Danish Euro Skepticism at Highest Since Currency’s 1999 Debut

Danish voters now regard the euro with more scepticism than at any time since the single currency’s introduction in 1999 as the crisis in southern Europe enters its fourth year.

Only 12.3 percent of voters would definitely support euro adoption, while 15.7 percent said they might support a switch, according to a poll published today by Danske Bank A/S. Almost 70 percent of Danes want to keep the krone, according to the poll, which was conducted by Statistics Denmark.

“This is the lowest ‘Yes’ score polled since we launched our Economic and Monetary Union survey in 1999,” Steen Bocian, Danske Bank chief economist in Copenhagen, said in a statement.

Denmark’s government estimates the economy will contract 0.4 percent this year, matching a slump in the 17-member euro area. Still, a public debt load that’s less than half the average of the single-currency bloc has allowed Denmark to emerge as a haven from the turmoil further south. The government of Prime Minister Helle Thorning-Schmidt pays about 26 basis points less than Germany to borrow over 10 years, while investors pay Denmark to hold its two-year debt.

“The European debt crisis grabbing the headlines since late summer 2011 has no doubt made Danes very sceptical about full EMU membership,” Bocian said. “Our latest survey indicates that it will take a lot to eliminate this scepticism.”

Rates Declining

That’s helped drive down mortgage rates, with refinancing auctions for the bonds backing Danes’ home loans resulting in record-low yields this month.

The central bank, which uses monetary policy to defend the krone’s peg to the euro, cut its deposit rate to an unprecedented minus 0.2 percent in July as a capital influx threatened to strengthen the Danish currency.

Danes last went to the polls to vote on the euro in 2000, 53 percent rejected the single currency. The government hasn’t set a date for the next referendum.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net

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