Swedes and Danes swing behind the euro, polls show

Voters in two of the three EU countries outside the euro are now firmly in favour of membership – before hundreds of thousands of holiday-makers have handled the single currency for the first time.

An opinion poll released yesterday in Sweden found that 58 per cent of people backed the single currency. Recent surveys in Denmark also show that more than half of the population favoured membership of the euro.

The rising tide of support for the single currency in Sweden and Denmark is likely to leave the British government isolated unless it forces the pace on its own referendum over whether to adopt the euro or not. British public opinion remains resistant to the euro, although the single currency's supporters hope that exposure to it during the holiday season will erode opposition.

The poll, in the Swedish daily newspaper Dagens Nyheter, found that almost twice as many supporting the euro as opposing it: 58 per cent in favour compared with 30 per cent against, with 12 per cent undecided. Although those figures were slightly higher than some in other recent surveys, the trend is of solid support for the "yes" campaign, paving the way for a referendum early next year.

The centre-left government of Goran Persson, which backs the euro, is well placed to win re-election in the autumn and is expected to call a referendum next year.

Last month, a poll of 1,677 people published in Denmark by the Confederation of Unions' weekly newsletter A4 showed that 59 per cent of voters want Denmark to join the euro, with 39 per cent opposed.

Denmark's position is, however, more complicated even though its currency is linked very closely to the euro through the European exchange rate mechanism. While Danish euro supporters are now in the ascendancy, the government is wary of putting the issue to the public too soon, having lost a referendum on the issue in September 2000. Most observers believe the government will wait until 2004 before it seeks to overturn that verdict.

All of which makes the British position the most uncertain. While the Government has pledged that it will complete its assessment of five economic tests of whether membership would benefit the UK economy within a year, public opinion remains opposed. A survey carried out by NOP for Barclays Capital last month found 49 per cent would reject the euro even if the Government recommended entry – up from 46 per cent in May – compared with a steady 36 per cent who favoured joining.

Polling work conducted so far in Britain has not shown any significant "holiday effect" on support for the euro, perhaps because only travellers who visit more than one eurozone country are likely to experience a real benefit.

With voters still uncertain, and the Treasury highly cautious, speculation has grown that Tony Blair might postpone the momentous political decision until 2005, after the next election. By then, Sweden and Denmark would probably have joined, leaving Britain in the company of up to 10 mainly ex-Communist countries who hope to join the EU in 2004.

Ironically, as the euro climbs on the currency markets, EU policy-makers are embroiled in a fierce debate over the rules governing economic management among the 12-nation single currency zone.

Portugal has become the first nation to face the prospect of huge fines for breaking the rules that underpin the European single currency, stoking the debate on whether they should be relaxed.

In general, however, the backdrop for a referendum is much more positive for euro supporters than in September 2000 when, as Danes prepared to go to the polls, the currency was sliding on the foreign exchange markets. Now comfortably above parity with the US dollar, the euro has benefited from the alarm in the markets at the series of accounting scandals in America.

Euro currency was brought into circulation in January in an operation whose smoothness defied the predictions of Eurosceptics.While consumers in the eurozone appear to have adjusted quickly to using the new currency, there has been a small-scale consumer backlash in several countries, including Germany, over suspicions that traders have used the advent of the euro to increase prices.

But official figures record a more sober picture. Eurostat says inflation rose by between 2 per cent and 2.7 per cent in the month of the euro launch but a maximum of 0.16 per cent of this was due to the new currency.