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Danes to vote on euro in 2010

Fri, Jan 23 2009, 15:19 GMT
by Danske Research Team

Danske Bank A/S


It now looks pretty likely that the Danes will be asked to vote on euro membership in 2010. Prime Minister An-ders Fogh Rasmussen said in the past week that he had a plan for how Denmark could make its way into the euro. The PM intends to call a euro vote when the Lisbon Treaty has been adopted, following a second referendum in Ireland. This probably means a Danish vote could be held in 2010, the PM believes.

Rasmussen's plan implies that the Socialist People's party (SF) is changing its position on euro membership and supporting a Yes. This would prepare the ground for a referendum and raise the likelihood of a Yes out-come. The SF drew 13% of the vote in the latest elec-tion, and a Gallup poll conducted last summer shows 53% of SF voters opposing euro membership, with 10% undecided. As such, the SF's backing of the euro would go a long way towards securing a Yes.

SF Chairman Villy Søvndal also suggested in the past week that a euro vote could be held in 2010. To back a Yes vote, the SF requires that the euro should be changed to give a higher priority to jobs, counteract speculation and encourage green investment. How-ever, the SF's demands are pretty vaguely stated, and it should be possible to find a way of meeting them in time for a referendum to be held next year.

During the financial crisis, it has become evident that pursuing a fixed exchange rate policy without going the whole hog comes at a cost. And as hardly anyone be-lieves Denmark should give up its fixed exchange rate, it is hard to see why Denmark should remain outside the euro. And, in fact, euro sentiment in Denmark has become far more positive during the current crisis, though the Yes lead already seems to be shrinking again.

Published on  Fri, Jan 23 2009, 15:23 GMT


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