The decisions on this and certain other matters have been deferred, however, and will now be taken by those countries that join the euro area from the start. TARGET is to be tested this summer and is to be fully ready for use by 1st January 1999. Summary and conclusions Most of the evidence today suggests that the economic and monetary union will move to Stage Three on 1st January 1999. For Sweden the question is whether we should join the euro area from the start, wait a while or try to remain outside for good. I hope that we will soon be having a more lively debate on this very important issue. The question of EMU has now been largely examined and discussed by the financial sector, the authorities and big businesses. The time has come to spread the debate and information to other groups in society. In time the krona will lose ground Even if Sweden decides to stay outside, the single currency will affect us. Our analyses, together with other organisations, of what might happen in that event point to a relatively sizeable use of euro, particularly in the securities market. In time, the use of euro may spread like water rings to other parts of society. The extent to which the euro is used will among other things depend on its strength relative to the krona but also on market assessments of the probability of Sweden joining.
The nub of the matter is that euro services will be called for whether or not we join the area. The use of euro will be directed by the market. Naturally the euro would not replace the BIS Review 41/1997  -3-  krona as Sweden's currency if we remained outside but we could probably expect a demand for euro from some agents. According to the Stockholm Stock Exchange, trading in the shares of major companies will gradually switch to euro because handling two currencies would be too costly. In time the money and bond market may be affected in that renewals and new issues are denominated in euro and account for a growing proportion of bond trading. According to the Securities Dealers Association, for instance, large companies and financial markets will also become less interested in kronor. It is too early to say how this transition from kronor to euro will occur in detail. Neither can we foresee how quickly it will proceed or how far. Probably it will be gradual and ultimately also affect private individuals. If the euro turns out to be stable and strong, households will also prefer to have pension savings, for example, in euro securities. Thus, this scenario points to a development where financial markets, companies and even individuals are active in euro, while the public sector continues to use kronor as declared, for instance, in the report from the Ministry of Finance on practical preparations for the euro.