New poll: Swedish business leaders in favour of joining the Euro

Should Sweden ditch the krona and adopt the Euro as its currency? That’s what just over half of all business leaders who responded to a fresh survey think.

New poll: Swedish business leaders in favour of joining the Euro
Sweden is a member of the EU but has never joined the Euro. Photo: Henrik Montgomery/TT

Business magazine Dagens industri asked around 2,000 business leaders in Sweden whether they thought the country should join the Euro, and 51 percent said yes.

That’s an increase compared to 40 percent in the summer of 2020.

Similarly, 39 percent told the new survey that Sweden should keep the krona as its currency, a decrease from 54 percent in 2020.

Increasingly shaky global politics may be a factor behind the growing popularity of the Euro, according to Jonas Fritz, an opinion analyst for pollsters Ipsos.

“Just like opinion has shifted on the question of Nato, this is another sign that people want to move closer to other countries and be part of an international context,” he told Dagens industri.

Sweden joined the European Union in 1995 but didn’t adopt the Euro. In 2003, the country held a referendum on whether or not to join the Euro, but 56 percent voted no.

And recent polling suggests that despite business leaders’ change of heart, the general public is less convinced. Sixty percent told a survey by national number-crunchers Statistics Sweden in November 2022 that they would vote no if asked again.

The Swedish krona has fallen against the Euro and the US dollar in recent years. Today, one Euro costs 11.14 kronor, compared to 10.20 kronor in the summer of 2021.

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Riksbank deputy ‘open to reconsidering raising rates in April’

Martin Flodén, the deputy governor of Sweden's Riksbank, has questioned whether the central bank needs to bring in further rate rises in April, following bank runs on two niche banks in the US and a crisis of confidence at Credit Suisse.

Riksbank deputy 'open to reconsidering raising rates in April'

Uncertainty in the financial market following bank runs in the US and a crisis at Swiss bank Credit Suisse could have changed the playing field, he told TT in an interview. 

“It affects which level the key interest rates need to be in order to have a contractive effect,” he said, referring to the recent days of financial market turbulence. “We can’t just look at key interest rates by themselves. It’s the key interest rate in combination with all of these developments which determines how tight financial policy will be.”

He said it was not yet obvious what decision should be taken. 

“It’s clear that monetary policy needs to stay tight, but what level of interest is that? We need to assess all of the current developments there.” 

‘Could go in different directions’

In theory, there could be such a serious financial crisis, with such a severe effect on lending and banks’ financing costs, that the central bank would be forced to adopt supportive measures, even lowering the key rate.

Flodén doesn’t think Sweden is in that situation, although he thinks there’s a possibility it could happen.

“It’s not something I can see happening right now, at least, although this could go in different directions.” 

He added that he doesn’t see any reason for any “special concern”, toning down the risk that a crisis for two smaller niche banks in the US and at Credit Suisse could affect the Swedish financial system.

“Of course, it could lead to some stress, but there aren’t actually any particular signs in Sweden, which are worrying me,” he said. 

Flodén is one of six members of the Riksbank executive board, led by Riksbank chief Erik Thedéen, responsible for making a decision on whether interest rates will go up again at the end of April.

The Riksbank has indicated that a rate hike of between 0.25 and 0.5 percent from the current 3 percent rate could be necessary.

Flodén described the most recent inflation statistics for February, where inflation unexpectedly rose to 12 percent, as “not good at all”. So-called KPIF inflation, where the effect of mortgage rates is removed, rose from 9.3 percent to 8.7 percent in January. The Riksbank’s goal is 2 percent.

“It’s clear that inflation is still far too high and that monetary policy needs to be focussed on combatting inflation,” he said, adding that inflation statistics for March will be released before the central bank is due to make a decision on whether to raise rates or not in April.