Arriving in Copenhagen can be a nostalgic experience, even if you’ve never been there before. Travelling to the Danish capital from a eurozone country, you are taken back to the days before the January 1 2002 switch to euro notes and coins. Danish krone notes are larger and crisper than their euro counterparts. Their swirling geometric designs are printed in deeper, richer and brighter colours – mauve, orange, dark green and royal blue. They carry portraits of national heroes. They feel like francs, pesetas, liras, marks, or guilders.
When you break a note to pay a taxi-driver or shopkeeper, your change is a handful of chunky bronze coins. Stamped on them are the trustworthy features of Queen Margrethe II, regally reassuring you that your money is immune from rows about rebates and referendums.
When Denmark held its own referendum on the euro in September 2000, the mainstream political consensus was that membership was desirable and inevitable. The Confederation of Danish Industry and the Copenhagen Stock Exchange supported the view that Denmark should adopt the euro at some point. Danish trade unions argued that a rejection of the single currency would cost 35,000 jobs. But more than 53% of those who turned out voted to keep the krone.
It doesn’t take long to understand why. Every visitor to Denmark learns about hygge. It is usually translated as “cosiness”, but it embraces physical comfort and wellbeing, security, familiarity and companionship. The Danes value hygge – and its corollaries of good food, good drink, and good company – above everything. Copenhagen’s cheaper restaurants advertise their “cosy Danish ambience”. More incongruously, so do strip clubs and massage parlours (“a cosy go-go bar with cosy separé”). In a world of financial super-states and anonymous central bankers, the krone is safe and familiar. You might say it embodies hygge.
With the eurozone’s single currency and monetary policy suddenly looking less secure, the Danes don’t regret their decision. “We’re glad we don’t have the euro,” says one local.
In reality, though, Denmark has long seen the value of some kind of single currency. For 20 years, it managed the krone so that it tracked the Deutschmark. In 1992, the krone joined the European exchange rate mechanism. Denmark is still part of ERM II. It keeps the krone within 2.25% of a central rate of DKr7.46 to the euro. In May, Denmarks Nationalbank spent DKr6 billion ($97 million) selling kroner to stay in this range.
“We’re pegged to the euro,” says the Copenhagen-born head of the Scandinavian operations of one European bank over dinner. “We just have different notes.”
This pro-EMU outlook actually helped the No campaign in 2000. If we can have the euro in all but name, with added flexibility and the option of pulling out, the argument ran, why recalibrate our notes and coins?
Whether you arrive in Copenhagen with euros or kroner, bring plenty of them. Drink, food and fun are easy to find, but are costly. A light lunch of smørrebrød, complete with succulent pickled herring, can set you back DKr140 – more than $20. Wash it down with a glass of Carlsberg or Tuborg and you will have spent the equivalent of $30. An adult ticket for the Tivoli Gardens, the amusement park that inspired Walt Disney to create Disneyland, costs DKr68, with each ride extra. Copenhagen earned €2.15 billion from tourism last year. After a couple of days in the city, you feel that you have contributed a large proportion of that yourself.
But it’s money well spent. The food is good. Seven restaurants in Copenhagen have Michelin stars. The cafés and bars that flank the canals of the redeveloped Nyhaven district, the Louisiana modern art museum, and the annual jazz festival make this as cosmopolitan as any other northern city.
As the summer begins, students celebrate the end of their exams by dancing and singing in the streets. Tivoli has a charm that is missing from its American imitators. Instead of Mickey, Donald and Goofy, you can watch puppet shows of the fairy tales of Hans Christian Andersen, whose bicentenary is being celebrated this year. The high prices reflect the air of tasteful affluence that characterizes the city.
The famous statue of Andersen’s Little Mermaid, incidentally, has been beheaded twice (an attempted decapitation in 1990 failed), had her right arm amputated, and is regularly painted bright red, presumably by Danes who have overindulged in hygge.
The compromise over the euro has worked so far. Earlier this summer, the KFX index of the most traded shares on the Copenhagen Stock Exchange reached its highest level since 2001. Nevertheless, Copenhageners worry that their city will not graduate from a national to a regional capital. The stunning bridge across the 2km Øresund, the sound that separates Denmark from Sweden, has linked the two countries and brought northern Germany within driving distance. The idea of an Øresund Region, forming the northern tip of a commercial triangle whose other corners are Berlin and Hamburg, is taking root.
But Danish business wants more done to promote cross-border investment. According to research body the Øresund Institute, Copenhagen’s economic growth rate fell more quickly than that of other Scandinavian capital cities between 2000 and 2003. More than three-and-a-half times as many workers lost their jobs in Copenhagen as in Stockholm.
Sweden, too, is inside the EU but outside the eurozone. Some observers predict that Denmark will only ditch the krone when Sweden is ready to join the euro too, and vice-versa. Danes are dismissive of parochial politicians. “It’s absurd that we are still so separate economically,” says one banker of the relationship with Sweden. Danes might be anti-federalist, but they’re too sensible to be anti-integrationist. They are turning their backs on the economics of hygge.
