More than money -- Denmark and the euro

By Robin Oakley, CNN.com European Political Editor

In theory the Danes are voting in their referendum on September 28 on whether or not their country should join the euro, the single European currency.

In practice it has become a much wider debate about the degree of Danish commitment to the European Union and the small nation's identity.

Many Danes are suspicious of the drive towards greater integration in the EU.

It is a debate that has brought together some strange political bedfellows. And with referendums on the euro to come both in Sweden and the UK, it is a debate that could have wide repercussions.

A No vote in Denmark could delay both those referendums. Certainly it would make it harder for pro-euro campaigners in Sweden and Britain.

And a No vote from the only country whose electors have been given the chance to vote on the subject would further weaken the embattled euro on the foreign exchange markets.

In Denmark the No campaigners include greens, communists and euro-sceptic veterans in the June Movement like Jens Peter Bonde. He says: "If you have a single currency you need a single government and a single parliament. If you are not prepared to have those then you shouldn't have a single currency."

Pia Kjaersgaard, leader of the far-right Danish People's Party, echoes the right-wing nationalist identity politics now becoming more vocal across Europe, saying that too much of Denmark's sovereignty is being given away. She has linked opposition to the euro with questions about immigration and multiculturalism and forced others into tougher rhetoric on the same subject.

Public sector women are prominent among the No campaigners, so are pensioners, farmers and fishermen. Some of the No campaigners want withdrawal from the EU.

Those campaigning Yes to the euro include Prime Minister Poul Nyrup Rasmussen, the government, most other main parties, major trades unions and leaders of business and industry.

Anders Fogh Rasmussen, head of the liberal Venstre party, says influence is the key question. "As a small country we will gain influence by getting a seat at the table where important decisions are made." With the weight of the political establishment behind them, the Yes campaigners should have a significant advantage. But the No campaigners have led most opinion polls.

Prime Minister Rasmussen: "Yes"

The Yes campaigners argue that without euro membership Denmark would be vulnerable to capital flight and currency speculation. They say the euro will offer economic stability and that since all are agreed that Denmark should continue anyway as a member of the Exchange Rate Mechanism, shadowing the euro, it will be as well to join and to enjoy influence over decisions that will affect the country.

Professor Niels Blomgren-Hansen of the Copenhagen Business School warns that European countries which do best economically are those which show themselves to be firmly committed to the EU and that if the Danes choose to place themselves on the fringe of Europe their economy will lose dynamism and inward investment will slow down.

But the Yes campaigners have suffered from the euro's poor performance on foreign exchange markets. It is not easy to persuade people to vote for joining a currency that has lost 25 per cent of its value against the U.S. dollar in 20 months.

People's Party leader Pia Kjaersgaard: Sovereignty worries

The campaign has been dominated by political rather than economic arguments. To many Danes, the EU's sanctions against Austria for including the Far Right Freedom Party in its government coalition looked like bullying of a small country. Nyrup Rasmussen was clearly relieved when he became the first European leader to announce that the sanctions on Austria were being withdrawn.

Yes campaigners concede that they were harmed too by Joschka Fischer, the German Foreign Minister, and France's President Chirac talking about a two-tier Europe. Rasmussen was at pains to stress in a recent party conference that Denmark's traditions of high taxation and a generous welfare state would not be at risk inside the single currency, but opponents have raised worries on that issue too.

The result of the referendum is likely to turn on whether voters indulge their political instincts, which in many cases involve a strong suspicion that Europe is integrating too far and too fast, or whether they listen to the business community whose voice has been so strongly in favour of Denmark joining the euro.

Whatever the result of what has been a surprisingly good-tempered campaign, the Danes certainly have one distinction. After six referendums on major European questions they are the best informed electorate in the EU on European affairs.

Watch: The euro, Denmark decides -- CNN International, September 28, 1600 ET/2000 GMT. One-hour special with live reports from Copenhagen.

Danish polls say 'no' to euro
September 16, 2000

The euro
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