LO agrees pact on Euro

With Sweden voting on joining the Euro later this month, LO the largest union confederation, has reached an agreement with the Social Democratic government on protecting the economy if the country votes "yes".

The agreement provides a new tax and spending framework which aims to make it easier for the Swedish economy to withstand external shocks once inside the Euro without cutting welfare benefits, jobs or pay.

It includes increasing the planned budget surplus from 2.0% to 2.5% of GDP so that there is more room for manoeuvre if the economy hits problems.

For Wanja Lundby-Wedin, the president of LO, which represents around 1.9 million workers, the deal will mean that "our members will feel safer".

But her words do not mean that LO will abandon its current neutral position on the issue and some unions within the confederation are campaigning against membership.