First, let me describe the effects of the introduction of the euro on monetary policy in Denmark. Denmark maintains a fixed-exchange-rate policy vis-à-vis the euro area. Since the start of the third stage of the Economic and Monetary Union in the EU on 1 January 1999, the formal framework for the fixed-exchange-rate policy has been the European Exchange-Rate Mechanism, ERM II.
Denmark participates in ERM II with a narrow fluctuation band of +/- 2.25 per cent around the central rate. The central rate is a conversion of the central rate of the krone vis-à-vis the D-mark in the previous European Exchange-Rate Mechanism (ERM I), and the central parity of the Danish krone vis-à-vis the anchor has now been unchanged for more than 19 years.