There is a case to be made that it’s impossible for a small country with an open economy like Sweden to pursue an independent monetary policy. After all, Sweden’s south-western neighbour Denmark has been trading its currency in a narrow bandwidth to the euro for many years.
However, delegates at Expert Investor Sweden, held in Stockholm last Thursday, were unanimous in their dismissal of such a proposal. Some noted a formal peg would not make much difference, as Sweden’s cental bank has been preoccupied with preventing the krona from rising against the euro for the past couple of years.
 
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“In fact the krona is already practically pegged to the euro, so a formal peg wouldn’t make much of a difference,” said Lars Hansson, an independent pension fund adviser. Others fear a peg would eventually force Sweden into the euro zone. In a referendum in 2002, the Swedes narrowly rejected joining the common currency, when 55% of voters voted against adopting the euro.To that purpose, and in a supposed bid to stave off deflation, the Riksbank’s main interest rate currently stands at -0.35%, the third lowest in the world after Switzerland and, indeed, Denmark. And only 38% of delegates want the Riksbank to raise rates, even though Sweden’s GDP growth currently is the highest in Europe at 3.3% in the second quarter of this year, and the country’s real estate market has entered bubble territory.
If a new poll were held today, this percentage would probably be much higher. “I voted against euro accession in 2003,” says Jarl Åkerlund, head of savings products at Nordea. “A common currency doesn’t work for a group of economies which are so different from each other. This point has been proven by the euro over the past years,” he added, suggesting Denmark could soon experience it’s own ‘Switzerland-moment’ (referring to the dramatic abandonment of the Swiss franc’s peg to the euro in January this year).
Click here to see a full overview of the voting results at Expert Investor Stockholm
