Denmark plans second euro vote in 2011

Danish Prime Minister Anders Fogh Rasmussen yesterday (30 October) said he would call a referendum on whether Denmark should join the 15-member euro zone in 2011, as the global financial turmoil puts the currencies of small countries under unprecendented strain.

Attending the European Liberal Democrats’ annual congress in Stockholm, Rasmussen told EURACTIV that “the financial crisis has made it visible that there is a clear cost of staying outside the euro zone.”

“The decisions taken by the Eurogroup have a direct effect on Denmark, without Denmark having a seat at the table,” he explained, citing 2011 as a possible date for a referendum on the issue.

One of the costs of the crisis, he said, was that the Danish Central Bank was forced to raise its interest rates. Earlier this week, the National Bank of Denmark and European Central Bank concluded a global currency exchange agreement, providing emergency measures for the Danish currency.

Declaring himself “strongly in favour” of joining the euro, the Danish PM nonetheless sounded a note of caution, reminding colleagues at the congress that “of course this cannot happen without a referendum”.

In the most recent referendum in 2000, the Danes voted not to join the single currency by a margin of 53% to 47%, instead opting to keep the krone.

Meanwhile, Swedish delegates to the ELDR congress expressed their belief that a ‘yes’ vote in Denmark would have a snowball effect and lead other countries such as Sweden and perhaps even the UK to adopt the euro as well.

Sweden is a particularly complex case. Of the country’s four-party coalition government, two parties, the Centre Party (Centerpartiet) and the Liberal Party (Folkpartiet-Liberalerna) are affiliates of the European Liberal Democrats. However, while the Folkpartiet is openly pro-euro, the Centre Party remains opposed.

Jan Björklund, Swedish education minister and leader of the Folkpartiet, told EURACTIV that his party remained the most enthusiastic about joining the Euro. Meanwhile, Centerpartiet delegates said that while a majority of the party remained opposed to joining the euro zone, they also maintained a “pragmatic” approach to the issue.

“A major weakening of the Swedish krona, or the adoption of the single currency by Denmark or the UK” could see the party’s attitude shift, said the representatives, who preferred not to be named.

It is unlikely, however, that any new Swedish referendum on the euro will take place before the end of the current government’s mandate in 2010.

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