Tuesday Sep 11 2001 | Updated 0013 hrs IST 1343 EST
Swedes resist change to euro
STOCKHOLM SWEDISH leaders will be watching closely when Euro coins and bills replace national currencies in a dozen other European countries in January, hoping a smooth transition will help ease Swedes' resistance to the common currency.
Most newspaper polls have shown more than 40 per cent of Swedes oppose adopting the euro, 30-plus per cent are for the change and the rest are undecided. But Prime Minister Goeran Persson has said he still hopes Sweden could switch to the euro by 2005.
As with Britain and Denmark - the other EU members holding out against adopting the euro - one major fear of the common currency is that it could lead to losing control over national economic policy to EU headquarters or the European Central Bank.
Scandinavian critics also see a threat to their extensive social welfare systems - funded by some of the world's highest taxes - if forced to harmonize financial policies with other countries.
``Most of the (euro zone) economic policy is already locked in,'' said Lisa Rasmussen of the Left Party in Sweden.
``And the policy would make it hard to have Swedish economic policy.''
Still, proponents offer good reasons for replacing the Swedish kronor with the euro and they appear to be having an effect.
An August poll of 1,000 Swedes published Saturday in the financial daily Finanstidningen showed supporters and proponents of the euro tied for the first time at 44 per cent.
Persson said Swedes - inveterate travelers - were reacting to a recent plunge in value of the local currency against the US dollar and the euro.
``Many Swedes have traveled abroad and don't think this is very fun to experience,'' he told the news agency TT.
``We are vulnerable in a small economy. If we're outside we can be exposed to international speculation.''
Manufacturers also believe adopting the common currency will broaden their markets in other European nations. And many ordinary Swedes see one currency as an alternative to complicated exchange rates and fees when changing kronor into other European currencies.
Gunnar Wilson, a 54-year-old civil servant, noted that on his last trip to Italy, the exchange rate was 2,000 lire to 10 kronor (about dlrs 1).
``Going to Italy is a disaster with all those zeroes to keep track of,'' Wilson said. ``It's easier to have a common value to compare.''
Wilson said he has not made up his mind about switching to the euro and the issue is largely on the back burner since a national referendum is not expected until after parliamentary elections next year.
Persson has said he would not schedule the vote unless the outcome was certain. He also said a smooth introduction of euro notes and coins in January would be crucial.
``Everybody is decently happy with this sort of wait-and-see situation,'' said Persson's spokesman, Jan Larsson.
Many of the arguments today against adopting the euro were used in the months leading up to Sweden's 1994 vote on joining the EU _ which passed narrowly.
``There is this kind of old idea that Sweden has some sort of moral superiority by staying outside the big international power blocs,'' said professor of international economics, Lars Calmfors, pointing out that neutral Sweden is not a member of NATO.
But Swedes have embraced globalization since their own market of some 9 million people is so small. Homegrown companies like wireless equipment maker LM Ericsson, Volvo and Ikea are names recognized around the world.
``An argument in favor which is very strong and which, I think, in the end will decide it really, is that Sweden doesn't want to stick out and send the message that we don't want to belong to the team,'' said Carl Hamilton, a professor at the Stockholm School of Economics.
Supporters also say membership in the European Monetary Union would give the country more say in EU-wide financial decisions - an argument used by the ruling Social Democratic Party when it reversed policy last year and voted to conditionally endorse the currency.
The governments of Sweden, Denmark and Britain all support the common currency but say certain economic conditions must be met and voters must approve the decision.
That policy got off to a bad start last September when the majority of Danes said ``no'' to the common currency in a nationwide plebiscite.
Public skepticism also makes British leaders hesitant to push for the euro's adoption now despite June's landslide re-election of Prime Minister Tony Blair, who says he's inclined toward the common currency.
A future decision in Britain is expected to have a major impact on the euro' s chances in Sweden, experts say.
``The cost (of rejecting the common currency) is that we lose influence and the other countries will listen less to us,'' Calmfors said. ``But as long as Great Britain is outside, we can live with that.''
Already, Swedish businesses with international operations - which must deal with the introduction of coins and bills in the 12-nation euro zone in January - are making studies and planning changes.
Fashion retailer Hennes and Mauritz has been working for about a year on the currency switch that will occur in its stores in eight countries. Its studies also cover Sweden, Denmark and Britain so it will be easier to include them should they adopt the euro.
``I also think that the Swedish people will in time realize how convenient it is just to have one currency in their wallet when they travel,'' said Mats Wallin, head of H&M's euro group.
Professor Hamilton, who helped negotiate Sweden's EU membership, agreed that introduction of the actual currency should help euro proponents.
He said that regardless of all the theoretical arguments against joining the EU, one strong factor in favor was concern that Swedes might have to stand in separate lines as non-EU citizens at passport control.
``People felt offended that they would have to go stand among the Americans, Africans and so on,'' he said. ``That was something tangible, that people experienced from time to time.'' (Reuters)
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