Sailing alone : a historical-cultural explanation why Denmark has not introduced the European common currency

Denmark is the only country that is participating in the European Exchange Rate Mechanism (ERM-II), but intending to stay out of the European Monetary Union (EMU). The country meets all of the criteria for membership in the euro, is denying itself the potential benefits, political and economic, of full membership, yet has effectively surrendered control over its own monetary policy. This "halfway" policy is not easy to explain according to many academic approaches, including small state theory, realist politics, and liberal economics. Academics have attempted to explain the reasons for the rejection of the euro, breaking down into four main theories, three of which focus on the referendum results which led to the Danish public's rejection of the euro. They are, "Second Order" theories, which explain the referendum outcomes as tangential to the population's actual feelings on E M U or European integration; "Values Oriented" theories which explain the results based on the values and beliefs of the Danish electorate; "Utilitarian" theories which explain the rejections from a self-interested, utilitarian assessment of voting patterns. And a fourth school sees the referendum results as red herrings, believing that deeper structural or economic factors have shaped the country's policy. This paper attempts to form a synthesis of the first three schools, extrapolating on the "Values Oriented" theories, to explain the popular rejection, but elite support for EMU. The historical cultural argument, which has been developed in the historical field, and has been used with regard to some other areas of Danish euroscepticism, explains the contradiction. Ultimately, the Danish no-votes, and abstention from full participation in the E M U stem from the deeply rooted Danish political traditions of Grundtvigian egalitarian smallness and anti-elitism. The ambivalence, and apparent contradiction of the "half-in" policy stems from the eroding importance of these political traditions as a result of globalization and europeanization, as the political elite embraced the European project. This break down of political traditions represents the first significant shift in Danish political culture since the Second World War.Arts, Faculty ofCentral, Eastern, and Northern European Studies, Department ofGraduat