The Euro is a Prize in Borg's Eyes

Although Finance Minister Anders Borg sees the benefits that have arisen from Sweden having an independent currency during the financial crisis, he nevertheless maintains that Sweden should swap its krona for the euro. Speaking with Swedish Radio News, Borg said that the economic advantages of being part of the Eurozone are marginal, but the political perks are worth the switch.

“I think that we should do it in long term, because of political reasons. I have been very clear in that I don’t think that this is primarily an economic issue. There can be advantages in the short term in staying on the outside, and we have maybe experienced that now,” Borg said.

The Swedish crown has fallen considerably in value against the euro over the last eighteen months, meaning that Swedish companies have had an edge on their Eurozone competitors.

But the political advantages of a small country like Sweden being part of a larger economic zone outweigh the economic perks of keeping the krona, Borg says.

“The EU and the Eurozone are, so to say, our place. We have the USA, we have China—in an increasingly bipolar world Sweden has to be a part of [global] discussions, and that can only happen via the Euro group.”

On the domestic side, Anders Borg rejected the possibility of further income tax cuts in the near future, declaring instead in a speech in Gothenburg on Friday that such taxes are likely to increase.

“There are some heavy reasons to consider an increase of income taxes,” Borg announced. Tax cuts only make sense in times of strong state budgets, and this is not the case now, Borg added. The Finance Minister also praised former Social Democratic Prime Minister Göran Persson for having reconstructed state finances during his time in office.