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The Danish Krone is pegged to the Euro, but that means that the ECB indirectly determines the monetary policy of the country. Every negative or positive externality that results from actions by the ECB must be internalized by the Danish central bank in order to maintain a certain exchange rate. It seems like Denmark has effectively locked itself out of any discussion regarding the value of its own currency for no reason.
Why don't they just join the eurozone so they can have an actual say in the their monetary policy?
Why don't they just join the eurozone so they can have an actual say in the their monetary policy?
Probably because they're a small country and would feel like they wouldn't have a real say. Isn't that why the UK did Brexit? They're a larger country and many people obviously didn't feel like they had a say. The European Union can be quite dictatorial.
Naomi Wolf talks about this sort of thing here from 1:05 to 7:05. She talks about the European Union specifically at 5:00.
Maybe they want to maintain the flexibility to drop the peg if they want to?
Even more so, to leave the EU if they want to.
Notably, Sweden and Norway (non-EU) do not use the euro. [By the way, the Danes voted NO to the EU treaty back in 1992, I believe it was, but it was later forced through anyway.]
By a similar token, neither do Czech Republic, Hungary, and Poland.
Notice a pattern here?
The EU, and a especially the eurozone, is a Franco-German/Benelux alliance and its weaker satellites.
In that vein, worthy of note:
1) Finland is NOT a Scandinavian country and is more paranoid about Russia, same goes for the Baltic countries;
2) Same is true to a certain extent regarding Bulgaria and Romania, but they're mostly in for it for what they can get out of it;
3) Ireland is paranoid about UK;
4) PIGS and Cyprus would be swallowed up into the southern and eastern Mediterranean.
I would expect the Danes to try to remain on the sidelines for as long as they can and/or until the EU/eurozone thing can consolidate to the point of no return, which could take another 50-100 years, if ever.
Probably because they're a small country and would feel like they wouldn't have a real say. Isn't that why the UK did Brexit? They're a larger country and many people obviously didn't feel like they had a say. The European Union can be quite dictatorial.
Naomi Wolf talks about this sort of thing here from 1:05 to 7:05. She talks about the European Union specifically at 5:00.
Sure, but they have zero control in the status-quo. If they really cared about distancing themselves from the EU, they wouldn't peg their currency. Yet, here we are decades later.
They can unpeg or readjust it should they need to.
They are holding out for a more fiscal union before taking the plunge.
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