Denmark is to hold a new referendum on whether to adopt the euro and also ditch its other opt-outs from the core aspects of European Union integration, the country’s newly re-elected prime minister announced on Thursday.
Anders Fogh Rasmussen, who won a historic third term in general elections earlier this month, said Denmark’s four opt-outs – from the single currency and areas of defence and security cooperation – had become increasingly burdensome and should be scrapped.
“It’s the government’s view that the EU opt-outs damage Danish interests,” Mr Rasmussen told a press conference. “Now is the right time to let the Danes decide.” The referendum is to be held within the next four years.
Between the lines
His decision puts his authority on the line as Danes have embarrassed previous governments by refusing to approve closer European co-operation. Danes initially rejected the Maastricht treaty on closer European co-operation in 1992 and then the euro itself in 2000. The Maastricht treaty was only subsequently approved after Copenhagen negotiated the opt-outs.
Danish foreign policy has been hampered by the constitutional prohibition from working with the rest of the EU on defence and security policy.
Danish ministers have to leave the room when defence co-operation is discussed and Danish peacekeepers have had to leave international missions such as Bosnia when they have been put under EU authority.
On monetary policy, the Danish central bank keeps the krone in a narrow 2.25 per cent band against the euro and copies European central bank interest rate decisions within a matter of hours. Nevertheless, the central bank cannot vote at ECB meetings and Denmark also has to pay a slight interest rate premium over eurozone rates.
Business groups on Thursday welcomed the government’s decision. “We share all the obligations and costs of being a full member of the eurozone but we don’t get all the benefits,” said Kim Graugaard, deputy director-general of Danske Industri, the industry confederation.
Mr Rasmussen gave no clear statement whether all the opt-outs will be voted on together or in separate votes.
The government is likely to wait until after the EU reform treaty is ratified before putting the opt-outs to a vote, so any referendum is unlikely until the second half of next year.
The government hopes to avoid a referendum on the treaty and has asked a constitutional commission to report next month on whether it is required. The commission is expected to rule that the treaty can be ratified in parliament, where there is a majority in favour.
However, to remove the opt-outs a referendum is mandatory under the Danish constitution and pollsters predict a close vote.
“It’s very close between yes and no and a lot of people are very much in doubt which way to vote,” said Kim Bensby of Synovate polling agency. “It has been this way in all the votes that have taken place.”
