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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)

Sweden does not currently use the euro as its currency and has no plans to replace the krona in the near future. Sweden is obliged under the Treaty of Maastricht to adopt the euro at some point in the future.[1] Under the 1994 Treaty of Accession Sweden has to join the eurozone once it meets the necessary conditions.[2] Sweden maintains being part of ERM II is a required criterion and joining ERM II is voluntary,[3][4] giving Sweden a de facto opt out.

Status

SEK-EUR exchange rate since 1999

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 this mechanism and as a consequence tie its exchange rate to the euro ±2.25%. While there is government support for membership, all parties have pledged not to join without a referendum in favor of doing so.

The Swedish krona is floating freely against other currencies, and no effort to stabilize the exchange rate is made by Sveriges Riksbank.

The EU has accepted that Sweden is staying outside the eurozone on its own decision. Olli Rehn, the EU commissioner for economic affairs has said that this is up to Swedish people to decide.[5]

Despite this, the euro can be used to pay for goods and services in some places in Sweden.

Sweden meets three of five criteria.[citation needed]

Convergence criteria
Inflation rate 1 Government finances ERM II membership Long-term interest rate 2
annual government deficit to GDP gross government debt to GDP
Reference value 3 max 1.0% max 3% max 60% min 2 years max 6.0%
 Sweden 2.1% 2.1% 4 42.6% – 3.3%
  criteria fulfilled
  criterion not fulfilled

1 No more than 1.5% higher than the 3 best-performing EU member states.
2 No more than 2% higher than the 3 best-performing EU member states.
3 Values from May 2010 convergence report of the European Central Bank, to be updated at least every two years.
4 Negative value is a surplus.

History

Early monetary unions in Sweden (1873–1914)

All Telia payphones in Sweden accept euros

On 5 May 1873 Denmark with Sweden fixed their currencies against gold and formed the Scandinavian Monetary Union. Prior to this date Sweden used Swedish riksdaler. In 1875 Norway joined this union. An equal valued krona of the monetary union replaced the three legacy currencies at the rate of 1 krona = ½ Danish rigsdaler = ¼ Norwegian speciedaler = 1 Swedish riksdaler. The new currency (krona) became a legal tender and was accepted in all three countries – Denmark, Sweden and Norway. This monetary union lasted until 1914, when it was brought to an end by World War I. As of 2012, the names of the currencies in each country have remained unchanged.

Joining the European Union

In 1995 Sweden joined the EU and its Accession Treaty[6] has been approved in Sweden by referendum (52% in favour of the treaty). According to the treaty Sweden is obliged to adopt the euro once it meets convergence criteria.

2003 referendum

Main article: Swedish euro referendum, 2003

A referendum held in September 2003 saw 56.1 percent vote against membership of the eurozone. As a consequence, Sweden decided in 2003 not to adopt the euro for the time being. Had they voted in favor, Sweden would have adopted euro on 1 January 2006.[7]

A majority of voters in Stockholm county voted in favor of adopting the euro (54.7% "yes", 43.2% "no"). In Skåne county the people voting "yes" (49.3%) outnumbered the people voting "no" (48.5%), although the invalid and blank votes resulted in no majority for either option. In all other polls in Sweden, the majority voted no.[8][9]

Usage today

IKEA in Haparanda, the base for the shopping center which attracts many Finns.
File:Sweeden euro locations.png
Haparanda
Haparanda
Höganäs
Höganäs
Helsingborg
Helsingborg
Malmö
Malmö
Pajala
Pajala
Övertorneå
Övertorneå
Sollentuna
Sollentuna
Stockholm
Stockholm
class=notpageimage|
Cities and municipalities discussed in this section.
Shop in Stockholm that accepts euros, in the tourist district. Signs like this one are not so common in Stockholm.
This ATM gives out both euros and kronor.

Many stores, hotels and restaurants accept euros. This is especially common in some border cities. Shops especially oriented towards foreign tourists are more likely to accept foreign currencies (such as the euro) than other shops.

Municipalities

Official currency status

Matters such as official currency status and legal tender issues are decided by the Swedish parliament, and the euro is not an official currency of any part of Sweden. Nevertheless, politicians from some municipalities (see below) have claimed that the euro is an official currency of their municipalities. This means that the municipality has made an agreement with many shops that they should accept euros (in cash and credit cards[10]). However this is not mandatory for the stores and the status as "official currency" is mostly a marketing device rather than a legal mandate.

