Sweden would have been poorer with the euro new study shows

28 Dec, 2019 at 18:16 | Posted in Economics | 3 Comments

Sinking euro currency symbol with paper boat floating in oceanSveriges ekonomiska utveckling har varit starkare tack vare att landet avstått från att införa euron. Sammantaget under perioden 2003–17 har tillväxten i ekonomisk aktivitet varit mellan en och en halv till tre gånger högre än om Sverige infört euron …

Empirin och teorin talar för att Sverige har gynnats av att stå utanför valutasamarbetet och att landet har goda skäl att invänta såväl det fortsatta arbetet med integrationen av euroländernas finanspolitiska ramverk som nästa ekonomiska nedgång. Först därefter kan frågan om ett fullvärdigt svenskt deltagande i eurosamarbetet åter bli aktuell.

Björn Olsson

Sixteen years ago, Swedish citizens were asked if they wanted to join the eurozone. Of the 83 % registered voters who participated in the referendum close to 57 % cast their ballot for the ‘no’ side. The result of the referendum came as a total shock to the Swedish establishment. All major parties and business organizations were for the euro. But although the ‘yes’ side outspent the ‘no’ side ten to one, the ‘no’ side won. Yours truly — unlike the ‘usual suspects’ among establishment economists — participated actively in the fight against the euro. It still makes me immensely proud.

The Swedish people got it right. The political and economic establishment got it wrong. The monetary union has not been able to show any noteworthy productivity jumps since it was launched 20 years ago. The economic problems have been growing and at times almost led to national catastrophes. The EMU is not an optimal currency union, and as history has told us, countries like Germany, Greece, Italy, Portugal and Spain do not fall into step when marching.

The problems with the euro should not come as a surprise. If a country gives up its own currency, it does not only give up the possibility of having its own over monetary policy. Membership in the European monetary union means less accommodation and flexibility when it comes to country-specific asymmetric shocks and fewer possibilities for freely using financial policies to guarantee low unemployment and high welfare levels.

The unfolding of the repeated economic crises in euroland during the last decade has shown beyond any doubts that the euro is not only an economic project but just as much a political one. What the neoliberal revolution during the 1980s and 1990s didn’t manage to accomplish, the euro shall now force on us.

One size does not fit all. The overall performance of the eurozone looks bleak. The establishment’s euro project has never been democratic. That is also one of the reasons for its low legitimacy among ordinary people. When the people were asked — as in Sweden — we said no. We understood that a single currency would lead to higher unemployment -– with a central bank that mainly focuses on inflation and pays little attention to financial stability would be to expect. The euro model is and has always been footed on an economic model that increases inequality and is to the disadvantage of the working classes.

Sweden has since the financial crisis hit Europe managed its economy far better than the eurozone countries. There is still nothing that speaks for Sweden to abandon the krona for the euro. With our own currency, we can pursue a much better macroeconomic stabilization policy.

How much whipping can economy and democracy take? How many have to be hurt and ruined before we end the euro madness? Instead of just go on mending the project it would be better to just admit that we have reached way’s end and that it is time to take another road. A road forward. A road without the euro.


  1. Quite right to Lars. Yet I see no Swedcit. With the EU Military Union approaching fast Swedish Neutrality in marshall matters and EU imperialism is under great threat.
    I looked at the Norway defence model ahead of the last UK election, of course, Sweden is not in Nato, but the pressure on the Swedish Technocracy to get in step militarily is ever-present and at an all-time high. Expect more submarines in the Archipelago.


    WHY THE EURO DIVIDES EUROPE https://newleftreview.org/issues/II95/articles/wolfgang-streeck-why-the-euro-divides-europe

  3. “To understand the conflicts that have erupted in and around the Eurozone over the past five years, it may be helpful to begin by revisiting the concept of money.
    It is one that figures prominently in Chapter Two of Max Weber’s monumental Economy and Society, ‘Sociological Categories of Economic Action’. Money becomes money by virtue of a ‘regulated organization’, a ‘monetary system’, Weber thought.footnote2 And following G. F. Knapp’s The State Theory of Money [1905], he insisted that under modern conditions, this system would necessarily be monopolized by the state. Money is a politico-economic institution inserted into, and made effective by, a ‘ruling organization’—another crucial Weberian concept; like all institutions, it privileges certain interests and disadvantages others. This makes it an object of social ‘conflict’—or, better, a resource in what Weber refers to as a ‘market struggle’:
    Money is not a ‘mere voucher for unspecified utilities’, which could be altered at will without any fundamental effect on the character of the price system as a struggle of man against man. ‘Money’ is, rather, primarily a weapon in this struggle, and prices are expressions of the struggle; they are instruments of calculation only as estimated quantifications of relative chances in this struggle of interests.footnote3
    Weber’s socio-political concept of money differs fundamentally from that of liberal economics.footnote4 The founding documents of that tradition are Chapters iv and v of Adam Smith’s Wealth of Nations, in which money is explained as an increasingly universal medium of exchange, serving an (ultimately, unlimited) expansion of trade relations in ‘advanced societies’—that is, societies based on a division of labour. Money replaces direct exchange by indirect exchange, through the interpolation of a universally available, easily transportable, infinitely divisible and durable intermediate commodity (a process described by Marx as ‘simple circulation’, c–m–c).

    According to Smith, monetary systems develop from below, from the desire of market participants to extend and simplify their trade relations, which increase their efficiency by continually reducing their transaction costs. For Smith, money is a neutral symbol for the value of objects to be exchanged; it should be made as fit as possible for purpose, even if it has an objective value of its own, arising in theory from its production costs.

    The state makes an appearance only to the extent that it can be invited by market participants to increase the efficiency of money by ‘putting its stamp’ on it, thus making it seem more trustworthy. Unlike Weber, who differentiated monetary systems according to their affinity to countervailing distributive interests, for Smith the only interest that money can serve is the universal interest in ensuring the smooth functioning of as extensive a market economy as possible.
    Remarkably, the post-war sociological tradition chose to follow Smith rather than Weber. The demise of the Historical School of Economics—and the fact that structural functionalism, above all Talcott Parsons at Harvard, ceded the economy as an object of study to Economics faculties increasingly purified in a neo-classical spirit—enabled sociology, as it became established in the post-histoire decades after 1945, to dispense with a theory of money of its own.
    Instead it opted for a quiet life and chose to conceive of money, if at all, in the manner of Smith, as an interest-neutral medium of communication, rather than as a social institution shot through with power—as a numerical value, a numéraire, rather than a social relation.
    This led to a rupture, both in sociology and economic theory, with the fierce debates of the interwar years about the nature of money and the political implications of monetary systems. These had been at the heart of Keynesian theory, in particular: see the battles around the social and political implications of the gold standard, driven notably by Keynes himself, or around Irving Fisher’s full-reserve banking model.”


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