The bad times could come back again for a small country like Sweden... it will be extremely dangerous to stay outside the safe haven the euro represents

Swedish Prime Minister Goran Persson

Unlike in Denmark though a referendum probably will not take place in Sweden for another two years.

The Swedish Prime Minister Goran Persson believes Sweden has no alternative but to adopt the euro.

Though its economy has thrived outside the euro zone, he says that cannot continue forever.

"The bad times could come back again for a small country like Sweden, heavily dependent on exports with a small currency, it will be extremely dangerous to stay outside the safe haven the euro represents," Mr Persson said.

Avoiding an argument

The Swedish prime minister argues that the time is not right to spell out the arguments for joining the single currency to Swedes.

Prime Minister Goran Persson believes Sweden must join

Sweden assumes the presidency of the European Union for six months in January next year, and there will be a general election the year after that.

But many political analysts say he is just postponing a debate which could be very damaging to him politically - he knows he could alienate his own supporters by coming out heavily in favour of the euro.

Up in the far north of the country the argument for the euro has already been won though.

The town of Haparanda lies just below the Arctic Circle, right on the border with Finland - the only land border Sweden has with the euro zone.

Trading in euros

Haparanda has actually gone ahead and introduced the euro without waiting for the government in Stockholm.

It has arrangements with local banks to enable shopkeepers to charge for their goods in euros.

The town of Haparanda is already trading in euros

The town mayor has actually said he will find a way for Haparanda to stick to the euro even if the rest of Sweden votes against it.

Haparanda is heavily dependent on business with the Finnish town of Tornio, just across the border. Hapranda's mayor, Bengt Westman, says business has been great since both sides started using euros - he says it would be disastrous if Sweden voted no to the single currency.

"For Haparanda this is a question of survival. If we don't join we won't be able to develop properly. People and businesses want to come to Haparanda for now, but that will end if we don't join the single currency," Mr Westman said.

Undecided

The most recent polls show a lot of Swedes have still to make up their minds about the euro - and those that have are divided fifty-fifty for and against.

The biggest worry the "nos" have is the perceived threat to the welfare state.

The welfare state is very important for a lot of Swedes. We've seen it built up and we know it costs in taxes, but it's worth it and we don't want anyone else telling us we can't afford it

Lars Ohly, the Swedish Left Party

Sweden has very generous welfare provision - for instance, every Swede whether they have worked or not is entitled to a generous state pension. And every Swedish child is entitled to state-funded child care.

Swedes pay high taxes to afford this, though. But Lars Ohly of the Swedish Left Party, one of the main backers of the no campaign, says it is worth it - and he worries about the effects joining the single currency will have.

"The welfare state is very important for a lot of Swedes. We've seen it built up and we know it costs in taxes, but it's worth it and we don't want anyone else telling us we can't afford it," Mr Ohly said.

The right to pay taxes

So for Swedes the issue is forfeiting the right to pay high taxes.

The Danish referendum is bound to have an impact on the attitudes of Swedes to the single currency.

And the Swedish government must now be concerned its task of explaining the benefits of euro membership will be made infinitely more tricky if Swedes see their near neighbours vote no to the euro.