• Sweden's news in English
 

Euro off Swedish agenda ten years after vote

13 Sep 2013, 16:32

Published: 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

Related links:

Your comments about this article

Today's headlines
More and more Swedish priests untie the knot
An increasing number of Swedish priests are getting divorced. Photo: Fredrik Sandberg/TT

More and more Swedish priests untie the knot

23 minutes ago

The total number of divorced Swedes is dropping as more couples appear to choose to stick together. But one surprising group is bucking the trend: priests.

Migrant crisis
Sweden sees summer rise in asylum seekers
Cecilia Lindén volunteers for the Al Tadamon network in Stockholm. Photo: Marcus Ericsson/TT

Sweden sees summer rise in asylum seekers

1 hour ago

More than ten thousand people applied for asylum in Sweden in August – the highest figure in a decade. Meanwhile, volunteer organizations report being flooded with donations for refugees as the scope of the crisis grows.

What's on in Sweden
Five fun events to make you laugh in Sweden
The circus is coming to town. Photo: Mats Bäcker/Underart/Cirkus Cirkör

Five fun events to make you laugh in Sweden

1 hour ago

Swedes are a surprisingly fun, as well as funny, bunch. Here are five events we hope will put a smile on your face as well as our regular interactive calendar of all the top events in Sweden this week.

Tax changes could cut costs for Swedish firms
Sweden is home to many of the world's successful startups, such as Spotify. Photo: Lars Pehrson/TT

Tax changes could cut costs for Swedish firms

20 hours ago

UPDATED: Swedish Enterprise and Innovation Minister Mikael Damberg has told The Local about his action plan to turn Stockholm into the top startup city in the world. But critics of his proposals say they are too vague.

Euro 2016
‘I get a kick out of doing things that hurt you’
Zlatan Ibrahimovic at the press conference on Wednesday. Photo: Pontus Lindahl/TT

‘I get a kick out of doing things that hurt you’

15 hours ago

Sweden's star striker Zlatan Ibrahimovic has caused a stir after mouthing off in a press conference when a Swedish journalist asked about his business interests, ahead of his national side's Euro 2016 qualifier with Russia.

Hairy Swedish panties sew up artist's reputation
The hairy knickers. Photo: Private

Hairy Swedish panties sew up artist's reputation

16 hours ago

A pair of knickers made from thousands of strands of human hair has knitted overnight success for its maker. Swedish craftswoman Nina Sparr tells The Local that her efforts mirror a traditional craft that has been popular in her family for centuries.

Former Swedish Saab bosses appear in court
Saab's former CEO Jan Åke Jonsson. Photo: Karin Olander/TT

Former Swedish Saab bosses appear in court

18 hours ago

Swedish car maker Saab's former CEO Jan Åke Jonsson and the firm's former head lawyer Kristina Geers have appeared in court in Vänersborg in west Sweden, accused of falsifying financial documents shortly before the company went bankrupt in 2011.

Secret anti-immigration blogger's name exposed
A file image of a Swede using the internet. Photo: Bertil Ericson/TT

Secret anti-immigration blogger's name exposed

21 hours ago

UPDATED: 'Julia Caesar', an anonymous right-wing blogger who has blasted Swedish journalists for writing an "epoch of lies" about the benefits of immigration, is herself a former reporter for Sweden's biggest broadsheet, Dagens Nyheter, according to a Swedish tabloid.

Plea for help in hunt for Swedish woman's killer
Ida Johansson, who was found dead on a running track in Upplands Väsby. Photo: Polisen

Plea for help in hunt for Swedish woman's killer

1 day ago

Swedish police have released a picture of the 21-year-old jogger murdered on a running track almost a month ago as her mother prepares to make a television appeal.

Swedish museum makes way for iconic train
The iconic Swiss locomotive. Photo: SBB

Swedish museum makes way for iconic train

1 day ago

Railway buffs in Sweden are on track for a treat as a rare Swiss locomotive is set to roll into a Swedish transport museum in the coming days to celebrate a century of electric trains in the Nordic country.

RECEIVE OUR NEWSLETTER AND ALERTS

National
VIDEO: Swedish longboarder builds dreams with viral film
National
Swedish billionaire blasted for 'lonely' Twitter rant
Gallery
Property of the week: Stuverum, Västervik
National
Swedish ship rescues 5,295 refugees
National
TIMELINE: Everything you need to know about the Julian Assange case
Blog updates

28 August

Editor’s blog, August 28th (The Local Sweden) »

"Hello readers, It was all glitz and glamour in Sweden this week as Stockholm Fashion Week got..." READ »

 

18 August

Preteritum eller presens perfekt? (The Swedish Teacher) »

"Hello everyone, It’s grammar time ! I got an interesting question about the past tense vs present..." READ »

 
 
 
Gallery
People-watching: August 28th-30th
National
'Sweden Democrats will run the country'
National
Swedish bin men hailed as heroes after rescuing doomed kitten
National
This Swedish teen was told she was 'too big' to be a model
Sponsored Article
'It gives you the guts to believe in yourself'
Gallery
People-watching: August 26th
Sponsored Article
Nine places where Stockholm needs more English
National
Rescued baby lemur gets new Stockholm home
National
Stockholm Fashion Week turns island into Mars
Gallery
Property of the week: Stora Essingen, Stockholm
National
Swedish crayfish thieves caught red handed by officers
National
Veil soon to be lifted on new Millennium sequel novel
Gallery
People-watching: August 21st - 22nd
Cecilia Larsson Lantz/imagebank.sweden.se
Presented by Stockholm Academic Forum
International students welcomed to Stockholm
National
The Bridge: What does the third season have in store?
National
Lucky escape for Swedes after 'dead' bear launches attack
National
Syrian asylum seeker comic: 'We don't prefer Sweden any more'
Lifestyle
Baby joy for Swedish crime queen and her wrestler boyfriend
National
Soldier accused of faking first Isis attack in Sweden
National
Fire alert as Sweden sizzles in summer heatwave
Gallery
People-watching: August 19th
National
Meet the Swede who is crazy for Norway’s mass killer
National
Swede's review of night in drunk tank goes viral
National
VIDEO: Swedish teen melts hearts with this incredible Idol audition
Society
What's a Swedish crayfish party?
National
UN: Sweden can't be left to shoulder migrant crisis alone
Gallery
Property of the week: Skogås, Huddinge
National
Men outstrip women for first time
Society
IN PICTURES: Wooden town resembles 'war zone' after huge fire
Gallery
People-watching: August 14th-16th
Sport
Swedish referee shuts viral Facebook page explaining his decisions
Business & Money
A studio in Stockholm or a castle in the countryside?
National
How did twelve skeletons end up beneath a Swedish castle?
Gallery
People-watching: August 12th
National
Millennium sequel author labelled 'grave robber'
National
Two metre long python stops traffic in Malmö
National
IN PICTURES: Shoppers pay tribute to Ikea stabbing victims
Technology
Danish 'monster' pulled out of Swedish waters
National
Bizarre baby baptism for hockey fan
Gallery
Property of the week: Löderup, Ystad
Sponsored Article
Getting pregnant the Swedish way
Sponsored Article
Outsourcing drives Apreel's Europe growth
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

3,165
jobs available
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:
psdmedia.se