The Social Democrats think that Sweden is ready to swap its krona for the euro, leaders of the country's governing party said Monday.

Sweden is a member of the European Union, but like Britain and Denmark did not join the Economic and Monetary Union with the first wave of countries in 1999.

The government plans to hold a referendum on adopting the common currency next year. A more precise date is likely to be set at a senior party meeting on Nov. 16.

Opinion polls show half of Swedes favour the euro, one-third oppose it and the rest are undecided. [EuroTracer's Comment: See an earlier IHT report on 2002-06-19.]

The Social Democrats have said that before the country can drop the krona, economic cycles in Sweden and the 12 nations now sharing the euro must be moving in tandem, Swedish wage developments should be in line with the euro area and the government's finances must be "sound". Those criteria have been met, the party's board said.

If Swedes vote to adopt the euro, the country would join the Exchange Rate Mechanism, a precursor to the single currency that would fix the krona's value against the euro. The krona would be pegged at 8.60 per euro, SEB Merchant Banking estimates. (Reuters, Bloomberg)

Oslo rejects talk of euro

Norway's finance minister on Monday rejected a suggestion by the head of the Norwegian statistics bureau that the country might abandon its currency, the krone, for the euro in a novel, halfway membership in the European Union, Reuters reported from Oslo.

The finance minister, Per-Kristian Foss, said Norway could not dodge a requirement to join the EU if it wanted the euro. Norway voted against EU membership in 1994.

[EuroTracer's Comment: The Financial Times reported on 2002-11-17 that a day earlier Sweden's ruling Social Democratic party gave the go-ahead for a referendum on the euro. The article said that the date of the referendum would be sometime between March and November 2003, most likely in September or early October.

PS: The BBC reported on 2002-11-29 that the referendum is likely to be held on 2003-09-14.]

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