Denmark and the euro

Denmark uses the krone as its currency and does not use the euro. This is because Denmark negotiated the right to opt out from using the euro under the Maastricht Treaty in 1992. In 2000, Denmark held a vote to decide if the country should start using the euro, but the majority of people voted against it.

The Danish krone is connected to the euro through a system called ERM II, which means the exchange rate between the krone and the euro stays very close. Even though some political groups in Denmark support having another vote about the euro, others do not. Public opinion about the euro has changed over time, with support growing after the euro was introduced but falling after financial problems in 2008 and 2011.

Denmark shares a border with Germany, which uses the euro, and Sweden, which is required to adopt the euro in the future if it meets certain conditions. Even though experts often say that tying a currency to another can be difficult, Denmark has successfully kept the krone linked to the euro since 1999.

Current Status – ERM II

When Denmark was ratifying the Maastricht Treaty in 1992, a vote was needed because of Denmark's rules. The vote was close, but more people voted "no" than "yes." Because of this, Denmark was allowed to choose not to use the euro later.

Instead, Denmark uses a system called the Exchange Rate Mechanism II, or ERM II. In this system, the Danish krone is tied closely to the euro. This means the value of the krone can only change a little bit compared to the euro. Since 2026, Denmark is the only country still using ERM II.

The krone has been part of ERM II since 1999. This helps keep prices stable in Denmark and makes trading with other countries easier because the exchange rate does not change much. The Danish central bank works to keep the exchange rate within the set limits.

History

Early monetary unions in Denmark (1873–1914)

On May 5, 1873, Denmark and Sweden agreed to use a common currency based on gold, forming the Scandinavian Monetary Union. Before this, Denmark used the Danish rigsdaler, which was divided into 96 smaller coins. In 1875, Norway also joined this union. The new currency, called the krone, replaced the old currencies at set rates. This union lasted until 1914 when World War I ended it, though the names of the currencies stayed the same in each country.

European Monetary System and pre-euro monetary co-operation

After the collapse of a global system that kept exchange rates stable, European countries wanted to work together to keep their money values steady. This led to agreements like the European Currency Snake, which began in 1972. Denmark joined this system but faced challenges and had to leave briefly before rejoining. Later, the European Monetary System was created in 1979, which included a way to keep currencies close in value. Denmark was one of the first countries to join. Because of economic troubles in the 1980s, Denmark decided to keep its currency, the krone, tied closely to the German D-mark.

Pre-eurozone documents (1992–1999)

The Maastricht Treaty from 1992 said that European Union members should use the euro, but it allowed Denmark to choose not to. Denmark decided to keep its own currency after voting against the treaty in 1992. Later, they agreed to follow some rules that prepared for the euro without actually using it. Denmark wanted to make sure its economy stayed stable and could join the euro later if they chose to.

Euro referendum (2000)

Main article: Danish euro referendum, 2000

In 2000, Denmark held a vote to decide if they should use the euro. On September 28, 2000, people voted, and 53.2% decided not to join the eurozone, while 46.8% voted yes. Many leaders and news outlets supported using the euro, but some major parties did not. If the vote had gone the other way, Denmark would have started using the euro in 2002. The debate was affected by the euro’s value dropping around that time.

Possible second euro referendum

Main article: Danish European Union opt-outs referendum

In 2007, Denmark planned to hold another vote about whether to keep some special rules, including one about the euro. But because of problems with the euro and changes in European politics, they delayed the vote. Later governments said they wouldn’t hold this vote during their time in office. The current prime minister has promised not to hold another euro vote while she is in office.

Usage today

Some places in Denmark, like museums and airports, accept the euro, especially for tourists. But usually, people still get change in Danish kroner. Ferries between Denmark and Germany often show prices in both kroner and euros.

On January 10, 2020, Denmark stopped allowing the use of the 500 euro note to help prevent illegal activities. At that time, this note was worth more than three times the largest Danish banknote. The European Central Bank disagreed with this decision.

Consequences of adoption of the euro

If Denmark were to adopt the euro, its monetary policy would move from the Danmarks Nationalbank to the ESCB. This could limit Denmark’s ability to make its own monetary decisions. However, past actions show that Denmark’s central bank usually follows the ESCB’s changes anyway.

Right now, Denmark is not part of the ESCB’s decision-making group, which some leaders feel is a problem. The ESCB also does not help protect Denmark’s currency exchange rate, which is currently managed by Danmarks Nationalbank and the Danish government. During difficult times, it can be hard for a small country to protect its currency alone.

Adopting the euro might lower costs when trading with eurozone countries, make foreign markets clearer for Danish shoppers, and reduce interest rates, which can help the economy grow.

During the euro area crisis, European leaders created the European Financial Stability Facility to help keep Europe’s finances stable. Denmark chose not to support one part of this facility, unlike some other EU countries.

Public opinion

People in Denmark have been asked many times if they think the country should stop using the krone and start using the euro instead. The way the questions are asked can change a little.

From 2002 to 2010, more people seemed to like the idea of using the euro. But during a big money problem in Europe, support dropped quickly. In May 2012, only 26% of people liked the euro, while 67% did not. By March 2018, 29% supported the euro and 65% did not. By May 2024, support had started to grow again, with 34% in favour and 58% against.

Danish autonomous territories

The Faroe Islands use their own money called the Faroese króna, which is very similar to Denmark's krone. Danish shops and money changers might not accept Faroese money, but Danish banks will trade it for Danish krone at an equal rate.

Greenland uses regular Danish kroner but once thought about having its own money like the Faroe Islands. Those plans stopped, and Greenland still uses Danish coins.

Both the Faroe Islands and Greenland are part of the Kingdom of Denmark but are not in the EU, so they don’t usually join EU votes. It’s still not clear if they would use the euro if Denmark decided to.

Possible euro coin design

Before Denmark decided in 2000 whether to use the euro, the country's bank and the Royal Mint were asked to come up with ideas for what Danish euro coins might look like. They thought about using designs from Denmark's existing 10- and 20-krone coins, with Queen Margrethe II on one side. But Denmark chose not to switch to the euro at that time, so if it ever does in the future during the reign of King Frederik X, a new design would need to be made.