Brussels, 22/05/2002 (Agence Europe) - Although Sweden continues to meet the convergence criteria on price stability, government budgetary position and interest rates, it does not fulfil the exchange rate criterion, which has created a volatile situation for its currency, the Swedish Krona. These form the conclusions of the two most recent reports on Sweden, adopted on Wednesday by the European Commission and European Central Bank (ECB).
These reports confirm that Sweden is counting on holding a referendum in summer 2003 on its joining the Euro and that it must make a concerted effort to participate in the European exchange mechanism (most countries in the Euro-zone were members of MCE II for two years in order to enter the final phase of the EMU, whereas Finland and Italy qualified 17 and 16 months respectively after participating in he European exchange rate mechanism.
Another sore point for Sweden is that national legislation has been judged incompatible with the Treaty and the statutes of the ESCB, particularly because of the Swedish central bank's (Sveriges Riksbank) lack of independence from the state. The Swedish government recently compelled the central bank to transfer more than EUR 2 billion into State bonds. In its report, the Commission points out that events occurring in 2001 and 2002 demonstrated the absence of detailed legislation on profit allocation and extraordinary payments from the Riksbank to the Treasury.
Commissioner Pedro Solbes declared that, "While the Swedish economy has shown a good performance over the last few years and three of the convergence criteria are fulfilled, I regret that Sweden is not yet in a position to participate fully in EMU. As the Ecofin Council noted in its Opinion on the Swedish convergence programme of 22 January, I nevertheless expect Sweden to join ERM2 and bring its central bank legislation in line with the Treaty and the ESCB Statute in due course". These convergence reports only involve Sweden because the other two Member States not in the Euro-zone, Denmark and the United Kingdom had negotiated "non-participation" clauses before adopting the Maastricht Treaty, with the sole condition that these countries make the demand themselves.