STOCKHOLM—Sweden has sound state finances, yet some say it is of little value since the country opted to keep its own currency, the krona, rather than switch to the Euro.
Sweden has a positive trade balance and strong state finances. In the U.S., the financial crisis is raging and enormous sums are being borrowed to cover the holes. Despite this the dollar has gone up and the Swedish krona, or crown, has gone down. One U.S. dollar now buys more than 8 Swedish kronor. Before the crisis it was even lower.
From a global perspective, the krona being small-used currency carries more weight than the fact that Sweden’s economy is in order. Despite their financial troubles, the U.S. dollar is considered a safe currency, so even in times of global economic unrest, the Swedish krona drops against the dollar.
When the European Union wanted a common currency for its member states, Sweden took a national poll in 2003 to decide whether to do the same. Fifty-six percent of Swedes wanted to keep the krona, but the drawbacks of their decision has become painfully obvious.
Still, there are also advantages. With the weak krona, the U.S. can buy Swedish goods at a lower price, which strengthens the Swedish economy. In the current social state however, demand is weak in general in the world economy, and if the krona remains weak, Sweden risks inflation.
Sweden also pays a membership fee to the E.U., being one of its member states. Since the crown has dropped against the Euro, its membership will be several billion kronor more expensive, which of will affect the Swedish tax payers.
At the time of the Swedish election in 2003, 42 percent of Swedes wanted to switch to the Euro. This number has remained relatively constant, according to a survey published in Svenska Dagbladet, one of Sweden’s major newspapers, on April 19.
The difference is that those who wanted to keep the krona is now only 47 percent, compared to 56 percent in 2003. Many more people are uncertain now.
Sweden has a positive trade balance and strong state finances. In the U.S., the financial crisis is raging and enormous sums are being borrowed to cover the holes. Despite this the dollar has gone up and the Swedish krona, or crown, has gone down. One U.S. dollar now buys more than 8 Swedish kronor. Before the crisis it was even lower.
From a global perspective, the krona being small-used currency carries more weight than the fact that Sweden’s economy is in order. Despite their financial troubles, the U.S. dollar is considered a safe currency, so even in times of global economic unrest, the Swedish krona drops against the dollar.
When the European Union wanted a common currency for its member states, Sweden took a national poll in 2003 to decide whether to do the same. Fifty-six percent of Swedes wanted to keep the krona, but the drawbacks of their decision has become painfully obvious.
Still, there are also advantages. With the weak krona, the U.S. can buy Swedish goods at a lower price, which strengthens the Swedish economy. In the current social state however, demand is weak in general in the world economy, and if the krona remains weak, Sweden risks inflation.
Sweden also pays a membership fee to the E.U., being one of its member states. Since the crown has dropped against the Euro, its membership will be several billion kronor more expensive, which of will affect the Swedish tax payers.
At the time of the Swedish election in 2003, 42 percent of Swedes wanted to switch to the Euro. This number has remained relatively constant, according to a survey published in Svenska Dagbladet, one of Sweden’s major newspapers, on April 19.
The difference is that those who wanted to keep the krona is now only 47 percent, compared to 56 percent in 2003. Many more people are uncertain now.
