• 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
Boy receives cancer vaccine by mistake
Photo: Hasse Holmberg/TT

Boy receives cancer vaccine by mistake

A boy scheduled to be vaccinated against mumps, measles, and rubella instead received a vaccine against cervical cancer. His family has now reported the blunder for inspection. READ  

Sweden grants additional funds to jobs agency
Photo: Bertil Enevåg Ericson/TT

Sweden grants additional funds to jobs agency

The Swedish government has announced that it will increase funding to the jobs agency (Arbetsförmedlingen) in 2015, primarily to cover personnel costs but also to prevent long-term unemployment. READ  

Police 'powerless' against street racers
Police on E4 highway. Photo: Johan Nilsson/TT

Police 'powerless' against street racers

Stockholm police said they were powerless to react when streetracers took over at "insane speeds" on a large highway on Friday night. READ  

Saab carmaker wins receivership
Photo: Björn Larsson Rosvall/TT

Saab carmaker wins receivership

After initial rejection, a Chinese-owned company set up to take over Saab's assets after the troubled Swedish carmaker's bankruptcy said on Friday it had succeeded in being placed in receivership. READ  

Woman suffers cardiac arrest while giving birth
Photo: Tomas Oneborg/TT

Woman suffers cardiac arrest while giving birth

A 30-year-old woman went into cardiac arrest while giving birth at a Stockholm clinic - without hospital staff noticing that anything was wrong. She remains in a critical condition on Friday. READ  

Champions League
History repeats for Malmö fifty years later
Striker Magnus Eriksson during Malmö's 3-0 win over Salzburg in a Champions League qualifier. Photo: Björn Lindgren/TT

History repeats for Malmö fifty years later

Malmö's entry into the Champions League serves as a reminder of times gone by in European football. With Spain's champions bound for Sweden things just couldn't be better, writes contributor Lee Roden. READ  

Elections 2014
Löfven promises jobs to 50,000 young Swedes
Social Democrat leader Stefan Löfven. Photo: Fredrik Sandberg/TT

Löfven promises jobs to 50,000 young Swedes

Social Democrat party leader Stefan Löfven announced on Friday his "most important election promise", a 90-day job guarantee programme for young Swedes. READ  

 Sweden to buy fighter jets despite Swiss pullout
The Jas Gripen fighter aircraft. File photo: Wikimedia

Sweden to buy fighter jets despite Swiss pullout

Sweden said Friday it would go ahead with the purchase of a new generation of Saab Gripen fighter jets, despite Switzerland pulling out of a major co-financing deal. READ  

Three hurt after northern knife attack

Three hurt after northern knife attack

Three people are in hospital after they were stabbed during what police suspect was a gang-related attack in Umeå. READ  

Stockholm 'thief' turns out to be trainee ninja

Stockholm 'thief' turns out to be trainee ninja

Stockholm police rushed to the scene when a worried Swede reported that their neighbours were the victim of a break-in - but when officers arrived, they found nothing but a ninja in the middle of practice. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching August 27
Gallery
Top ten false friends in Swedish
National
Roma advocate scoops Wallenberg prize
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Blog updates

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 

25 August

The Dollar Store (Blogweiser) »

"A dollar store in Sweden. Blog post: http://t.co/tNuuvcP1q0 #USD #greenbacks #sweden #sverige pic.twitter.com/RHFAYf7U1k — Joel Sherwood (@joeldsherwood) August 23, 2014 There’s a chain here in Sweden called The DollarStore. This name always stood out to me in a country where they don’t use dollars. I went there for the first time this weekend. They actually accepted greenbacks..." READ »

 
 
 
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Politics
Sweden elections: How do they work?
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Sponsored Article
Find out what gives this Swedish school executive appeal
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

775
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