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Sweden should adopt euro but not mull it before 2013 -finmin

Published 11/04/2008, 11:02 AM
Updated 11/04/2008, 11:04 AM

By Marcin Grajewski

BRUSSELS, Nov 4 (Reuters) - Sweden should join the euro zone eventually, but should not reopen the issue before 2013 -- 10 years after the country rejected the currency in a referendum, Finance Minister Anders Borg said on Tuesday.

Borg told Reuters that the global financial crisis had not brought any additional pressure on his country to adopt the currency now shared by 15 countries.

"Sweden should join the euro eventually. It would be good for political reasons," he said during a meeting of European Union finance ministers.

Many analysts say that belonging to the powerful currency area shields its member states against external shocks linked to the financial crisis.

"We will be able to handle the crisis with or without the euro," commented Borg.

The Swedish crown has lost about 9.0 percent against the euro since late August, prompting some lawmakers to preach the merits of the single currency again five years after Swedes rejected euro zone entry in a nationwide referendum.

"We were very clear when we had the referendum. That it would take at least 10 years before the issue returns to the agenda. The agreement is still valid," Borg said.

Turning to crisis-hit Iceland, Borg said Sweden was ready to offer help, but the island's government first had to present a long-term programme to fix public finances.

"Sweden and other Nordic countries have special responsibility to help our Icelandic neighbours and we will take up this responsibility," he said.

"Iceland's government needs to present a long-term plan for sustainable public finances, to get out of the mess they are in."

Iceland has already reached a tentative deal with the International Monetary Fund for a $2 billion loan and has been turning to other potential lenders as it tries to fix a broken financial system and revive its economy.

It has said it needed $4 billion more in aid on top of the IMF aid. (Reporting by Marcin Grajewki, Editing by Mike Peacock and Victoria Main)

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