The government yield spread to Germany peaked at 12 percentage points (slide 10 – long-term yields). This level of interest rates would be devastating to any economy. The pegging of the Danish krone to the D-mark in 1982 marked the beginning of a long period in which structural imbalances in the economy and fiscal inadequacies were gradually addressed politically.
But this was not without setbacks. The Danish economy has performed relatively well – also after the introduction of the euro in 1999. This can be attributed to a stability-oriented economic policy with a medium-term focus, and to the implementation of structural reforms in the labour market and elsewhere during the 1990s.