• Sweden edition
 
Euro off Swedish agenda ten years after vote

Euro off Swedish agenda ten years after vote

Published: 13 Sep 2013 16:32 GMT+02:00
Updated: 13 Sep 2013 16:32 GMT+02:00

On September 14, 2003, Swedes went to the polls to cast their vote on whether or not to abandon the krona and take a first step toward joining the euro.

Campaigns run by both the "yes" and "no" side of the debate raged for months, and broke down largely along ideological lines.

While the Moderates, Liberal Party (Folkpartiet), and the Christian Democrats supported a vote in favour of adopting the euro, the Centre Party, the Greens, and the Left Party pushed for Sweden to retain the krona.

Meanwhile, the Social Democrats who were in power at the time found themselves split, with some factions of the party in the "no" camp, while others, led by then Foreign Minister Anna Lindh, beating the drum for Sweden to join the euro.

Lindh's killing on September 11th, 2003, just days before the referendum vote, put a stop to further campaigning and left analysts wondering how her untimely death, which overshadowed the referendum, might affect its outcome.

When all the votes were tallied, it was clear that Swedes were in no mood to join the newly established European currency, with 55.9 percent voting "no" while only 42 percent voting yes.

Per Altenberg, a Liberal Party member and supporter of the euro both then and now, believes the timing of the referendum likely didn't help its chances of passing in 2003.

"Maybe if the vote had been a couple of years later, the outcome would have been different," he tells The Local, adding there were several factors that led Swedes to vote no.

"In part it was probably also because the 'yes' campaign wasn't run very well."

But in the wake of the debt crisis which has shaken the confidence of many staunch supporters of the common European currency, Altenberg says it will likely be a long time before Swedes face another referendum on the joining the euro.

As the eurozone crisis raged in late 2011, Foreign Minister Carl Bildt of the Moderate Party hinted that Sweden would hold a referendum "within a few years" or risk losing influence in policy decisions that would ultimately affect Sweden's economy.

Furthermore, journalists PM Nilsson and Annika Nordgren Christensen argued on the Newsmill opinion website last year that Finance Minister Anders Borg's policies have been designed to adapt the Swedish economy to joining the single currency in the future. Indeed, they argue that Sweden has been better than almost any euro member in sticking to the terms of the Stability and Growth Pact.

SEE ALSO: Get the latest exchange rates and transfer money on The Local's Currency page

But in May 2013, prominent Moderates MPs Sofia Arkelsten and Hans Wallmark emphasized that Sweden should only consider joining the euro if the currency union was "well-functioning" and "the countries who share in the common currency implement responsible economic policies".

Opinion polls carried out in the last couple of years consistently show Swedes' support for the euro is falling, and Altenberg finds himself in the minority when it comes to his continued belief that the euro has a future in Sweden.

He admits that reforms are necessary before it even makes sense to ask the question a second time.

"At this point, I'm not in favour of a new referendum. We need to wait at least until they come up with a political framework for dealing with sovereign defaults," he says, referring to one of many eurozone reforms up for debate.

"Once it can be demonstrated that the eurozone can deal with defaults without costing taxpayers, then I think Swedes may have more confidence in the euro."

While acknowledging he has "less confidence in European political leaders to make the right decisions" following the euro crisis, Altenberg still believes Sweden has much to gain by giving up the krona in favour of the euro.

"The perception is that we haven't been affected that much by being outside the euro. But being outside the euro has left us in a weaker position than we would have been in otherwise," he says.

As a small, export-oriented economy heavily dependent on trade, Sweden would have benefited from increased trade and investment had it adopted the euro, argues Altenberg.

"I don't think the negative effects of losing control of our monetary policy would be sufficiently strong to offset the benefits," he argues.

But Jonas Ljungberg, a professor at the Department of Economic History at Lund University, counters that the risks that come with giving up the power to set interest rates shouldn't be underestimated.

"A 'one-size-fits-all' approach to interest rates doesn't work in the eurozone. The countries are simply too different," he tells The Local.

Ljungberg contends that the entire euro project is flawed as the eurozone doesn't correspond to an optimal currency area that is set up to reap the benefits of having a common currency.

"You end up with some countries following the European Central Bank (ECB) that have their interest rates too low, which can lead to the sort of real estate bubbles that hit Spain and Ireland," he explains.

"While in Germany interest rates are likely too high and this leads to deflation and falling wages."

He cites calculations carried out by Lars E. O. Svensson, a former Riksbank deputy governor, that tried to quantify the costs of euro membership to the Swedish economy.

"He found that Sweden stood to lose 50,000 jobs if the ECB rate was a half-point too high," says Ljungberg. "Sweden would not have benefited from joining the euro. Rather, I think Sweden has benefited by staying out."

He credits Swedish voters for "not being swayed by the arguments of the elite" who campaigned in favour of euro membership back in 2003.

"The elite were very dismissive of the concerns and arguments of the rest of the public," he says. "It's not enough to just say that only people who are uneducated are against joining."

The eurozone crisis hasn't help boost Swedes' confidence in the common European currency, perhaps exacerbating a latent "hesitation about handing too much power to Brussels of Frankfurt", says Ljungberg.

Up until 2009, support for the euro among Swedes hovered around 40 percent, with just over half of those polled saying they were against joining.

But ever since early 2010, support for the euro has plummeted. In May 2013, a poll by the SOM Institute in Gothenburg revealed only nine percent of Swedes were in favour of joining the euro.

"I think a large part of the present resistance among Swedes toward the euro is due to the crisis," says Ljungberg.

