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Danish report Danish report
by Euro Reporter
2011-03-06 10:05:35
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Rasmussen seeks more voice in EU debate

Danish Prime Minister Lars Lokke Rasmussen said Denmark would have more clout in EU affairs if it adopted the euro. Denmark will assume the EU presidency in January 2012, a rotating responsibility. However, in 2000 voters in Denmark rejected adoption of the euro.

"There are both the euro pact and the presidency, issues which make it relevant to consider whether we should modernize our relations with the EU," Rasmussen said, EUobserver reported Friday, referring to adoption of the currency now shared by 17 nations.

A referendum could be put to Danish voters before summer as EU countries debate a "Competitiveness Pact." EU leaders are scheduled to meet in June to vote on the pact. Rasmussen is seeking a larger voice in debate over the pact, and adopting the euro would give them more legitimacy in the discussions.


Smoke is cheap

It is cheaper to smoke in Denmark today than it was in 2002. Adjusted for 2011 prices, a pack of 20 Prince cigarettes cost 42 kroner. Today it costs just 38 kroner, a price decrease of nine percent, according to the Tax Ministry. “That’s an absolutely absurd development,” Charlotta Pisinger, chairman of the Danish Association for Smoking Research told Politiken newspaper.

“We know so much about how many people are killed by smoking, how many diseases it causes, and what a burden it puts on the healthcare system.”  That’s why health experts are calling on the government to raise the price of cigarettes. In support of their case, they cite the trend in Norway, where a 21 percent hike in the cost of cigarettes since 2002, was accompanied by a 50 percent drop in young people smoking. A pack of cigarettes today in Norway costs the equivalent of 80 Danish kroner.

“Numerous studies have proven that the higher the price, the less people smoke,” said Pisinger, who added that both the number of smokers, and the number of cigarettes smoked falls as prices rise. In his presentation of the government’s plan one year ago, Prime Minister Lars Løkke Rasmussen said he would like to make smoking more expensive. But new cigarette taxes are not on the table today, said Troels Lund Poulsen, the tax minister. He said that a higher tax on cigarettes would only encourage more Danes to smuggle cheap cigarettes over the border.


Denmark eyeing referendum on euro

The EU's economic convergence plans are forcing Denmark to reconsider its euro opt-out, with a referendum on "modernising" Copenhagen's relation with Brussels possibly taking place by June.
With plans for a "Competitiveness Pact" currently being drafted by EU institutions to replace a Franco-German draft on pension’s harmonisation and constitutional "debt brakes", Denmark does not want to be left out of the decision-making process, due to not being in the single currency. After meeting a group of MEPs on Wednesday, Danish Prime Minister Lars Lokke Rasmussen said his countrymen should reconsider the opt-outs in a referendum, especially since Denmark will take over the EU's rotating presidency on 1 January 2012. "There are both the euro pact and the presidency, issues which make it relevant to consider whether we should modernise our relations with the EU," he was quoted.

The referendum may take place before the summer in order to give Mr Rasmussen a clear popular mandate when he participates in a June summit where EU leaders are set to decide on the competitiveness pact. "It depends on what the pact will consist of exactly, but clarity [in a referendum] may be needed," he said, while stressing that he has no intention of trying to "sneak" Denmark into the euro. "Currently, there is a no to the euro that is in place and that limits the degree to which we can be part of eurozone co-operation," the premier explained. Danes rejected adopting the euro in a referendum held in 2000.

But this time around, poll figures indicate a slight majority in favour of scrapping all three Danish opt-outs (the euro, EU defence policy and justice and home affairs). Dubbed the "Big Bang model", a referendum on all three opt-outs may be more successful than holding a referendum just on euro adoption, with 45 percent of Danes in favour of this move, according to a Megafon poll carried out in February. But the margin is still narrow, with 43 percent opposing it and 12 percent undecided.

A strong advocate for Denmark's euro-accession is Belgian Liberal MEP Guy Verhofstadt, who points to the fact that the country's economy is already fully integrated into the euro zone and that the Danish krone is pegged to the euro. In addition, he believes that there is a need for a small country like Denmark to counter-balance Germany and France who "dictated" the competitiveness pact being currently drafted for the 17 member-strong euro zone. Scrapping the EU opt-outs could also serve the Liberal premier ahead of general elections in the autumn as both opposition parties are internally split on the issue. But some Danish politicians warn against holding a referendum. They point to Mr Rasmussen's low popularity suggesting voters may use the opportunity to sanction the government.

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