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2021-01-06 – Sweden- yes to the EU but no to the Euro

“Make it easy – one currency”

Recently I was watching an episode of Rapport from December 1991. Rapport is the Swedish public service news program. Via SVT, one can watch older episodes about different topics and events. This one is about the Maastricht agreement and the negotiations that were taking place during 1991.  

Welcome to Maastricht

In the episode, different aspects are being mentioned, such as: 

Political satire
  • European army and military policy 
  • Shaping a political union 
  • Sovereignty issues
  • United Kingdom’s status 
  • European Community’s enlargement via Sweden, Finland and Austria 
  • Social and labour market policies 
  • Agricultural policy  
Demonstrations in Maastricht concerning the Common Agricultural Policy (CAP)
President of the European Commission – Jacque Delores

In this text, my ambition was to focus on the Eurozone development and contemporary ideas concerning Sweden and the European Monetary Union (EMU). One of the statements at the beginning of the episode is that the common currency in Europe “is going to affect all of us. Everyone is going to notice it in our everyday lives and our wallets.” 

“Euro before it was cool”

At the end of 1991, Sweden was a society where many citizens, especially those active in political parties and NGO:s, were discussing and debating about the European Community and Sweden’s eventual membership in what was later to become the European Union. Discussions and debates were concerning topics as currency, finance and monetary policy. 

Latest news from Maastricht in the Stockholm studio.

One interesting thing from this episode is that one of the commentators says that since the Maastricht treaty is going to be binding, and that those states who choose the common currency will have to be submitted to rules and control  “under a federal central-bank”. (keeping in mind that the European Central Bank was constructed via intergovernmental governance and that the EU is more of a confederation).

Another commentator says that due to EC:s decision, maybe even the Swedish Krona will disappear – “already in 1997”. 

In the episode, one of the more mentioned aspects is the ECU – European Currency Unit, the former currency unit of EC-states. The SVT personnel asked questions to several individuals in Stockholm – “What is the ECU?” and received the following answers: 

I do not know 

It is the European currency. 

Is it perhaps the money we all are going to shop with? 

The idea mentioned in the episode was that Sweden would not only join the European Union but also the EMU – Eurozone. One of the segments mentioned in the video is that wage development in Sweden in such case will not longer be governed by negotiations between labour market partners  (as between trade/labour unions and business organisations) but by the European Community. Thereby, the commentator states that decision-making capability for parliament members. in Sweden will “decrease radially”.  

Heads of states as prime-minister John Mayor (UK), Reichkanzler Helmuth Kohl (Germany) and president Francois Mitterand (France) during the Maastricht Treaty negotiations in 1991. Not so much of gender equality and more of a “old boys club”.

Another important factor to understand is that Sweden in 1991 was a nation with “big” economic and financial problems regarding monetary policy, budget deficits, and fiscal policy. Politicians as Carl B Hamilton from the People’ Party (today – Liberal Party) and usually those on the center-right and with market-liberal identifications favoured Sweden joining the EMU to have stricter rules regarding fiscal and budget spending. For Hamilton, joining the EMU was also about “by putting on the straitjacket it is possible to converge towards the European inflation pace”.  

A liberal MP and an economist
Carl B Hamilton and his colleagues “giving Euros” to passengers on their way to Finland – the Euroland.

In the episode, it is mentioned that for the companies/business a transformation towards one single currency means multi-billion profits regarding internal trade in Europe, and concerning imports and exports globally,  while “for the common man” it means saved money from exchange fees and one price in Europe.  

Interests rates, inflation, government debt and budget deficit – topics for EMU discussions in Sweden where one of the ideas was Sweden joining the Eurozone in 1999

One of the commentators also started that “more decisions in the EC mean a total rearrangement of Sweden’s economy” by reducing inflation and wage-growth to a smaller part of “what we are used to”.  

Negotiations in Maastricht entering “a critical phase” by “agreement for common currency before 1999”, but without the UK  

One of the experts interviews in the episode was economist Lars Jonung, who was also asked about capitalism. He stated that “Sweden is today in front of a historical shift” were “we need to change our Swedish model from the 1980s to a 1990s model where the Swedish economy is much more open towards Europe than before”. On the question regarding “Swedish capitalists,” Jonung argued that this was not the end of capitalism nor victory per see because the capitalists as in the Wallenberg family were going to be submitted and exposed to a much stiffer competition than before. 

“Death of capitalism?”

In the episode, it is also mentioned that inflation rules are going to be decided from experiences in Germany, the Netherlands and Belgium. Here, one can see the comparison between them and Sweden.

Government debt in relation to Maastricht rules

Also, at the end of the episode, it mentioned the proposal in the Stockholm City Council about its personnel aas administrators and clerks being able to take a part of their salary in Euro. One of the interviewed is Jan Bjoerklund who later was the leader of the Liberal Party from 2007-2018.

Image may contain: 1 person, close-up, text that says "svt"
Jan Bjoerklund also hada. military career as an army officer.
The “top-politician” interview in the episode is Carl Bildt from the Moderate (conservative) party. On the picture down below one can see a card stating “Yes to Europe” with Moderate party logo under Bildts elbow.

Sweden is still outside of the Eurozone. In 2003 a referendum was held where a smaller majority voted no. That is a story for another time. 

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