Danish government wants to join European banking union

A small country like Denmark would benefit from a strong supervisory regime within a common European framework, believe the ministers

Lucie Rychla

The Danish government has said it would, subject to Parliamentary approval, like to join the European banking union.

In a joint statement, the finance minister, Morten Østergaard, and the business and growth minister, Henrik Sass Larsen, explained that joining the union would strengthen Denmark’s financial stability and enhance banking co-operation with other EU states.

READ MORE: Buying long, selling langer: Why the decision on a banking union is important

“We are a small country with a large banking sector, and banking co-operation can anchor an already strong supervisory and crisis management regime in a strong common European framework,” stated Østergaard and Larsen.

READ MORE: Thorning-Schmidt seeks influence in EU banking union

Improved economic stability
According to the two ministers, Denmark economic stability would improve thanks to the strengthened bank co-operation.

As a member, Denmark would benefit from a shared budget that could provide funds to help save failing banks, and the Danish banking system would be supervised by EU institutions.

READ MORE: In or out, Denmark to be affected by EU banking union

Referendum not needed
A final yes to the banking union requires a majority of parliament as Denmark would not give up its sovereignty by joining the banking union and a referendum is therefore not necessary.

While one of the government parties, Radikale, has always been strongly in favour of the membership, the other, the PM’s party Socialdemokraterne, has been sceptical.

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