Danish EU presidency torn amid eurozone crisis

AFP/Copenhagen

As it takes the reins of the EU presidency, Denmark finds itself torn between its refusal to adopt the euro, its doggedness to keep close ties to the single currency and its aim to avoid a two-speed Europe. The Scandinavian country of 5.5mn people is thus in sharp contrast to Britain, the only other European Union member to have negotiated an exemption on the single currency. “We’re very concerned by the state of the euro, it’s Denmark as well that is hit” by the current debt crisis, insists Lisbeth Bech Poulsen, a member of parliament for the Socialist People’s Party, part of the centre-left coalition government in power since October. With recent opinion polls suggesting that almost three out of four Danes are opposed to adopting the currency, Denmark has excluded holding a referendum on the euro for the time being. And while Prime Minister Helle Thorning-Schmidt is a fervent pro-European, she finds herself walking on eggshells at the EU helm given Danes’ rising euro-scepticism and her own fragile governmental coalition. “There is no reason for Denmark to join a club with a lack of responsibility,” said Mette Risagen, an MP for the opposition centre-right Liberal Alliance. “The euro is a political project” that was not based on healthy economic fundamentals “and Denmark was right not to join, we see it now,” she added. And yet Denmark, contrary to Britain, has chosen to peg its krone to the euro which allows it to fluctuate within a 2.25-percent range. Despite the financial turbulence of the past two years, this policy has not been criticised or questioned, and Denmark’s economic health is in fact heavily dependent on exports to the eurozone. Copenhagen is also keen to avoid any isolation within Europe, and one of its main goals during its EU presidency is to “build a bridge” between the 17-member crisis-hit eurozone and the 10 non-euro members of the EU. From this point of view, the Franco-German dominance in the running of EU affairs has Copenhagen concerned. “Bridge building means to be a presidency listening to what people want and making sure that we’re not ending up with a ‘Europe 2’, meaning France and Germany, but Europe 27,” Danish Economics Minister Margrethe Vestager said. “There are a number of forces that want to divide us so we should (do) everything possible to stay together,” she said. In a bid to stick together, Copenhagen aims to sign on to a new budget pact being hammered out and aimed at enforcing tighter budgetary discipline among eurozone members and any others that want to join. Not that doing so would be seamless for Denmark. “We don’t want to join the fiscal compact for the sake of the euro but for the sake of the Danish economy,” Finance Minister Bjarne Corydon said, adding that Denmark’s economy must be “at least as disciplined” as eurozone ones. Denmark has on the whole opted for a conciliatory approach with the eurozone on other issues, and is therefore opposed to British and Czech efforts to organise the 10 non-euro members into an informal group to provide a counterweight to the French-German dominance in the eurozone. “We’re not in any way interested in participating in a ‘non-euro group’. We occasionally meet and have dinner and discuss this and that, it’s not organised,” Vestager said.