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EMU poll – Slim Yes majority despite the euro’s woes
Thu, Mar 25 2010, 13:42 GMT
Statistics Denmark regularly surveys the attitude of the Danes to the euro on behalf of Danske Bank. The March poll shows the Yes side still having a slight lead – although the lead has shrunk considerably since the end of 2009. Looking solely at those who are certain how they would vote, the No side has in fact a slight majority.
Therefore one cannot conclude on the basis of this poll that a vote today would result in a Danish Yes to adopting the euro. Comparing the results against our last survey in December 2009, the most noticeable shift is in the number of certain No voters. Clearly this has to be seen in light of the uncertainty that the Greek budget problems, for example, have caused. The construction of EMU has been questioned, particularly in the international arena, and this has of course also affected Danish voters.
In addition, the Danish central bank (Nationalbanken) has been able to narrow the official interest rate spread to just 5 basis points over the past year. This makes the cost of not being a euro nation appear considerably less than it did just one-and-a-half years ago, when the rate-spread briefly rose to 175bp. That said the excess interest rate in Denmark is in reality still considerably higher than before the crisis.
The March poll showed that 39.4% of Danes questioned would definitely vote Yes to Denmark participating in EMU, while 41% would be certain No voters – in other words a narrow majority for the No camp. However, the balance shifts if the less certain voters are included. After adding the 12% who are in doubt but lean towards voting Yes and the 6.4% uncertain No voters to the equation, the Yes camp manages to achieve a lead of 4.1 percentage points. This is in reality a very modest lead given how many voters are actually in doubt about how they would vote.
Hence the advance enjoyed by the Yes camp during the financial crisis has evaporated. Doubts have apparently grown as a result of the challenges faced by the single currency in connection with the financial crisis. The head of Nationalbanken, Niels Bernstein, emphasised this week that Denmark having a fixed exchange rate policy, but not actually being a member of EMU had occasioned additional costs and risks during the crisis. Our March poll was, however, conducted before Bernstein’s comments were released.
It remains uncertain when the Danes will again vote on adopting the euro, but a referendum would be no easy matter, politically speaking, for the current government. First, there is the risk of the vote going against the government and second the government’s majority is reliant on the support of Dansk Folkeparti (Danish People’s Party), who are opposed to euro participation. It therefore looks likely that the government will wait with a referendum until after the next general election, which must be held by November 2011 at the latest. Finance minister Claus Hjort Frederiksen has been quoted as saying the government would “consider” a Danish referendum on the euro once the crisis has passed. This clearly suggests that a vote is not around the corner.