More Swedes want to switch currency from the krona to the Euro, with support the highest it’s been since 2009, according to a survey by Gothenburg University’s SOM Institute.
Paywall? https://archive.is/ZXdUu
Can’t blame them. The Euro is managed quite reasonably. I can’t speak for the Swedes but the EU only has to gain from Sweden joining the Eurozone. I’ve seen people comment here that giving up currency sovereignty is a terrible idea. But what does that mean? To me it simply means that in times of crisis, governments cannot simply order their central banks to print more fiat currency. This doesn’t seem like a great long-term policy either… but then again I’m not a full-time economist.
Feds don’t normally print money. That would be the treasury and they don’t get to choose how much. The feds usually adjust interest rates by buying and selling treasury bonds that they don’t pay for, or I should say pay for with accounts they can adjust their balances as needed, including destroying “money”, to achieve the desired interest rate and slow or speed the economy. A point of interest is that the fed is not a part of the government and isn’t supposed to be influenced by it. I know it’s a lot easier to just say they or the government just print money but there is a lot of nuance. Anyway, that’s not really what the discussion is so have a great day!
Curious what the downvotes mean. It’s really complicated. Lines get crossed. Where am I wrong? Too us centric?
Giving up currency sovereignity is a terrible idea! That means the government has to “balance” its budget and can’t print money to make up for shortfalls, forcing austerity.
The government has to balance the budget anyway, and devaluing your currency is a bit like peeing your pants. It’s nice and warm for a bit and then increasingly uncomfortable.
Inflation goes up, you see capital fights because you’re not a reliable currency, you increase your national debt, and you instantly make the entire population poorer than their neighbor countries.
So while there are some benefits, most economists argue against it.
I can’t say if Sweden going for the Euro is good or bad for Sweden, and there’s a paradox in asking people about it, because if the SEK is weak then support goes up, but it’s a bad time to join because of the low value, but if the SEK is strong then support goes down, although we’d be in a much position to join.
Inflation can be controlled. Public spending creates money and taxation destroys it, ensuring the total supply of money doesn’t outstrip demand and cause inflaton. Without that sovereignty they can’t create or destroy money, they are subject to the whims of the currency bloc.
It’s just another tool in the toolbox. Giving it up is foolish.
While that’s certainly true, we also had businesses speculate against the Swedish currency in the early 1990s, driving up interest rates to over 500% for a few days in order to stop the outflow of capital.
So there are arguments for adopting the Euro too. But like I said, I’m not informed enough to say which is better. It’s a very complex issue.
How is that an argument for adopting the Euro? They stopped the outflow of capital in a couple days, and it’s been 30 years. Seems like it worked.
They could do it because we were a small currency, and it it didn’t quite work, at least not the way it worked before. The currency is now “floating” against other currencies which it wasn’t back then, and we had a recession at the time. I agree that Sweden would be giving up a few tools in the economic toolbox, but on the other hand it gains a few others. I can’t say which ones are more valuable because I’m not an economist. I suspect you’re not either.
We should be able to have public debate about public policy. My opinion obviously doesn’t matter much, but the decision is ultimately in the hands of Sweden’s people - not economists.
