The nations that make up Scandinavia are some of the most ardent in Europe about abstaining from joining the common European currency. But Finland’s Minister of Sport and Culture, Stefan Wallin, recently wrote an article in the regional newspaper Turun Sanomat stating that he feels a Nordic region with a single currency would be better positioned to weather global economic turmoil.
His article may be in response to the collapse of neighbouring Iceland’s currency a few months ago. Wallin feels that Sweden and Denmark should become members of the eurozone, while Norway and Iceland should apply immediately for membership in the European Union.
“A stable currency is something that the Icelanders of all people, but also other Nordic countries that have opted for the observation class of European integration, have gradually started to miss,” Wallin wrote in the newspaper column. “There is no escaping the fact that a small currency simply cannot bear the pressures of the boundless, real-time global economy.”
Suggesting that Finland was the Nordic nation paving the way to a more stable future, Wallin also commented that “Finland’s tour of duty in the core of the EU has been onerously long already.” Perhaps he’s seeking solace in the company of his close Nordic neighbours, or just looking for a helping hand.
good grief, sorry for the reposting.
@ Delaware,
So your saying that who or what ever countries have the strongest currencies are the ones that set the value of weaker currencies? Am I following you correctly here? Also even if a nation left the Eurozone, it would still use the Euro wouldn’t it? er no? :/
good question. I thought.
The article title is a bit misleading. At first, I thought it was about a common currency unit between the Nordic countries.
@ Kristofer Torkildsen
The currency markets also baffle me at times as well. But then again, recession economics tend to be completely predictable. But this is what I think. The US Government has had a general pattern of budget deficits for many years (with occasional surpluses), which makes it issue bonds. The US dollar has the status of the world’s reserve currency, particularly due to the previous Bretton Woods system (which I don’t completely understand). US bonds (as well as Japanese bonds), and the currency in general is considered a safe-haven during tough-times, because the US has yet to default on a loan (though the probability of doing so will increase significantly unless the deficits become surpluses within the next decade or two). The risk-aversion flight that has occurred with this recession has lent support to the US dollar and yen, which have risen in response to the demand.
@ U.S. Citizen
I agree. Unfortunately, not everyone in the EU is content with a common currency. In the past, some of the weaker economies could simply devalue their currency and lower interest rates to ease recessions. But with a common currency, the economic policy of the central bank is usually dictated by the largest (or strongest) economy(or economies), and this is not always the best for those weaker economies, and can even depress growth in those weaker economies. There are rumours of some stressed countries considering leaving the Eurozone, but these are just rumours and haven’t been confirmed on any level. While the probability of that happening is low (it is possible that dong so would cause even more problems), it can’t be ruled out. In this recession, almost anything can happen.
As to saving a falling currency, the Euro has a special position (though not as strong as the dollar) in the world as a reserve currency (outside of the Eurozone). It is very unlikely that big holders of the currency will want to see it become worthless, and will likely try to prop up the currency. In the past, though rare, countries have intervened to stop strengthening and weakening currencies. In addition, it is unlikely that the Euro could currently become worthless, especially considering the vast resources within the Eurozone, which would give it internal value regardless of the exchange rate with foreign countries.
@ Gus,
They do for right now, that is vary true Gus, but what will they have after everyone is useing the euro? Have you heard about the NAU euro? The soon to be Asian euro? what other currencies will there be when every nation uses the euro? What will everyone fall back on or barrow from when they all use the same currency and that begins to faulter? Just wondering is all at this point.
U.S. CITIZEN,,, THAT IS WHY CENTRAL BANKS HAVE RESERVES IN FOREIGN CURRENCY AND OTHER MECHANISMS.
Has anyone noticed? The euro is NOT stable or strong eather. Neather is the Dollar. Neather is any other currency in the world. If you haven’t noticed, the HOLE WORLD is in trouble. ALL currencies are falling and failing. Whats joining the EU going to do? or adopting the euro for that matter? The bad part of a unified currency is that when ONE goes down, they ALL go down. I wouldn’t think putting ALL my eggs in ONE basket to be the best idea to follow. ONE trip on the path, and ALL the eggs are gone. When there is more then one currency out there, one can help the other when one fails, but if ALL use only one currency, and that one fails, there is NO others to help save it from desaster.
The sheer mystery of the currency markets never fails to baffle me. For instance, can anyone please explain why the value of the US dollar, with the United States virtually bankrupt, has risen by 40% against the Norwegian krone in six months, when Norway still (despite low oil prices) has giant surpluses on both the current account and the state budget, and a sovereign wealth fund of over USD 300 billion to draw on? Or why the Euro has risen by 15-20% during the same period (making the Euro-pegged Danish krone go up similarily)? Norway’s inflation is negligible, unemployment still very low, the growth prospects better (or less bad) than in most Western countries. If it’s all about psychology, what kind of diagnosis are we talking about?
“Transition to a common currency is traumatic enough when the market is relatively calm; now is possibly the worst time one can choose for inventing new currencies.”
Thats true but i dont think we can wait, we need some usable currency right now,
to add to this problem is the fact that no one in the world trusts our centralbank or government.
Transition to a common currency is traumatic enough when the market is relatively calm; now is possibly the worst time one can choose for inventing new currencies.