Haparanda

The only Swedish city near the eurozone is Haparanda,[11] where almost all stores accept euros as cash and often display prices in euros. Haparanda has become an important shopping city with the establishment of IKEA and other stores. 200,000 Finns live within 150 km distance.

Some municipalities, especially Haparanda, wanted to have the euro as a legally official currency,[12] and, for example, pay salaries in euros to employees from Finland. However, this is illegal due to tax laws[citation needed] and salary rules.

Haparanda's budget is presented in both currencies.[13] Haparanda has a close cooperation with the neighbor city of Tornio, Finland.

Höganäs

The town of Höganäs claimed itself to having adopted the euro for stores on 1 January 2009.[14] From that date, all residents can use either kronor or euro in restaurants and stores, as well as in payments of rent and bills. Dual pricing is used at many places and ATMs dispense either currency without additional charge (the latter is law all over Sweden). 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.[15] This decision was approved and agreed by municipality of Höganäs.[16] Höganäs has developed a special euro logo for the city. It is not a law in Höganäs, just a recommendation. This has been a rather successful PR coup, with good coverage in news papers, and it has been referred also in foreign newspapers.[17]

Helsingborg and Malmö

Some shops accept euros, and price tags in euros exist in some tourist oriented shops, as in more cities in Sweden. Acceptance of and price tags in Danish kroner are probably more common.

Pajala and Övertorneå

The Pajala and Övertorneå municipalities have borders to Finland (and thus to the eurozone). The euro is often accepted in shops and sometimes shown on price tags, but there is no official adoption of the euro from the municipality point of view. However, there was a political proposal to officially adopt the euro in Pajala.[18][19] Mining industry has started in Pajala, with close cooperation with nearby mines in Finland.

Sollentuna

There was a political proposal in June 2009 from a party in the Sollentuna municipality, that the municipality should adopt the euro as its parallel currency in 2010 (but again, see the section about official currency status above).[20][21] This appears not to have taken effect, because it has not been mentioned after the media buzz in June 2009.[22]

Stockholm

Stockholm is the most important tourist city in Sweden, measured as the number of nights spent by tourists. Some tourist-oriented shops accept euros, although there is no official policy from the municipality. Taxi services in Stockholm can be paid in euros.[23] In 2009 there was a rejected political proposal to officially introduce the euro in Stockholm.[20]

Cash machines

Some cash machines may dispense foreign currency. Usually the euro is the foreign currency dispensed, but sometimes British pounds, US dollars, Danish kroner or Norwegian kroner are dispensed instead. All of these cash machines also dispense Swedish kronor. Most of these cash machines are located in major cities, international airports and border areas.

Presence of the euro in Swedish law and bank system

The euro is present in some elements of Swedish law, based on EU directives. 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.[24][25] The Swedish government has made an amendment[26] which states that the directive also applies to krona-based transactions. This means, for example, that euros can be withdrawn without fees from Swedish banks at any ATM in the eurozone, and that krona- and euro-based 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 euro-based transfers to eurozone countries. This is different from, for example, Denmark where banks are required to set the price for international euro transactions within the EEA to the same price as for domestic Danish euro transactions (which does not have to be the same as the price for domestic Danish krone transactions). However, banks in Sweden still decide the exchange rate, and so are able to continue charging a small percentage for exchanging between kronor and euros when using card payments.

It is also now possible for limited companies (companies limited by shares) to have their accounts and share capital denominated in euros.[27][28]

Plans

Most major political parties in Sweden, including the governing coalition Alliance for Sweden (except the Center Party), which won the 2006 election and the former governing Social Democratic party, are in principle in favor of introducing the euro.

The social democratic party stated in August 2011 that they write off a Swedish eurozone membership during a foreseeable future, for decades.[29]

The effect of a Danish referendum

The Sydsvenska Dagbladet reported on 26 November 2007 (a few days after the former 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.[30]

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."[31]

The social democratic party leader Mona Sahlin has stated that a new referendum will not occur in the period 2010–2013, because the 2003 referendum still counts.[32]

2009 European elections

"Ja till euron" slogan. Yes to the euro. Part of the 2009 European Parliament election campaign.

