In a referendum last Thursday, 53 percent of Danish voters opposed joining the European Monetary Union, which was founded in 1987, in part, to set up a common European currency. Thus far, 11 of the 15 European Union member nations have adopted the currency, the euro. The dream of a “deep Europe” — a Europe with a centralized parliament that replicates the United States — hangs in the balance as Britain and Sweden contemplate joining the monetary union. The Danes, however, are wise to abstain from adopting the euro. Their hesitation to employ an unstable currency and give up economical and political independence should be commended and followed by the three other abstaining European Union nations.
Adopting the euro would have serious implications for Denmark’s socially democratic nation. The economic council of Denmark — internationally known as the “wise men” — would have to surrender taxation, public spending and regulating policies to the recommendations of the Central Bank in Frankfurt, Germany. Many lower-income Danes worry that the eventual harmonization of fiscal policies within euroland would decrease Danish welfare-centered social policies.
The spectrum of economies the European Monetary Union deals with mandates that some countries will have less fiscal power to do what they think is best for their own nation. Although Germany is close to a recession because of the Asian economic crisis, its leaders cannot raise interest rates to aid its situation because Spain, Ireland and other countries are growing strongly.
Since the euro’s introduction in January 1999, it has lost 25 percent of its original $1.16 value compared to the U.S. dollar, hitting a low of 84.38 cents last month. The Group of Seven, the world’s leading economic powers, recently decided to intervene and end the currency’s free fall has done little to bring the euro back to its original worth.
An unstable value and loss of economic power are not the only reasons to abstain from joining the monetary union. Adopting the currency will also result in a loss of political independence. There are no current examples of a large country that is not a single state having a single currency. Danish nationalists fear that the concentration of power will decrease Denmark’s sovereignty. It is a tiny nation and larger nations with more financial clout are bound to take precedence in European Union politics. One currency means one economic policy, one foreign policy, one social spending policy and one inflation rate. A “deep Europe” cannot fully encompass the many disparate financial and political systems that Europe currently contains.
To undertake the grand plan of a European federation, attitudes of nationalism within individual countries will have to change. European Union polls reveal that half of its citizens think membership is not beneficial for their country. The United States was only able to accomplish its federation of states because it was not financially and politically beneficial to remain separate. Europe’s nations have hundreds of years of experience governing themselves and will be less willing to surrender their independence. For many, the idea of a centralized Europe means denying innate cultures and national pride. Ideally, Denmark’s abstinence from the monetary union but adhesion to the European Union will influence other countries to accept the idea of a loosely joined federation with independent governmental and monetary bodies.