The dollar and/or the British pound have/has not a bright future ahead.
THANK YOU ERIC FOR CHANGING THE TITLE OF THE ARTICLE AS I SUGGESTED. IT LOOKS MUCH BETTER NOW AND IT MAKES A MORE APPROXIMATED REFERENCE TO THE TEXT.
SCANDINAVIAN POPULATION IS ROUGHLY 25 MILLION PEOPLE. I WAS TALKING ABOUT 10. MILLION PEOPLE AS IT SEEMS TO BE THE ACTIVE WORKING FORCE IN SCANDINAVIA. THOSE PAYING TAXES AND BACKING THE SYSTEM. THAT IS WHY I SAID ” A CURRENCY BACKED BY ROUGHLY 10. MILLION PEOPLE (WORKERS).
I think Stefan Wallin (who is naturally pro-Nordic as a member of Finland’s Swedish People’s Party, the party representing Finland’s Swedish speaking minority) is right. It would be advantageous for all the Nordic countries, including Iceland, to have a single currency – the euro. We trade a lot with each other and visit each other’s countries a lot – hidden costs and exchange rate transactional fees would be eliminated over night with a single currency. These benefits would easily outweigh the quite natural emotional ties to national currencies.
What makes a stable currency? Just because a nation or group is big, does not mean its currency will be stable.
If Iceland doesn’t join Norway, maybe Iceland should join Canada! That way, it gets the Canadian dollar. Canada does not have the massive debt that the US has. Canada’s government has more financial sense than the US government has.
Someday, the USA will be like Iceland — broke — but for different reasons. America’s leaders still think they can borrow their way along. Such borrowing (and printing) will eventually totally ruin the US dollar.
Gus, please stop SHOUTING and please read the article before commenting. Mr. Wallin wasn’t suggesting an alternative to euro. If he did, he would be beating a dead horse, considering the current situation.
“There is no escaping the fact that a small currency simply cannot bear the pressures of the boundless, real-time global economy.”
That above comment by Mr. Wallin is typical of a politician who does not want to face the facts. The problesm with devaluations etc. appear because of too lax government spending and sloppy central banks – not because the currency is “too small”. It is good Mr. Wallin is the minister of sport and culture and not e.g. a minister of finance.
If it’s a stable currency you’re after, perhaps a gold standard would suffice.
well if not the euro , then one currency for all Nortic countrys . Iceland has four ways ,
1 hold on to the krona ? she´s dead we all know that.
2 take the dollar , possible ?
3 go into EU ? out of the question in my mind , why ? becouse we loose our fishing rights and right to
our power plants and more .
4 . take up norse krona and work close with Norway , that would mean that we would have to go under Norway . seems not likely to happen , but who knows maybe there is another way somewhere , that we dont see at momment .
but at the momment – Iceland is Bankrupt , thats a fact.
I think the title is somewhat incorrect huh?
@Gus: Have you read the entire article? You seem to have missed the second and fourth paragraphs. Also, you seem to be unaware of the fact that close to 25 million people live in the Nordic countries.
However, I do agree with you that all the Nordic countries would be wise to adopt the euro.
PLEASE, TO THE EDITORS OF THIS ARTICLE HERE. FINLAND AS A COUNTRY IS NOT CALLING FOR A CHANGE OF CURRENCY. SO IF ONE GUY IN FINLAND SAYS THAT, WHOEVER HE IS, IT DOES NOT MEAN THAT THE WHOLE COUNTRY WANTS THAT. IF YOU TELL THAT GREAT PER CENT OF FINNISH PEOPLE OR THE GOVERN OR SO WANTS SOMETHING LIKE THAT, THEN I COULD UNDERSTAND YOU SAYING HERE THAT “FILAND CALLS FOR…” SO PLEASE, START USING MORE REALISTIC TITTLES FOR YOUR ARTICLES. THANK YOU.
FINNISH ARE VERY CELAUS CONCERNING ECONOMIC MATTERS WITH THEIR NEIGHBORS IN SCANDINAVIA. FINLAND IS NOT READY TO GET ENGAGED IN AN SCANDINAVIAN ADVENTURE THAT MIGHT RESULT TO BE WORSE THAN BEING IN THE EU.
A SUPPOSEDLY CURRENCY BAKED BY ROUGHLY 10.MILL PEOPLE IS NOT BIG ENOUGH IN THE MARKET TO SURVIVE, OR TO BE MAINTAINED AS A STRONG CURRENCY, UNLESS CERTAIN CHARACTERISTICS COME INTO PLAY. ( SEE SWISS FRANC )
A COMMON SCANDINAVIAN CURRENCY WOULD SUFFER BIGGER FLUCTUATIONS AND PRODUCE ECONOMICAL UNBALANCE. SCANDINAVIAN ECONOMIC GROWTH AND TECHNOLOGIC DEVELOPMENT IS CONSIDERABLY LESS THAN WHAT EU COUNTRIES HAVE BEEN EXPERIENCING RECENTLY.
SOME PEOPLE STILL SEEM TO LIVE OF MEMORIES OF THE SCANDINAVIA 30 YEARS AGO. EUROPE HAS CHANGED, SPECIALLY DURING THE LAS TWO DECADES. TIME WILL TELL…