During the election campaign for the European Parliament elections, Liberal People's Party and Christian Democrats expressed interest to hold a second referendum on euro adoption. However, Moderate Party and Centre Party thought that the time was ill-chosen.[33]

New coins and notes

Swedish Riksbanken has established that Sweden is to change and expand the range of notes and coins, including new obverse, and potentially reverse, images featuring famous Swedes, as well as both a new 200-kronor note and a new 2-kronor coin.

Economic research

A recent economic study on the possible entry of Sweden in the eurozone has found that it would be likely to have a positive effect. The study of the evolution of the Swedish money market rates shows that they closely follow the euro rates, even during times of economic crisis. This shows that Sweden would not lose in terms of monetary policy autonomy, as the Swedish Central Bank already closely follows the rates set by the European Central Bank. When adopting the euro, Sweden would swap this autonomy on paper for a real influence on the European monetary policy thanks to the gaining of a seat in the ECB's governing council.

Overall, the study concludes that "staying outside of the eurozone implies forgone benefits that Sweden, a small open economy with a sizable and internationally exposed financial sector, would enjoy from adopting an international currency."[34]

Opinion polls

Since the 2006 election, negative poll results have led the prime minister to state that a rerun of the referendum is unlikely unless there are positive polls—although he also said that when more neighbours use the euro, it will be more visible that Sweden does not.[35]

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

Results

Polls on the question whether Sweden should abolish the krona and join the euro are regularly carried out, usually by the state statistics agency Statistiska centralbyrån. The results are always published in the press or online.

Date (survey taken) Date (when published) YES NO Unsure Number of participants Held by
May 2004 18 June 2004 37.8 % 50.9 % 11.3 % 7,046[36] SCB[36][37]
November 2004 15 December 2004 37.3 % 48.6 % 14.3 % 6,919[38] SCB[37][38]
May 2005 21 June 2005 39.4 % 46.4 % 14.2 % 6,985[39] SCB[37][39]
November 2005 20 December 2005 36.1 % 49.4 % 14.5 % 6,980[40] SCB[37][40]
May 2006 20 June 2006 38.1 % 48.7 % 13.2 % 6,870[41] SCB[37][41]
November 2006 19 December 2006 34.7 % 51.5 % 13.8 % 7,012[42] SCB[37][42]
24 March 2007 37 % 60 % 3 % Skop[43]
May 2007 19 June 2007 33.3 % 53.8 % 13 % 6,932[44] SCB[37][44]
November 2007 18 December 2007 35.0 % 50.8 % 14.2 % 6,922[45] SCB[37][45]
May 2008 17 June 2008 34.6 % 51.7 % 13.7 % 6,817[46] SCB[37][46]
November 2008 16 December 2008 37.5 % 47.5 % 15 % 6,687[47] SCB[37][47]
December 2008 44 % 48 % 7 % 1,006 SCB[48]
1 March 2009 45 % 51 % 4 % Skop[49]
19 April 2009 47% 45% 8% Sifo[50]
12 May 2009 51% 49% 0% 1,000 Novus Opinion[51]
25 May 2009 47% 44% 9% 1,000 Novus Opinion[52]
May 2009 23 June 2009 42.1 % 42.9 % 15.1 % 6,506[53] SCB[37][53]
November 2009 15 December 2009 43.8 % 42.0 % 14.2 % 6,398[54] SCB[37][54]
9 April 2010 37 % 55 % 8 % 1,004 Demoskop[55]
May 2010 15 June 2010 27.8 % 60 % 12.2 % 6,135[56] SCB[37][56]
November 2010 14 December 2010 28.9 % 58.2 % 12.9 % 6,192[57] SCB[37][57]
May 2011 15 June 2011 24.1 % 63.7 % 12.2 % 6,147[58] SCB[37][58]
November 2011 13 December 2011 11.2 % 80.4 % 8.4 % 5,907[59] SCB[59]

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-kronor 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-kronor coins in 2001 as the national side on Swedish 1- and 2 euro coins.[60]

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.[61] Swedish euro coins will not be designed or issued without a firm timetable for adoption. [citation needed]

