COPENHAGEN (Reuters) - Danish Prime Minister Lars Lokke Rasmussen said Tuesday that Denmark met neither the political nor the economic conditions for holding a new referendum on adopting the euro currency.
Danes rejected the euro in a 2000 referendum, but warmed towards the European currency at the end of last year when the financial crisis deepened and consumers found their wallets hit by high interest rates.
Rasmussen's centre-right government favours the euro and has hoped to hold a referendum before the next elections in 2011. But Rasmussen has repeatedly said a vote would not be held until it was sure to win a majority in parliament.
Up to now, the pro-euro bloc has lacked clear political support for joining the euro, but now Rasmussen acknowledged that Denmark would not even meet the economic requirements for euro zone membership.
"As it appears now, one must expect that for a period we will not fulfil the accession criteria for euro membership," Rasmussen said in a speech marking the opening of the autumn session of parliament
"Therefore, neither the political nor economic preconditions for a referendum on the euro are fulfilled at this moment," he said.
The finance ministry Monday cut its forecast for GDP this year to a drop of 4 percent from an earlier 3 percent fall and said that Denmark was likely to be rapped by European economic and finance ministries for failing to meet the euro zone's convergence criteria on deficits.
The new assessment of the fiscal policy situation points to a 2010 deficit of about 90 billion crowns (16.4 billion pounds), or nearly 5 percent of GDP, far beyond the Maastricht treaty limit of 3 percent, the finance ministry said Monday.
"As long as we do not fulfil the convergence criteria, we cannot vote to join the euro," Rasmussen told reporters.
"The economic crisis has underscored the fact that it is in Denmark's interest to take part in the euro," Rasmussen said in his speech to parliament.
"We have seen an energetic EU that has stood together to combat the crisis," Rasmussen said. "We have got confirmation that euro cooperation is fully consistent with a policy that promotes growth and employment," he said.
"But paradoxically enough the crisis also means that Denmark is headed for a situation where it is not at all certain that we could be engaged in euro cooperation," he said.
European Union member Denmark's position as a euro-outsider is one of the Nordic nation's opt-outs on EU cooperation in the areas of monetary policy, defence, justice and home affairs.
Rasmussen said the government would carry out a new evaluation of Denmark's EU opt-outs and continue to work to remove them.
"The opt-outs shut the door to our participation in important decisions," he said.
But Rasmussen said the effort to remove the opt-outs would be delayed beyond 2010.
Nordea Markets chief analyst Anders Matzen said the prime minister's speech "effectively put the prospect of another Danish referendum about the euro on hold in this electoral period (to 2011)."
Matzen noted that recent opinion polls have showed only a marginal majority of Danes in favour of the euro. "Experience from previous referenda show, that such a majority can quickly evaporate in the run-up to such a referendum."
(Reporting by Erik Matzen and John Acher)
