Denmark and the euro

Denmark uses the krone as its money. It does not use the euro. This is because Denmark agreed to keep its own money under the Maastricht Treaty in 1992. In 2000, Denmark had a vote to decide if it should use the euro. Most people voted no.

The Danish krone is linked to the euro through a system called ERM II. This keeps the exchange rate between the krone and the euro very close. Some people in Denmark want another vote about the euro, but others do not. Opinions about the euro have changed over time.

Denmark shares a border with Germany, which uses the euro, and Sweden, which may use the euro in the future. Even though it can be hard to link currencies, Denmark has kept the krone linked to the euro since 1999.

Current Status – ERM II

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

Instead, Denmark uses a system called the Exchange Rate Mechanism II, or ERM II. In this system, the Danish krone is linked closely to the euro. This means the value of the krone can only change a small amount 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 steady 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. In 1875, Norway also joined this union. The new currency, called the krone, replaced the old currencies. This union lasted until 1914 when World War I ended it.

European Monetary System and pre-euro monetary co-operation

After a global system that kept exchange rates stable collapsed, 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. Later, the European Monetary System was created in 1979. 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.

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 most decided not to join the eurozone. If the vote had gone the other way, Denmark would have started using the euro in 2002.

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, they delayed the vote. Later governments said they wouldn’t hold this vote. 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. The European Central Bank disagreed with this decision.

Consequences of adoption of the euro

If Denmark were to adopt the euro, its money decisions would shift from the Danmarks Nationalbank to the ESCB. This could make it harder for Denmark to make its own money choices. But in the past, Denmark's central bank often followed the ESCB's changes.

Right now, Denmark is not part of the ESCB's decision-making group. Some leaders think this 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. It can be tough for a small country to protect its currency alone.

Adopting the euro might lower costs when trading with eurozone countries, make foreign markets easier for Danish shoppers, and reduce interest rates. This 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 often been asked if they think the country should stop using the krone and use the euro instead. The way the questions are asked can change a little.

From 2002 to 2010, more people liked 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. It is very similar to Denmark's krone. Danish shops might not accept Faroese money, but Danish banks will trade it for Danish krone.

Greenland uses Danish kroner. It once thought about having its own money but stopped those plans. Greenland still uses Danish coins.

Both the Faroe Islands and Greenland are part of the Kingdom of Denmark but are not in the EU. 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, its bank and the Royal Mint thought about ideas for Danish euro coins. They considered using designs from Denmark's existing coins, with Queen Margrethe II on one side. But Denmark decided not to switch to the euro then. If it ever does in the future during the reign of King Frederik X, a new design would need to be made.