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The euro - what's in it for me? An economic analysis of the Swedish euro referendum of 2003


Author Info

  • Lars Jonung
  • Jonas Vlachos


The Swedish referendum on the euro in September 2003 is an exceptional event for researchers of monetary unions and of European economic integration. Voters chose between maintaining the domestic currency, the krona, and replacing it with the euro, the single currency of the European Union. The referendum revealed significant dividing lines between Yes- and No-voters in areas such as income, education, sex, employment, geographical location and industrial structure. The aim of this study is to explain the large differences in voting behaviour. The empirical analysis of the referendum outcome is based on the traditional optimum currency area (OCA) approach, merged with an account of the distributional effects of Swedish membership of the euro area as they were perceived by the voters. The OCA approach builds upon the trade-off between reducing transaction costs by entering a monetary union, thus increasing trade and income, and obtaining macroeconomic insurance by having a domestic currency with a flexible exchange rate. This trade-off was perceived differently by voters depending on their evaluations of the costs or risks and the benefits or gains of adopting the euro versus keeping the krona, the domestic currency.

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Bibliographic Info

Paper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 296.

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Length: 80 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:euf:ecopap:0296

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Keywords: Euro; krona; referendum; optimal currency theory; monetary union; Sweden; EU; Jonung; Vlachos;


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Cited by:
  1. J James Reade & Ulrich Volz, 2010. "Too Much to Lose, or More to Gain? Should Sweden Join the Euro?," Discussion Papers 10-13, Department of Economics, University of Birmingham.


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