• 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
Ebola crisis
Sweden pledges new aid to UN Ebola fund
Photo: TT

Sweden pledges new aid to UN Ebola fund

Sweden has offered a new sizeable contribution to the fund set up by UN chief Ban K-moon to fight the Ebola outbreak. READ  

Society
'Dark forces' target refugee hunting scheme
Photo: Lars-Göran Thuresson/Älgriket

'Dark forces' target refugee hunting scheme

The Swedish hunting association runs a project to encourage young asylum-seekers to learn about hunting, a move which has proved controversial among some far right groups. READ  

Business & Money
American sales squeeze Ericsson profits
Ericsson CEO Hans Vestberg presents the third-quarter earnings report at the company's headquarters in Kista. Photo: Janerik Henriksson/TT

American sales squeeze Ericsson profits

Swedish telecoms equipment maker Ericsson reported a decline in net profit in the third quarter despite an increase in sales, boosted by business in emerging markets. READ  

Interview
'Too many concerts feel the same'
Sofar hosts secret gigs in Swedish apartments. Photo: Sofar

'Too many concerts feel the same'

Kattis Bjork founded Stockholm's secret gig scene - Sofar - a year ago. The Local caught up with her as she prepared to celebrate the project's anniversary this weekend and revealed the concept will spread to other Swedish cities in 2015. READ  

Stockholm 'sub hunt'
Sweden calls off suspect submarine search
Ships are returning to shore in Sweden. Photo: TT

Sweden calls off suspect submarine search

The core search for a suspected foreign vessel in Swedish waters has been called off. The armed forces said they remained convinced foreign underwater activity had taken place but had not identified an intruder. READ  

Business & Money
US and Japan fuel surge for Volvo trucks
Ed Carbaugh prepares to install parts on a truck engine on an assembly line at Volvo Trucks' powertrain manufacturing facility in Hagerstown, Maryland, March 2014. Photo: Patrick Semansky/AP

US and Japan fuel surge for Volvo trucks

Sweden's Volvo, the world's second-largest maker of trucks, said Friday it saw a spike in profits in the third quarter, boosted by thriving sales in the US and Japanese markets. READ  

Inspectors attacked at rogue doc’s surgery
Cigarettes and beer photo: Shutterstock

Inspectors attacked at rogue doc’s surgery

Inspectors who were sent to shut down a doctor’s surgery in Gothenburg were physically attacked and fled the premises to get help from the police. READ  

Police turn Swede’s vodka into water
A Swede loads a car with alcohol in northern Germany. File photo: Drago Prvulovic/TT

Police turn Swede’s vodka into water

Swedish police say they will pay a man 16,000 kronor ($2,200) in damages after much of the alcohol they confiscated from him was stolen, while many of the bottles they returned were filled with water. READ  

Diplomacy
US to get first female ambassador in Sweden
File photo: Athena Center for Leadership Studies

US to get first female ambassador in Sweden

The United States Embassy in Stockholm is set to get its first female ambassador after the White House announced it was nominating the Iranian-American ex-investment banker Azita Raji to take over from Mark Brzezinski. READ  

Neo-Nazi attacks
Neo-Nazis cleared of knife attack on Nigerian
Police intervene after neo-Nazis attack an anti-Nazi rally in Kärrtorp, December 2013. Photo: Hampus Andersson/TT

Neo-Nazis cleared of knife attack on Nigerian

A Stockholm court has cleared three neo-Nazis of stabbing a Nigerian man in an unprovoked attack. But two of the men will face jail after they were convicted of racial agitation at a riot. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
Blog updates

24 October

Editor’s blog, October 24th (The Local Sweden) »

"Hi readers, Get ready to read our weekly digest of Swedish news in less than 60 seconds. The..." READ »

 

24 October

Is darkness weather? (Blogweiser) »

"I try very hard not to talk about the weather. This has come after a decade..." READ »

 
 
 
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
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
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

979
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