FINLAND'S decision to enter the EU's exchange rate mechanism will intensify the currency policy debate in neighbouring Sweden and may increase pressure on Stockholm to follow the Finnish move, economists said yesterday.
By joining the ERM, Helsinki showed its determination to be in the first group of countries to join economic and monetary union (EMU) from its planned start in 1999.
If Italy also joins, only the Swedish crown, the British pound and the Greek drachma would remain outside the grid, which now groups 11 of the European Union's 15 currencies.
"Finland has now become a precedent and this will put pressure on Sweden," said Mr Carlo Frakallio, chief economist at Handelsbanken Markets Finland.
However, others disagreed, saying a Swedish currency link would not take place soon.
"I think it is very, very unlikely that we do see a Swedish krona, link, at least for the time being, said Mr James McKay, international economist at Paine Webber in London.
While on Saturday, Swedish Finance Minister Mr Frik Asbrink insisted the Finnish ERM link did not affect Sweden.
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