Maria Borelius: Why I was wrong about the Euro, am no longer a Europhile - and why Europe needs reform

Maria Borelius is a board member of the think tank Open Europe and a London based entrepreneur. She was formerly a Swedish MP and Minister for Trade. Follow Open Europe on Twitter.

Ten years ago, Sweden held a referendum on joining the euro.  I voted Yes – and I was not alone. A whole host of business leaders, including the Swedish CBI, the main political parties - both on left and right - and the major national newspapers, all were in favour of joining. The Swedish CBI put a record £45 million into the campaign to ditch the Swedish Krona, as the yes-side funding outspent the no-side by a factor of 10-1.

I still remember the shock when we realised we had lost, and I heard stories from close friends about how the campaign managers on the Yes-side buried their faces in their hands as devastated business leaders fumed with disappointment. Long-faced commentators and politicians made sombre TV appearances. A clear majority of Swedes – 56 per cent versus 41 per cent - had defied the establishment and said No to the euro.

A week is a long time in politics, and ten years a lifetime. Today, over 80 per cent of Swedes oppose the country joining the eurozone. The issue is completely off the table, with the eurozone crisis in its third year. Greece, Cyprus, Spain and Portugal have been saved by the bell, in some cases more than once. Or rather by the little old ladies in Heidelberg and Helsinki, on whose tacit approval the bailout of weaker eurozone countries and the survival of the euro rests.

So how could I – and so many others – have be so wrong? It’s not as if there were no warnings. Some came from dissenting voices within the establishment, but most from ordinary citizens.  I vividly remember a conversation I had with a car dealer in rural Northern Sweden. “You know what”, he told me, “I won’t vote Yes because I don’t believe Greece will manage the convergence criteria.” That very simple and profound analysis proved bang on, but it eluded some of the country’s leading economists. Or another friend, who asked whether it really was wise for the Portuguese and Swedish to share a currency, given different histories and cultures, one being a former superpower now basking in the sun with an economy based on fish, agriculture and tourism, and the other a consensus-oriented, Lutheran, hardworking pulp, paper and steel country heavily dependent on exports. These were not superficial differences, but a fundamental divergence in welfare, economic development and culture.

Our motives were noble. To us, the euro was a way of extending the common market, which was essential for our small country with many larger export-oriented companies, such as SAAB and Volvo. Ten per cent of all Swedish exports went to Germany, which was also the single largest market for both IKEA and H&M. The motives were also emotional. “Yes” was a way to end a sense of shame or alienation that had pervaded Sweden after our decision to remain neutral during World War II, a way to promote peace. Maybe my Yes was what psychologists would call a projection. I made the euro into what I wanted it to be. So part of the “Yes” was a dream, a Utopia in Brussels - but the devil is in the details. And they did not work.

However, my Europhilia began to wane even before the eurozone crisis erupted, around 2004. It was then that I started to work with the European Commission. At the time, I ran a small specialist PR consultancy, and was hired to arrange seminars to promote the so-called Lisbon Agenda – meant to make the EU’s the most competitive “economy” in the world by 2010 (it didn’t quite work out that way). As I arrived in Brussels I had high hopes. Here I would see Europe’s best and brightest, working together. Instead, the experience had the opposite effect.

Our discussions instead brought out the lowest common denominator. Endless speeches with verbose legalities, people babbling, talking to no one in particular, autocratic rants from various pompous eurocrats – all translated by some 10-15 interpreters. It was sometimes pure Monty Python. I remember a meeting when we were trying to settle which Commissioner would introduce a panel. It took us almost a whole day as the battle amongst the minor popes dragged on. No, this was certainly not what I had voted for.

In light of my own experience and journey – from a Europhile to a more realist stance – I can understand that some Brits think the EU is “unreformable”, and that the best thing to do would simply be to leave. However, we must be careful not to throw the baby out with the bathwater. The basic ideas behind the EU – the ideas of trade, peace and free movement of people, capital and goods – are fundamentally decent. Most opinion polls show that a majority of both citizens and business want to stay in a reformed, slimmed down EU, rather than to leave it altogether with no guarantee of replicating the trading relationship the UK currently has.

Yes, Brussels can be frustrating, but paradoxically, the EU is also ripe for reform. The eurozone crisis has exposed the EU elite’s unsustainable obsession with grand top-down projects, often pursued at the expense of economic common sense or democracy. More and more EU leaders are coming around to the view that the only way to make Europe work is to decentralise – and for national democracy to make a comeback.

The pieces are already moving. The Dutch – EU founding members – have outlined 54 areas in which the EU shouldn’t be involved, Angela Merkel has said a repatriation of powers should be possible, for the first time ever the EU budget has been cut, a big chunk of the EU’s fisheries policy is being transferred from Brussels to groups of member states – and a UK Prime Minister has actually offered an EU referendum, to be preceded by a strong reform push.

However, there’s still a long way to go before we get that fundamental new deal in Europe – and a lot of work still to be done. This is why I’ve joined the board of leading think-tank Open Europe, to continue to make the robust case for change. The euro has not aged well. I can humbly say that I was wrong that autumn day ten years ago. Others were wiser, such as my friend the car-dealer. Thanks to him and other citizens like him my native country was saved from a sea of trouble, and I have learned my lesson.