See also

References

  1. ^ EU4Journalists.eu, Economic and Monetary Union and the Euro eu4journalists, accessed 8 January 2008
  2. ^ European Commission > Economic and Financial Affairs > The euro > Your country and the euro > Sweden and the euro
  3. ^ "Swedish Parliament EU Information". Swedish Parliament. 4 December 2009. Retrieved 16 January 2010.
  4. ^ "Information on ERM II". European Commission. 22 December 2009. Retrieved 16 January 2010.
  5. ^ Summary of hearing of Olli Rehn – Economic and Monetary Affairs
  6. ^ "European Union Agreement Details". Council of the European Union. Retrieved 7 November 2010.
  7. ^ "Heikensten: The Riksbank and the euro". Sveriges Riksbank. 17/06/2003. Retrieved 26 December 2008. {{cite web}}: Check date values in: |date= (help)
  8. ^ "Sweden. Euro Referendum 2003". Electoral Geography. Retrieved 26 December 2008.
  9. ^ "Riksöversikten" (in Swedish). Valmyndigheten. Retrieved 17 May 2009.
  10. ^ Facts about card acceptance package from the bank, read about "Multicurrency"
  11. ^ Near could be defined as within 50 km or 30 minutes' driving. Norrtälje is 80 km and more than two hours travel from Mariehamn. Regarding the definition of "city" see Stad (Sweden) and List of traditional Swedish cities (in Swedish).
  12. ^ "Swedish mayor wants to abolish the kronor". EUobserver. 20 December 2001. Retrieved 26 December 2008.
  13. ^ "The introduction of euro banknotes and coins: one year on". Europa. 29 June 2006. Retrieved 26 December 2008.
  14. ^ Bjällstrand, Richard (3 January 2009). "Delade meningar om euro hos handlare". Helsingborgs Dagblad (in Swedish). Retrieved 1 February 2011.
  15. ^ Vinthagen Simpson, Peter (2 January 2009). "Swedish town adopts euro". The Local. Retrieved 1 February 2011.
  16. ^ Rantala, Anette (5 September 2008). "Euron blir gångbar valuta i Höganäs". Helsingborgs Dagblad (in Swedish). Retrieved 1 February 2011.
  17. ^ Buchanan, Michael (29 December 2008). "Swedish town aims to be 'euro-city'". BBC News. BBC. Retrieved 1 February 2011.
  18. ^ "Sammanträdesprotokoll. Motion införande av euro-zon i Pajala" (PDF).
  19. ^ "Euron bör bli ny valuta i Pajala". Sveriges Radio (in Swedish). 4 June 2009. Retrieved 1 February 2011.
  20. ^ a b SVD.se
  21. ^ Sollentuna.se
  22. ^ [1]
  23. ^ TaxiStockholm.se TakiKurir.se Taxi020.se
  24. ^ "Lag (1999:268) om betalningsöverföringar inom Europeiska ekonomiska samarbetsområdet" (in Swedish). Sveriges riksdag. 12 May 1999. Retrieved 26 December 2008. implementing Directive 97/5/EC of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers
  25. ^ "Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community".
  26. ^ "Lag (2002:598) om avgifter för vissa gränsöverskridande betalningar" (in Swedish). Sveriges riksdag. 13 June 2002. Retrieved 8 January 2009.
  27. ^ "Lag (2000:46) om omräkningsförfarande vid beskattning för företag som har sin redovisning i euro, m.m." (in Swedish). Sveriges riksdag. 10 February 2000. Retrieved 26 December 2008.
  28. ^ "Aktiebolagslag (2005:551)" (in Swedish). Sveriges riksdag. 16 June 2005. Retrieved 26 December 2008.
  29. ^ Social Democrats: Sweden should stay outside the euro (spokesperson:Waidelich)
  30. ^ "Denmark and Sweden on the path to the euro?". Courrier international. Retrieved 26 November 2007.
  31. ^ "The strengthening Euro – is it good or bad for Europe's economy?". European Parliament. 02-07-2008. Retrieved 26 December 2008. {{cite web}}: Check date values in: |date= (help)
  32. ^ "Intresse för euro i Sverige och Danmark" (in Swedish). Rundradion Ab. 2 November 2008. Retrieved 26 December 2008.
  33. ^ DN.se
  34. ^ Economics.ox.ac.uk
