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Danish euro vote this electoral term unlikely -sources

Published 05/18/2009, 08:10 AM
Updated 05/18/2009, 08:16 AM

COPENHAGEN, May 18 (Reuters) - A Danish referendum on adopting the euro is unlikely before the end of the current electoral term which could run until November 2011, two sources directly familiar with cabinet level discussions told Reuters.

The centre-right minority government is in favour of joining the European monetary union but new Prime Minister Lars Lokke Rasmussen has ruled out a vote this year.

"A referendum in this mandate period is not likely, even if one always hopes for something," one of the sources said on Thursday.

The second source also said a vote this term was unlikely.

The prime minister's office said the prime minister was not available for comment on Monday.

The government wants to eliminate all Denmark's opt-outs from European Union co-operation -- in the monetary, defence, justice and home affairs areas -- and has said it will hold a referendum on them when the time is right.

Lokke Rasmussen, who took office in April after fellow Liberal party member Anders Fogh Rasmussen was appointed NATO chief, has said he would hold a referendum on the exemptions only when a broad majority in parliament would back a euro membership.

Fogh Rasmussen had long aimed to secure broad support for holding a referendum before the government's mandate expires. The new PM's office has said the reshuffled cabinet's stance doesn't differ from Fogh Rasmussen's.

But some economists have said the euro seems less of a hot topic now, and the head of junior government coalition member the Conservatives, Lene Espersen, has said a referendum may well take place after this mandate period.

The crown currency in Denmark, which said "no" to the euro in a 2000 vote, is pegged to the euro in a 2.25 percent band around a central rate of 7.46038 -- or between 7.6282 crowns and 7.2925 crowns -- in the ERM-2 grid.

An opinion poll last week indicated Danes have become less keen on adopting the euro since this winter -- 43.7 percent were in favour, down from 49.8 percent in January.

The crown came under heavy pressure late in 2008 under the global financial crisis, forcing the central bank to substantially increase premiums to European rates to keep it in its trading band. It has this year regained strength.

Denmark joined the European Economic Community in 1973. The Danes have voted on all EU-treaties with the exception of the recent Lisbon Treaty.

The government has right hold general parliamentary elections before the current term runs out.

(Reporting Erik Matzen, writing by Anna Ringstrom; Editing by Andy Bruce)

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