CHENNAI: Though Denmark has kept itself out of the Euro zone, the Danish currency kroner "shadows" the euro as per official policy, according to Ole Lonsmann Poulsen, Danish Ambassador to India.

"Unlike the U.K. and Sweden, whose currencies are managed independently of the euro, the Danish kroner is for all practical purposes linked to the euro through official intervention whenever the spread between the euro and the kroner exceeds a stipulated range. This is intended to impart stability to the currency and the economy, even though it entails a small transaction cost,'' Mr. Poulsen said.

Talking to The Hindu here on Tuesday, Mr. Poulsen said Denmark's policy at the same time gave it scope for freedom of action in the unlikely event of an economic crisis warranting a delinking from the Euro zone (which comprises 12 leading members of the European Union, including Germany, France and Italy).

Mr. Poulsen visited some of the Danish companies in and near the city, including Grunfos Pumps, Danfoss Industries and Vestas Wind Energy Systems, and is scheduled to visit F.L.Smidth on Wednesday.

Two-way trade

Talking of the enormous changes that he was seeing in India in his present stint, the Ambassador said Danish companies were keen on realising the full potential for two-way trade and investment in India.

He said he was glad to see the revised and more optimistic prognosis of the Indian economy and projection of a sustainable eight 8 per cent growth brought out by Goldman Sachs last week but added that assumptions in relation especially to education and infrastructure should be kept in mind. Also, there was a need for meeting India's energy needs to sustain growth.

Welcoming the distributive concerns of the present government at the Centre in India, Mr Poulsen said any drastic reduction of support to the farm sector in India would have serious social consequences.

The government could not neglect social concerns in its pursuit of economic growth, but in the long term economic growth itself would not be sustainable unless employment was created in the industry and service sectors for the vast population that now depended upon agriculture, he added.

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