The objective of these measures must be to restructure the monetary union in a way that prevents such crisis situations from reoccurring in future, thereby making it unnecessary to again resort to non-standard monetary policy measures. To achieve this, we need reforms. A clear analysis needs to be carried out before these reforms can begin: What triggered these crises?
Policy mistakes following the first oil crisis – including tax reductions – and a setup for taxation not geared for high inflation contributed to a sharp increase in inflation. In search of quick fixes to more structural economic problems, consecutive Danish governments resorted to devaluating the krone. The devaluations weakened the economy.