He also believes the eurozone needs major reforms in order to return to growth and that Swedes won't likely warm to the idea of joining the euro until then.

And even if the eurozone manages to right itself and become an engine for growth, he doesn't see the matter being put to a vote in Sweden "for at least five years", adding that in the end it is "political realities that decide".

Altenberg agrees that politics are paramount in any discussion about another Swedish referendum on the euro.

"Much also has to do with the perception of who the Swedish economy is doing relative the other economies in Europe," he says.

"If we suffered a new banking crisis or a housing market crash, for example, that could change people's views about the merits of joining the euro."

SEE ALSO: In Pictures - Sweden's new coins: Sun, wind and water

David Landes

Follow David Landes on Twitter

Your comments about this article

Today's headlines
Opinion
'Why were we kept in the dark for years?'
The submarine hunt is now in it's sixth day. Photo: TT

'Why were we kept in the dark for years?'

Military expert Johanne Hildebrandt tells The Local that the biggest question in the Stockholm submarine hunt hasn't been answered yet - why don't we know more about the "other operations" from the last few years? READ  

The Local List
Eight things to love about renting in Sweden
Apartments in Sweden are compact. Photo: Shutterstock

Eight things to love about renting in Sweden

A housing crisis means that short-term sublets are the norm in major cities and rent regulation rules are frequently flouted. But this week, The Local's decided to look on the bright side of renting an apartment in Sweden. READ  

Business & Money
Nordea banks big third-quarter profit gain
Nordea's Chief Executive Christian Clausen. Photo: TT

Nordea banks big third-quarter profit gain

Swedish bank Nordea announced on Wednesday a sharp rise in third quarter profits despite the economic slowdown and major outlays for an IT overhaul. READ  

National
Knutby priest faces early release from prison
Knutby in eastern Sweden, the scene of the murder. Photo: TT

Knutby priest faces early release from prison

A former priest in eastern Sweden who was sentenced to life in prison for organizing the murder of his wife has had his sentence reduced. READ  

Opinion
'Sweden will see Russia as a threat again'

'Sweden will see Russia as a threat again'

The Local speaks to one of Europe's leading security experts about why social media meant the Swedish military couldn't keep their 'submarine' search a secret and how she believes the country will ramp up its security against Russia. READ  

Interview
'Swedes are funnier than they think'
Comedian Al Pitcher has launched his new tour. Photo: www.alpitcher.com

'Swedes are funnier than they think'

New Zealand-born Al Pitcher launched his new comedy show in Stockholm this week. There wasn't a dull moment as The Local phoned up the man who has become one of Sweden's hottest comedians, while he took an eventful stroll in the capital. READ  

National
Stockholm suicide bomb investigation closes
The suicide bombing took place in 2010. Photo: TT

Stockholm suicide bomb investigation closes

Sweden's Security Service (Säpo) has announced that it will stop its core investigation into a suicide bombing in Stockholm four years ago. READ  

Stockholm 'sub hunt'
Military heads into 'new phase' in sub search
The search for the missing 'submarine' is now in its sixth day. Photo: TT

Military heads into 'new phase' in sub search

A press conference on the search for a suspected foreign vessel in Swedish waters revealed that the Armed Forces would be heading into a "new phase" on Wednesday, although it remained unclear what that might involve. READ  

Lifestyle
Vasa ship cannon blasted in Sweden
The bronze replica cannon. Photo: Beth Dacey.

Vasa ship cannon blasted in Sweden

A replica of one of the cannons present on Stockholm's iconic Vasa warship when it sank in 1628 is being tested for the first time in central Sweden. READ  

Health
Swedish farmers contracted swine flu
Swine flu can spread between pigs and humans. Photo: TT

Swedish farmers contracted swine flu

A human strain of the swine flu virus normally only found in pigs was discovered in Sweden earlier this year, the country's Public Health Agency has revealed. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Get 20% off unique Swedish homeware
Blog updates

21 October

Denna & den här (The Swedish Teacher) »

"?Denna? or ?den hr?? Swedish language students often ask question about different pronouns. One pronoun that especially..." READ »

 

19 October

Getting it (Blogweiser) »

"Follow Joel Sherwood on FB Few watch baseball in Sweden. This is excellent when your team loses..." READ »

 
 
 
National
Dentist gives free care to Roma beggars
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
Gallery
People-watching: October 19th
TT
Society
QUIZ: How good is your Swedish?
Lifestyle
What's on in Sweden: October 17th - 24th
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
What's on in Sweden: October 10th - 17th
National
Stockholm is 'best' region for well-being
Gallery
People-watching: October 8th
National
Five facts to know about Patrick Modiano
Society
My Swedish Career: A French fashionista in Sweden
Society
Swede's anti-bully Facebook tale goes viral
Society
Have you seen Sweden's viral subway cancer campaign?
National
Isis: Swedes linked to Turkish prisoner swap
National
Should Swedes be banned from buying sex abroad?
Gallery
Fredrik Reinfeldt's leaving presents
National
Five Swedish TV shows you shouldn't miss
Gallery
A tool belt, a casserole, and a book. Fredrik Reinfeldt's parliament gifts
TT
Lifestyle
Top five winter festivals in Sweden
TT
National
Sami reindeer herders win mine reprieve
Gallery
Property of the Week: Gamla Enskede
Sponsored Article
How to catch the first lobster of the year
Politics
Ten new minister faces you should know
Tech
First womb transplant baby in world born in Sweden
Gallery
People-watching: October 5th
National
What's on in Sweden
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

999
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN