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Sweden and the euro

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Eurozone participation
European Union member states
(special territories not shown)
  20 in the eurozone
  1 in ERM II, without an opt-out (Bulgaria)
  1 in ERM II, with an opt-out (Denmark)
  5 not in ERM II, but obliged to join the eurozone on meeting the convergence criteria (Czech Republic, Hungary, Poland, Romania, and Sweden)
Non–EU member states
  4 using the euro with a monetary agreement (Andorra, Monaco, San Marino, and Vatican City)
  2 using the euro unilaterally (Kosovo and Montenegro)
All Telia payphones in Sweden accept euro

Sweden does not use the euro as its currency and has no plans to replace the krona.

Sweden joined the European Union in 1995 and its accession treaty obliged it to join the euro. However, one of the requirements for eurozone membership is two years' membership of ERM II, and Sweden has chosen not to join. While there is government support for membership, all parties have pledged not to join without a referendum in favour of doing so.

Despite this, the euro can be used to pay for many goods and services in Sweden.[citation needed]

2003 referendum

Main article: Swedish euro referendum, 2003

A referendum held in September 2003 saw 56.1% vote against membership. As a consequence, Sweden decided in 2003 not to adopt the euro for the time being. Had they voted in favour, Sweden would have adopted euro on 2006-01-01.[1]

Stockholms län and Skåne län gained more than 50% votes in favour adopting euro, all other regions in Sweden gained less than 50% in favour of adopting.[2]

Future plans

This ATM gives out both euro and kronor.

Most major political parties in Sweden, including the governing Alliance for Sweden (except the Centre Party), which won the 2006 election and the former governing Social Democratic party, are in principle in favour of introducing the euro. The Alliance for Sweden has stated they will not rerun the referendum, or even set a date for a rerun in their first term (which lasts until 2010).[citation needed]. Furthermore, as a result of negative poll results, the prime minister has said that a referendum is unlikely at all until there are positive polls, although he also said that when more neighbours use the euro, it will be more visible that Sweden doesn't.[3]

As a result of this, unlike most other member states that do not use the euro, Sweden has no set timetable for adoption.

On 24 October 2006, EU monetary affairs commissioner Joaquín Almunia stated that the European Union could theoretically take Sweden to court for not joining the euro despite meeting all the economic criteria, but that such an action would be neither necessary nor desirable currently.

Since the 2003 referendum, all opinion polls have shown a clear rejection of the euro, with around 50% of respondents saying "no", 40% "yes" and 10% uncertain. A typical poll from late November 2007 saw 52% against and 39% in favour,[4]. However, it has changed recently, with the latest one from December 2008 showed 44% yes, 48% no, 6% uncertain.[5]

The Sydsvenska Dagbladet reported on 26 November 2007 (a few days after the Danish Prime Minister, Anders Fogh Rasmussen, had announced plans to hold another referendum on abolishing Denmark's opt-outs including the opt-out from the euro) that the question of another euro referendum would be one of the central issues of the 2010 election in Sweden.[6] Swedish politician Olle Schmidt in an interview with journalists from the European Parliament when asked when Sweden will have good reasons to adopt the euro, he said "When the Baltic countries join the Euro: the whole Baltic Sea will be surrounded by Euro coins. Then the resistance will drop. I hope for a referendum in Sweden in 2010."[7] There are also hopes that Denmark will adopt the euro, and that it would give a more positive attitude in Sweden.[8]

The social democratic party leader Mona Sahlin, who according to polls is likely to be the prime minister of Sweden in 2010, said that a new refererendum is not wished even in the period 2010-2013, because the 2003 refererendum still counts.[9]

A debate whether or not to adopt the euro has started as a result of the financial crisis of 2008, but is not an intense debate. Even if no Swedish bank has yet had real problems, unlike some banks in the eurozone, the central bank rate in Sweden remains higher than the ECB rate. The value of the SEK has fallen from €0.107 on average years 2002-2007 to around €0.091 in December 2008.

Swedish euro coins

There are no designs for Swedish euro coins. It was reported in the media that when Sweden changed the design of the 1-krona coin in 2001 it was in preparation for the euro. A newer portrait of the king was introduced. The 10-krona coin already had a similar portrait. This in fact is from a progress report by the Riksbank on possible Swedish entry into the euro, which states that the lead in time for coin changeover could be reduced through using the portrait of King Carl XVI Gustaf introduced on the 1 and 10 krona coins in 2001 as the national side on Swedish 1 and 2 euro coins.[10]

Only the national banks can manufacture valid coins by the law of Sweden. Some private collection mint companies have produced Swedish euro coins, claiming that they are copies of test coins made by the Riksbank,[11] but this is not true and they have nothing to do with Swedish euro coins, which do not exist.[citation needed] Swedish euro coins will not be designed or issued without a firm timetable for adoption.

Usage today

Shop in Stockholm that accepts Euro.

A large number of shops, hotels and restaurants accept euro, but cash only. This is especially common in some border cities.

