For many years it has been argued around Europe and in Sweden about whether Sweden should join the European currency, “The Euro”.
Sweden is currently part of the European Union (EU) but it is not, however, part of the European Monetary Union (EMU)
There are currently 25 members of the EU and 12 of them are part of the EMU. Those who are not part of the EMU include the UK and Sweden.
Would it be a good idea for Sweden to join the EMU and embrace the Euro as its new currency?
In September 2003, Swedish citizens were given the chance to vote in a referendum to decide whether they would prefer to have the traditional Swedish Kronor replaced by the modern Euro currency.
They were given the choices of ‘Yes’, ‘No’ and ‘Blank Vote’.
82.6% of the population who were eligible to vote did so. Of these, 2.1% handed in a blank vote, 42 % were in favour of the Euro, and 55.9 voted against it.
A popular opinion outside of Sweden was that people were not really voting about the currency as such, but voting about the economics, sovereignty and democracy of their country.
Another factor which surely influenced the voting behaviour was the murder of the Foreign Minister Anna Lindh, who was a strong supporter of Sweden joining the EMU and the face of the yes campaign in Sweden.
Reasons Sweden should be a part of the Euro
In his report 'to be or not to be in the Euro?', Lars Jonung stressed that the reasons that Sweden should become a part of the Euro is that competition, employment and economic growth would all rise as a result of the larger market that the Euro would provide. Competition is always good, especially for consumers, as more competition forces prices to be lowered and development of products to increase. For this, more jobs would be created and overall be better for the economy of Sweden.
He also mentions that the Euro is a good way of keeping the peace with other countries around Europe. Sweden could feel more connected to other countries around Europe and this could lead to better relationships with these countries. He mentions that a common identity is created amongst countries which share use of the Euro.
Trade involving Sweden would also increase, because businesses could make both long and short term investments because of the diminished risk, created by the stability of the Euro.
A huge benefit for the average everyday citizen is that travel becomes easier and cheaper around Europe and the world. Goods are easier to buy, it becomes much easier for consumers to compare prices and the Euro is a currency which is widely accepted around the world.
Reasons for Sweden not to be part the Euro
The main reason against Sweden not joining the Euro is that the European Monetary Union will have control over the decisions made concerning the banks and the monetary policy. The central bank of Sweden, the “Riksbank” currently has this control.
Lars Jonung wrote in his report that when the Swedes said no to the Euro, they chose to keep their currency “based on a floating exchange rate combined with inflation targeting by the Riksbank”.
This could be used as a strategy to support their export during difficult times, but it only provides a short period of safety, as these problems will arise in the long run anyway.
Another disadvantage which Jonung mentions is that Sweden will lose power because they will have to follow and respect the decisions and rules of the European Central Bank, instead of the Swedish Riksbank. However, with the introduction of the Euro, Sweden will gain power inside the European Union as it would become a more prominent member and have a more active role. He says that with the Euro, Sweden has the opportunity to “be able to influence policies to a larger extent as a member of the euro area than as an outsider”
There are lots of economic, political and social benefits for Sweden in joining the Euro, as I have already mentioned. The problem at the moment seems to be one of tradition, and the Swedes being too proud to change what they believe is their heritage. If Sweden were to join the Euro the people would see the benefits in only a short space of time and it would definitely be a change which would be for the better.
Adapted from a piece of work by Monique Rozeman
Sweden is currently part of the European Union (EU) but it is not, however, part of the European Monetary Union (EMU)
There are currently 25 members of the EU and 12 of them are part of the EMU. Those who are not part of the EMU include the UK and Sweden.
Would it be a good idea for Sweden to join the EMU and embrace the Euro as its new currency?
In September 2003, Swedish citizens were given the chance to vote in a referendum to decide whether they would prefer to have the traditional Swedish Kronor replaced by the modern Euro currency.
They were given the choices of ‘Yes’, ‘No’ and ‘Blank Vote’.
82.6% of the population who were eligible to vote did so. Of these, 2.1% handed in a blank vote, 42 % were in favour of the Euro, and 55.9 voted against it.
A popular opinion outside of Sweden was that people were not really voting about the currency as such, but voting about the economics, sovereignty and democracy of their country.
Another factor which surely influenced the voting behaviour was the murder of the Foreign Minister Anna Lindh, who was a strong supporter of Sweden joining the EMU and the face of the yes campaign in Sweden.
Reasons Sweden should be a part of the Euro
In his report 'to be or not to be in the Euro?', Lars Jonung stressed that the reasons that Sweden should become a part of the Euro is that competition, employment and economic growth would all rise as a result of the larger market that the Euro would provide. Competition is always good, especially for consumers, as more competition forces prices to be lowered and development of products to increase. For this, more jobs would be created and overall be better for the economy of Sweden.
He also mentions that the Euro is a good way of keeping the peace with other countries around Europe. Sweden could feel more connected to other countries around Europe and this could lead to better relationships with these countries. He mentions that a common identity is created amongst countries which share use of the Euro.
Trade involving Sweden would also increase, because businesses could make both long and short term investments because of the diminished risk, created by the stability of the Euro.
A huge benefit for the average everyday citizen is that travel becomes easier and cheaper around Europe and the world. Goods are easier to buy, it becomes much easier for consumers to compare prices and the Euro is a currency which is widely accepted around the world.
Reasons for Sweden not to be part the Euro
The main reason against Sweden not joining the Euro is that the European Monetary Union will have control over the decisions made concerning the banks and the monetary policy. The central bank of Sweden, the “Riksbank” currently has this control.
Lars Jonung wrote in his report that when the Swedes said no to the Euro, they chose to keep their currency “based on a floating exchange rate combined with inflation targeting by the Riksbank”.
This could be used as a strategy to support their export during difficult times, but it only provides a short period of safety, as these problems will arise in the long run anyway.
Another disadvantage which Jonung mentions is that Sweden will lose power because they will have to follow and respect the decisions and rules of the European Central Bank, instead of the Swedish Riksbank. However, with the introduction of the Euro, Sweden will gain power inside the European Union as it would become a more prominent member and have a more active role. He says that with the Euro, Sweden has the opportunity to “be able to influence policies to a larger extent as a member of the euro area than as an outsider”
There are lots of economic, political and social benefits for Sweden in joining the Euro, as I have already mentioned. The problem at the moment seems to be one of tradition, and the Swedes being too proud to change what they believe is their heritage. If Sweden were to join the Euro the people would see the benefits in only a short space of time and it would definitely be a change which would be for the better.
Adapted from a piece of work by Monique Rozeman
