Sweden is getting closer to the euro

It is one of the few countries in the European Union that still does not use it, mainly for political reasons: but things are changing a bit also thanks to inflation

Sweden is one of the EU countries that has not yet adopted the euro: upon joining the union, all member states pledged to adopt it sooner or later, once a series of economic and institutional criteria were met. There were only two exceptions to this limitation: the United Kingdom and Denmark, which had been negotiating from the outset to join the European Union without intending to exchange currencies. In addition to these cases, today there are only six member states that do not yet have the euro as their currency: Bulgaria, Romania, Hungary, the Czech Republic, Poland and Sweden, in fact.

However, the Swedish case is somewhat unusual because – unlike other countries that still have their own national currencies – the economic conditions for adopting the euro would be present, while the political will would be lacking. In a somewhat polarizing referendum in 2003, most citizens voted not to adopt the single currency. While the country’s commitment to the EU is still valid and more binding than the result of the national referendum, the country has continued to hold onto its currency for several reasons since then, and according to opinion polls, Swedes have always remained against it. Entry of the country into the euro system. Things today are a little different, some assumptions as to why there was so much resistance They no longer exist Also, the country’s inflation leads many people to believe that there may be tangible benefits to adopting the euro.

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poll published by the Swedish Statistics Institute shows that in the event of a new referendum, 30.6 percent of Swedes would vote today to join the area of ​​countries adopting the euro, the so-called “eurozone”; 50.5 percent still oppose abandoning the Swedish krona, the country’s current currency. With such percentages, the euro would not have been adopted anyway, but the share of supporters of the single currency has never been so high since the beginning of the sovereign debt crisis in 2011-2012, when it reached an all-time low because of many European countries. The euro as a currency has been a target for speculation in the financial markets.

Bloomberg chart on the trend of attitudes in favor (in black) and against (in pink) for euro adoption, according to pollsters (in yellow undecided)

One of the reasons for the increase in supporters of the euro is that the Swedish krona has been around for a long time deserve less and less Compared to the euro and the dollar, which, on the contrary, are being strengthened thanks to the policies of raising interest rates pursued by central banks around the world to fight inflation.

In these cases, the small coins fail to hold their value, despite all the efforts of the Swedish Bank in the foreign exchange markets. And it is a problem for the Swedish economy: imported goods are becoming more and more expensive over time, because it takes more and more kroner to buy them in euros or dollars. At the same time, exports are becoming more competitive due to the need for fewer euros or dollars to buy goods in krone.

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However, the balance is unfavorable because Sweden imports the majority of consumer goods: the end result is that prices have also gone up thanks to an increasingly weak currency, and also because of all the reasons why it is going up everywhere in the world. Union last year.

The main premise of the euro aversion was based precisely on the strength of the crown. In the 2003 referendum, the majority of Swedes voted not to join the euro system because there was a general climate of confidence in the Swedish central bank and in the economic system: foreign trade was going very well, inflation was under control, and unemployment was lower. than the average for eurozone countries and growth prospects were promising.

In addition, the entire structure of economic cooperation policy within the eurozone was still under construction, and the fiscal rules of the Stability Pact were still seen as a kind of bureaucratic ballast (and in some ways they are still seen that way). After the 2003 referendum, the country put itself in a wait-and-see mode: it is known that sooner or later it will have to join the euro system but it is waiting for the best moment to do so. The current state of the Swedish economy, characterized by its increasingly weak currency and high inflation, could be a good ground.

Every two years, the European Central Bank prepares a report on the status of so-called “convergence parameters” in countries that have not yet adopted the euro: it monitors economic parameters, such as the state of public finances, and institutional parameters, such as the independence of the central bank and other regulatory and supervisory bodies. second latest reportDating back to last year, Sweden was fully compliant by all economic standards and the only reason for the incompatibility had to do with the regulation of its central bank, which the ECB had been asking it to change for years. It is an issue that will be resolved through reform, which however includes a specific political will.

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The report states that although the treaties “obligated Sweden to adapt national legislation for integration into the eurozone from 1 June 1998” over the years “no legislative action has been taken by the Swedish authorities to address the incompatibilities described in this and previous reports.”

– Also read: Stoltenberg says Sweden’s NATO membership is “completely possible” by July

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