Haparanda

The only city near the eurozone is Haparanda[clarification needed], where almost all shops accept euros as cash and often display prices in euros. The town's budget is presented in both currencies.[12] Because of bank rules,[citation needed] credit cards are debited in kronor only.[citation needed]

Some municipalities, especially Haparanda, wanted to have euro as an official currency,[13] and, for example, pay salaries in euros to employees from Finland. However, this is illegal due to tax laws and salary rules.

Höganäs

The town of Höganäs fully adopted the euro on 1 January 2009. From that date, all residents can use either kronor or euros in restaurants and shops, as well as in payments of rent and bills. Dual pricing is used everywhere and ATMs dispense either currency without additional charge. Around 60 percent of stores in the town are reported to have signed up to the scheme and local banks have developed guidelines to accept euro deposits.[14] This decision was approved and agreed by municipality of Höganäs.[15]

Höganäs has developed a special euro logo for the city.

Helsingborg and Stockholm

Double prices are common in Helsingborg and Stockholm.[citation needed]

The euro is present in some elements of Swedish law. For example, an EU directive states that all transactions in euros inside the EU shall have the same fees as euro transactions within the country concerned.[16][17] The Swedish government has made an ammendment[18] which states that the directive also applies to SEK transactions. This means, for example, that euros can be withdrawn without fees from Swedish banks at any ATM in the eurozone, and that SEK+EUR transfers to bank accounts in the European Economic Area can be done over the internet without a sending fee. The receiving banks can still sometimes charge a fee for receiving the payment, though, although the same EU directive typically makes this impossible for EUR transfers to Eurozone countries. This is different from e.g. Denmark where banks are required to set the price for international EUR transactions within the EEA to the same price as for domestic Danish EUR transactions (which doesn't have to be the same as the price for Danish domestic DKK transactions). However, banks in Sweden still decide the exchange rate, and so are able to continue charging a small percentage for exchanging between SEK and EUR when using card payments. It is also now possible for stockholding (limited) companies to have the euro as their official currency.[19][20]

See also

References

  1. ^ "Heikensten: The Riksbank and the euro". Sveriges Riksbank. 17/06/2003. Retrieved 2008-12-26. {{cite web}}: Check date values in: |date= (help)
  2. ^ "Sweden. Euro Referendum 2003". Electoral Geography. Retrieved 2008-12-26.
  3. ^ "Glöm euron, Reinfeldt" (in Swedish). Aftonbladet. 2007-12-02. Retrieved 2008-12-26.
  4. ^ "Majority of Swedes remain opposed to euro". People's Daily Online. December 03, 2007. Retrieved 2008-12-26. {{cite web}}: Check date values in: |date= (help)
  5. ^ "Swedish support for joining eurozone swells as krona shrivel". Euro Information Website. 2008-12-03. Retrieved 2008-12-26.
  6. ^ "Denmark and Sweden on the path to the euro?". Courrier international. Retrieved 2007-11-26.
  7. ^ "The strengthening Euro - is it good or bad for Europe's economy?". European Parliament. 02-07-2008. Retrieved 2008-12-26. {{cite web}}: Check date values in: |date= (help)
  8. ^ Henrik Brors (2007-11-22). "Utspelet kan höja temperaturen i den iskalla svenska EU-debatten" (in Swedish). Dagens Nyheter. Retrieved 2008-12-23.
  9. ^ "Intresse för euro i Sverige och Danmark" (in Swedish). Rundradion Ab. 2008-11-02. Retrieved 2008-12-26.
  10. ^ "The Euro in the Swedish Financial Sector – Banknotes and Coins" (PDF). Sveriges Riksbank. September 2001. Retrieved 2008-12-26.
  11. ^ "Swedish Euro Coins?". Chard Limited. Retrieved 2008-12-26.
  12. ^ "The introduction of euro banknotes and coins: one year on". Europa. 29.6.2006. Retrieved 2008-12-26. {{cite web}}: Check date values in: |date= (help)
  13. ^ "Swedish mayor wants to abolish the kronor". EUobserver. 20.12.2001. Retrieved 2008-12-26. {{cite web}}: Check date values in: |date= (help)
  14. ^ http://www.thelocal.se/16692/20090102/
  15. ^ Anette Rantala (5 September 2008). "Euron blir gångbar valuta i Höganäs" (in Swedish). Helsingborgs Dagblad. Retrieved 2008-12-26.
  16. ^ "Lag (1999:268) om betalningsöverföringar inom Europeiska ekonomiska samarbetsområdet" (in Swedish). Sveriges riksdag. 1999-05-12. Retrieved 2008-12-26.
  17. ^ "EU directove language=English". {{cite web}}: Missing pipe in: |title= (help)
  18. ^ "Lag (2002:598) om avgifter för vissa gränsöverskridande betalningar" (in Swedish). Sveriges riksdag. 2002-06-13. Retrieved 2009-01-08.
  19. ^ "Lag (2000:46) om omräkningsförfarande vid beskattning för företag som har sin redovisning i euro, m.m." (in Swedish). Sveriges riksdag. 2000-02-10. Retrieved 2008-12-26.
  20. ^ "Aktiebolagslag (2005:551)" (in Swedish). Sveriges riksdag. 2005-06-16. Retrieved 2008-12-26.
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