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Devaluation Lessons in Denmark Show Cost of Race to Bottom

  • Danish finance minister would like to join euro right away
  • Voter skepticism means referendum not planned in near future
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Don’t devalue. That’s the simple message from the Danish government, whose finance minister this week affirmed his nation’s commitment to a fixed currency regime.

If it were up to him alone, Denmark would join the euro zone right away, Finance Minister Claus Hjort Frederiksen said in an interview on Tuesday in his Copenhagen office. He dismisses arguments, such as that brought forward by Nobel Laureate Paul Krugman, that the euro has shackled economies to a rigid system that’s undermining growth in parts of the currency bloc.