financial disaster.

NO SMALL WIN

The "no" vote was a remarkable achievement. The effort to persuade Swedes to just say "yes" was backed by both the Social Democrats, for decades Sweden's strongest political party (and currently the dominant force in the country's governing coalition), and by most parties on the center and center-right. Additionally, the greater part of the business establishment also supported the attempt to junk the krona. Cheered on by large sections of the media, the "yes" campaign was slick, lavish, and thoroughly disingenuous. It is estimated to have cost five times as much as the opposition's more-homespun approach. The "no"s had few financial resources and even less, one would think, in the way of obvious intellectual credibility — their most-visible backers were some dissident Social Democrats and the Greens and other parties of the far Left.

Despite that, they were comfortably ahead by the time when, a few days before polling, Anna Lindh, Sweden's foreign minister and the most-popular advocate of the single currency, was murdered in a downtown Stockholm store. The attack on Ms. Lindh was a crime that appalled the nation, but if this tragedy (and none-too-subtle attempts by the EU Commission to exploit it) persuaded any Swedes to change their minds, it wasn't apparent in the result. The euro was rejected by 56-42 percent, a far-higher margin than had been expected.

Brussels responded with characteristic pique. Commission president Romano Prodi talked darkly of the "influence" that Sweden stood to lose within the EU, a comment that would have had more force if Sweden had much influence in the first place. Besides, there's something more than a little obnoxious about an argument that says, basically, join our gang or be beaten up. Typically for Prodi, it's also misleading. The EU is currently made up of 15 countries with a population of about 380 million. In May that total will increase to 25 countries and some 450 million people. To suggest, even within the context of the smaller group of countries that have signed up for the euro, that Sweden (with a population of only nine million) would have had much influence is simply ludicrous. The management of the euro is having, and will continue to have, a major impact on Europe's economies. Sweden needs to fashion a response that is in its own best interests. Exchanging the freedom to do so for a few crumbs at the top table of the European Central Bank makes no sense at all.

THE POLITICS OF THE "NO"

As to why the Swedes chose to reject the currency, Prodi had an explanation that was, if it's possible, even more obnoxious. Fear of the new, he sneered, was to blame, a claim difficult to reconcile with the fact that opposition to the euro was strongest among the under 30s.

The truth was rather different. Savvier than their government gave them credit for, many Swedes had realized that the euro is as much a political as an economic project. That's true already (how can a transfer of monetary and interest-rate policy to a pooled central bank not be?), but it is likely to become even more so in the future.

This is because the euro is a currency that was introduced too fast, too far, and too soon. To understand why, it's necessary to look no further than the EU's ruling class, a caste that sees the world as it thinks it should be, not as it is. This, after all, is a bureaucracy that has attempted to regulate the curve of the humble banana (yes, really). Economies, however, are rather more complex than fruit. As the EU prepared to launch its currency, it was decreed that only those countries that had "converged" economically would be eligible to enroll for the euro. Miraculously, all eleven applicants (Greece came later) were found to have passed the test. Phew! But this convergence was bogus, created by statistical sleight of hand that would have embarrassed even Enron. Worse, it was always going to be meaningless. National economies evolve over time. The EU's reliance on a snapshot of the statistical data on a particular date was never going to give the true picture. It never could.

The mess that has followed was utterly predictable. A one-size-fits-all money has been imposed on some very divergent economies. Obliged to consider the euro zone as a whole (and, one suspects, to help establish the credibility of the new currency), the European Central Bank has kept interest rates far higher than, say, conditions in Germany alone would justify, something that has compounded that country's economic misery. Rubbing salt into German wounds, under the rules of the "growth and stability pact" that supposedly underpin the euro, Germany is obliged to reduce its budget deficit, dumb policy in a near-deflationary ex-growth economy.

Germany, and now France, seem ready to ignore these limits, a sensible-enough stance given their respective national situations, but tough luck on all those smaller countries that had been bullied into recession in the interests of what they foolishly believed to be a common currency. The French prime minister recently explained the situation with splendidly Napoleonic directness, "my first duty is employment and not to solve accounting equations and do mathematical problems until some office or other in some country or other is satisfied."

Some office? Some country or other? So much for the smaller countries' "influence."

EURO FUTURE

There are two likely solutions. Either a more general breakdown in budgetary discipline will be accepted (in which case the euro will weaken or have to be propped up by higher interest rates) or there will need to be a transfer of substantial taxing and spending authority — the meat and drink of daily politics — away from the EU's member states to its center, so that Brussels can smooth out the local dislocations caused by a pan-European currency. Logical enough, except that that will be the point when the EU will finally be fully federal in everything but name and, ahem, democratic legitimacy.

And to Swedes, this matters. With the possible exception of some of ABBA's less-successful costumes, Sweden has far less to be ashamed of in its past than quite a number of the EU's member states. As a result many Swedes retain far more nationalistic pride, politely understated, of course, than is acceptable in some of Europe's grubbier spots. Add to that a long — and active — democratic tradition and it's easy to see why it was worries over the loss of sovereignty and democratic control that weighed heaviest with the "anti"s. Even the fears that the nation's generous — and absurdly expensive — social-security system would be endangered by the euro (another important reason for the "no" vote) have to be understood in this context. Misguided they may be, but to many Swedes, their fiercely egalitarian welfare state, folkhemmet ("the people's home"), is about more than economics. It's something that helps define them as a people. Any perceived threat to it was a sensitive issue in a vote that was, at its heart, all about national identity.

Ironically, these fears were inflamed by the very nature of the "yes" campaign. The argument that adopting the euro was essential for Sweden's international competitiveness was code, many Swedes thought, for the destruction of the Swedish welfare state. It was also somewhat difficult to square with the fact that Sweden is currently competing rather well. Sweden's economy is growing notably faster than those countries unlucky enough to be stuck in the euro zone, its unemployment is far lower and, in marked contrast to the shambles in France and Germany, its budget is in surplus. Under these circumstances, it's no surprise that, four days after the vote, the krona had risen to a ten month high against Prodi's funny money.

Adding further to the irony, all the cash spent by the ja heads actually worked against them — slick, lavish, and patronizing, their propaganda was a typical product of Europe's big business, big bureaucratic elites, hardly something likely to appeal to voters looking to retain some shreds of sovereignty in an EU widely — and correctly — seen as being imposed on them from above. And appeal it didn't. The final tally showed a significant swing against the euro when compared with polls taken only six months before.

Ultimately Göran Persson saw the fix he was in. As disaster loomed, he spent the later part of the campaign claiming that the single currency would both stimulate the country's economy and bolster the welfare system. Later still he began hinting that "yes" would really mean "later." When, unsurprisingly enough, these efforts failed to convince anyone, the poor man then resorted to an argument of the truly desperate. Seemingly unaware of the fact that it's been a while since the panzers last rolled, he took to mumbling about the need for "peace" in Europe. This was too much for Mats Qviberg, one of Sweden's most-prominent financiers. Persson's reminiscences of a "weeping" Helmut Kohl saying he did not want his sons to die in a third world war were not, quipped Qviberg, an argument for Sweden to sign up for the euro.

Indeed, but it's difficult to see what was.