'Sweden ready for euro entry': report
Published: 27 Jan 09 10:31 CET
A new report indicates that economic arguments against euro entry are no longer valid and concludes that in the wake of the finance crisis, it is now time for Sweden to join.
The report from the Swedish Centre for Business and Policy Studies (SNS) argues that the situation had changed in Sweden since the 1990s and that the country would benefit from joining the European single currency.
A government report carried out in the 1990s came to the conclusion that on balance Sweden would be better staying out of the monetary union (EMU) and so, while the country joined the European Union, the Swedish kronor was retained.
Harry Flam for SNS, who was one of the architects of the original report, writes in an article in Tuesday's Dagens Nyheter that the circumstances have changed.
"The report shows that Sweden has in practice had the same development of unemployment and inflation as if the country had been part of it (the single currency) from the beginning, but public finances would have benefited from the greater efficiency afforded by a stable cost base and increased trade."
The report shows that base rates set by the European Central Bank (ECB) and the Swedish Riksbank have followed one another very closely over the period.
Flam writes that a stable exchange rate would benefit Sweden. Swedish companies would avoid losing competitiveness as a result of fluctuating rates.
Currently 40-45 percent of Sweden's trade is conducted through the eurozone countries.Apart from the famous case of Haparanda, Swedish town adjacent with Finland, another...Swedish town adopts euro
Published: 2 Jan 09 15:21 CET
Tired of government inactivity, the town of Höganäs, a popular tourist destination on the south-west coast of Sweden, has decided to adopt the euro.
The residents of Höganäs were predominantly in favour joining the European single currency when the Swedish people voted to reject the euro in a referendum on the issue in 2003.
In declaring Höganäs a "Eurocity", county councillor Péter Kovács has renewed calls for the government to work harder to introduce the euro countrywide.
"We have developed a Eurocity logo, which we think will become a standard across Sweden and we believe that almost all the counties in Skåne will follow suit within a couple of years," Kovács said to local newspaper Sydsvenska Dagbladet.
From January 1st Höganäs residents will be able to pay rent, bills and conduct their shopping in either Swedish kronor or euros. ATM machines will 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.
Höganäs is located at the northern tip of the west coast of Skåne and is known for its porcelain and beautiful seaside location. The town and surrounding area is a popular destination for tourists from eurozone countries in the summer who will now be able to use their euros almost as if they had never left home.