• 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

Don't miss...X
Left Right

Your comments about this article

Today's headlines
Sweden worst in EU at getting foreigners jobs
Photo: Henrik Trygg/Imagebank Sweden

Sweden worst in EU at getting foreigners jobs

Swedish citizens are the most likely to be employed in the EU, but Sweden is among the very worst when it comes to getting non-EU citizens into work. READ  

Man arrested for burning partner's face
Photo: Linn Malmén/TT

Man arrested for burning partner's face

Police suspect that a man in western Sweden is responsible for the extreme burns on his partner's face. The man has been arrested on suspicion of aggravated assault - and potentially attempted murder. READ  

In Pictures: Conchita Wurst in Stockholm
Photo: Maja Suslin/TT

In Pictures: Conchita Wurst in Stockholm

Eurovision winner and LGBTQ idol Conchita Wurst is in Stockholm this week for Stockholm Pride - and joined Swedes at Skansen for a colourful summer sing-along. READ  

Stockholm holds colour contest for new metro
Photo: Joel Bagon

Stockholm holds colour contest for new metro

Stockholm's new metro line is not set for preliminary construction until 2016, and will not be completed until 2022 - but Swedes already have the chance to vote for the new line's colour. READ  

Sweden's heat wave officially over

Sweden's heat wave officially over

The heat wave that swept over Sweden recently has finally passed, meteorologists reported on Wednesday, promising cooler and more autumnal temperatures around the corner. READ  

Ukraine rebels release kidnapped Swede
Rebel tanks on the road to Horlivka in June. Photo: TT

Ukraine rebels release kidnapped Swede

The Swede who was kidnapped by pro-Russian rebels has been released after nearly three weeks of being held hostage - although no one knows where he is now. READ  

Stockholm Pride 2014
Stockholm Pride bars Sweden Democrats
Photos: Henrik Montgomery/Fredrik Persson/TT

Stockholm Pride bars Sweden Democrats

While a record number of ministers and party leaders will participate in the Stockholm Pride Parade this year, there are notable exceptions - including SD leader Jimmie Åkesson, who is not only 'uninterested' but banned. READ  

Gender neutral 'hen' enters dictionary
Soon 'hen' will be found on this page. Photo: The Local

Gender neutral 'hen' enters dictionary

The ever-controversial pronoun 'hen' has won its battle and is set to officially become part of the Swedish language. READ  

Pines, polska and magic: Urkult Music Festival
Photo: Danny Chapman/The Local

Pines, polska and magic: Urkult Music Festival

The Urkult music festival in northern Sweden may be less sex, drugs and rock'n'roll and more family fun, chai and polska dancing - but Danny Chapman says it’s one of the most magical Swedish experiences he has had. READ  

Presented by Stockholm Business Region
Introducing... ID cards and permits in Stockholm
You want one of these. Photo: Skatteverket

Introducing... ID cards and permits in Stockholm

When it comes to data-driven life, from daycare to healthcare, Sweden is in a league of its own. Above all, your personal number is the key that unlocks life in Stockholm. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Stockholm Pride: Allsång på Skansen with Conchita Wurst
Skatteverket
Sponsored Article
Introducing... ID cards and permits in Stockholm
Gallery
People-watching, June 26th - 28th. Get inside Stockholm's hottest nightclubs
Gallery
Top ten Swedish taboos
Society
Seven-year-old Swede cycles to Berlin
Blog updates

27 July

Approaching Stockholm (Around Sweden in a kayak) »

"I woke up in the comfort of my own little cabin on Eva and Rolf’s boat, it was 7:30am and I was feeling a bit groggy after a couple of beers with all the lovely locals the night before. The previous day had really taken its toll on my body and I was very stiff and..." READ »

 

24 July

Sharing our Pride: Celebrating Love & the LGBT Community! (Stockholm in my American Heart) »

"It’s mid- July in Stockholm, and with much of the city on vacation, things can seem a little quiet – the streets, the bus, and the grocery store. One thing that has not paused for a summer break, though, is preparation for Stockholm’s Pride Festival, which will take place from July 28 to August 2...." READ »

 
 
 
Politics
'Gaza conflict needs help, not empty rhetoric'
Society
Swedes voted 'most beautiful' in the Nordics
Business & Money
Sweden demands EU clarity on Bitcoin tax
National
Swedish organic sales enjoy 'amazing' growth
Photo: Johan Nilsson/TT
Society
What's On in Sweden
Gallery
People-watching July 23
National
Swedish cops elect not to shoot 'angry elks'
Business & Money
New alcohol retail rules threaten micro-breweries
Gallery
People-watching Båstad
Business & Money
Sweden falls to third in global innovation index
Society
Swedish ornithologists keep webcam watch
Photo: Andreas Nordström/Image Bank Sweden
Gallery
Top ten Swedish beach hot spots
Tech
Swedish Wiki vet sets new content record
Photo: Fastighetsbyrån
Lifestyle
In Pictures: The Local's Property of the Week
Photo: Finest.se
Gallery
People-watching July 15-16
Photo: Ola Ericson/Image Bank Sweden
Society
What's On in Sweden
Photo: Lisa Mikulski
National
Hope springs eternal for expat pet shop owner
Gallery
Princess Estelle steals limelight at mum's birthday
National
Swedes risk infants' lives by covering up prams
Sponsored Article
Introducing... Your finances in Stockholm
Sponsored Article
Introducing... Housing in Stockholm
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

734
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
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
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