PM: Denmark should participate in Euro financial pact

Financial pact’s discipline would strengthen confidence in economy, Thorning-Schmidt says

Denmark should join in the financial pact to fix the Eurozone debt crisis, the prime minister, Helle Thorning-Schmidt (Socialdemokraterne) told news broadcast Horisont last night. However, she refused to say whether Denmark should commit to the entire pact or just to part of it.

“I am absolutely sure that there will be elements that will be in Denmark’s interest to agree to, but I also think it’s fair that we wait until we have a final pact so that we can determine which parts to agree to,” said Thorning-Schmidt.

The question of whether Denmark would sign on to the pact agreed upon this December by the 17 Eurozone countries and supported by all of the 10 remaining EU members except Great Britain, has already caused rifts within the cabinet, even though itÂ’s not clear what the pact will ultimately entail.

Denmark is not a member of the Eurozone and shortly after the intention to create the pact was announced, the foreign minister, Villy Søvndal (Socialistisk Folkeparti), announced that he opposes full Danish participation.

His position invited harsh criticism from the Radikale, the third member of the centre-left coalition government. Thorning-Schmidt herself said any discussion of DenmarkÂ’s degree of involvement in the pact would be premature until the details were known, a position she reiterated last night.

The financial pact will be a legally binding treaty that commits countries to exercise fiscal discipline and tight control over their own economy.

“If you ask me whether it’s a good idea for Denmark to link itself to the new discipline in Europe, then I would say it is a very good idea,” said Thorning-Schmidt.

She emphasised that it makes sense to agree to the pact, since Denmark is already closely tied to the other EU countries, and because its currency is tied to the euro.

“The policies implemented by other Eurozone countries have a major influence on Denmark,” Thorning-Schmidt said. “That’s why it’s important for us also to subject ourselves to the general discipline of the Eurozone – for our own benefit because it will strengthen confidence in the economy.”

Thorning-Schmidt added that she believes the financial pact is necessary to save the euro because it will establish a discipline that has been missing in some Eurozone countries.

“Members of the Eurozone haven’t been good enough at abiding by the deals that they have made with each other,” she said. “That’s how we got into this mess.”