  35. ^ "Glöm euron, Reinfeldt" (in Swedish). Aftonbladet. 2 December 2007. Retrieved 26 December 2008.
  36. ^ a b "EU- och Euro-sympatier i maj 2004" (in Swedish). Statistiska centralbyrån. 18 June 2004. Retrieved 1 February 2011.
  37. ^ a b c d e f g h i j k l m n o "EMU-/eurosympatier 1997-2010" (in Swedish). Statistiska centralbyrån. 14 December 2010. Retrieved 1 February 2011. Cite error: The named reference "scb_eurosympatier_overview" was defined multiple times with different content (see the help page).
  38. ^ a b "EU- och euro-sympatier i november 2004" (in Swedish). Statistiska centralbyrån. 15 December 2004. Retrieved 1 February 2011.
  39. ^ a b "EU- och euro-sympatier i maj 2005" (in Swedish). Statistiska centralbyrån. 21 June 2005. Retrieved 1 February 2011.
  40. ^ a b "EU- och euro-sympatier i november 2005" (in Swedish). Statistiska centralbyrån. 20 December 2005. Retrieved 1 February 2011.
  41. ^ a b "EU- och euro-sympatier i maj 2006" (in Swedish). Statistiska centralbyrån. 20 June 2006. Retrieved 1 February 2011.
  42. ^ a b "EU- och euro-sympatier i november 2006" (in Swedish). Statistiska centralbyrån. 19 December 2006. Retrieved 1 February 2011.
  43. ^ "http://www.dn.se/DNet/jsp/polopoly.jsp?a=632238[[Category:All articles with dead external links]][[Category:Articles with dead external links from February 2011]][[[Wikipedia:Link rot|dead link]]]". {{cite web}}: External link in |title= (help); URL–wikilink conflict (help)
  44. ^ a b "EU- och euro-sympatier i maj 2007: Nej till euron vid folkomröstning i maj" (in Swedish). Statistiska centralbyrån. 19 June 2007. Retrieved 1 February 2011.
  45. ^ a b "EU- och euro-sympatier i november 2007: Minskat motstånd till euron" (in Swedish). Statistiska centralbyrån. 18 December 2007. Retrieved 1 February 2011.
  46. ^ a b "EU- och eurosympatier i maj 2008: Fortsatt motstånd till euron" (in Swedish). Statistiska centralbyrån. 17 June 2008. Retrieved 1 February 2011.
  47. ^ a b "EU- och eurosympatier i november 2008: Minskat motstånd till euron" (in Swedish). Statistiska centralbyrån. 16 December 2008. Retrieved 1 February 2011.
  48. ^ "Swedish support for joining eurozone swells as krona shrivel".
  49. ^ "Uppåt för S och M i EU-mätning" (in Swedish).
  50. ^ "More Swedes support joining euro zone: latest poll". 20 April 2009.
  51. ^ "Majoritet vill ha ny euroomröstning" (in Swedish). 19 May 2009.
  52. ^ "Majoritet vill införa euron" (in Swedish).
  53. ^ a b "EU- och eurosympatier i maj 2009: Ökat stöd för euron" (in Swedish). Statistiska centralbyrån. 23 June 2009. Retrieved 1 February 2011.
  54. ^ a b "EU- och eurosympatier i november 2009: Stödet för euron ökar" (in Swedish). Statistiska centralbyrån. 15 December 2009. Retrieved 1 February 2011.
  55. ^ "Rekordhögt motstånd mot euron" (in Swedish). 9 April 2010.
  56. ^ a b "EU- och eurosympatier i maj 2010: Klart minskat stöd för euron" (in Swedish). Statistiska centralbyrån. 15 June 2010. Retrieved 1 February 2011.
  57. ^ a b "EU- och Eurosympatier, november 2010: Fortsatt svagt stöd för euron" (in Swedish). Statistiska centralbyrån. 14 December 2010. Retrieved 1 February 2011.
  58. ^ a b "EU- och eurosympatier i maj 2011: Klart minskat stöd för euron" (in Swedish). Statistiska centralbyrån. 15 June 2011. Retrieved 7 August 2011.
  59. ^ a b "EU- och eurosympatier i november 2011: Kraftigt minskat stöd för euron" (in Swedish). Statistiska centralbyrån. 13 December 2011. Retrieved 13 December 2011.
  60. ^ "The Euro in the Swedish Financial Sector – Banknotes and Coins" (PDF). Sveriges Riksbank. September 2001. Retrieved 26 December 2008.
  61. ^ "Swedish Euro Coins?". Chard Limited. Retrieved 26 December 2008.
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