Denmark Rejects the Euro

Nobody was really surprised when Danish voters rejected the adoption of the euro in a referendum held Sept. 28. It had happened before. But the fact that 53 percent of the Danes disliked the idea triggered soul-searching in other European countries about what European integration is and should be all about—especially in those states whose decisions are still pending, namely Britain and Sweden, which both are to vote on the implementation of the euro as well. Now, it will no longer be possible to argue that Britain and Sweden would be left isolated without the euro—“Europe’s sickly single currency,” according to Stephen Castle of London’s centrist Independent (Sept. 29), or “play money” as labeled by right-wing French politicians.

Britain kept a particularly wary eye on the outcome of the referendum held by its tiny neighbor across the North Sea. The common view was that British europhiles could learn a lot from the Danish defeat while crying over their Tuborg beer. “Think of it as a challenge,” wrote Mark Leonard in London’s liberal The Guardian (Sept. 30). “The Danish “Nej” is meant to be the end of our debate. But history may see it as a moment when the pro-Europeans finally came out fighting….Public opinion [in Denmark] has been hardened by six referendums on European questions in the past 20 years…In Britain, there is still everything to fight for….Whatever the political strategy, Denmark has shown how the referendum will be won or lost by that most elusive of political commodities: public trust. This will be more important than the detail of economic arguments and will have to come from politicians, not business leaders.”

This was not the first time Denmark’s citizens expressed their resistance to integration into the European Union. In 1992, they initially rejected the Maastricht Treaty, only to adopt it later with small changes (similar to those granted to Britain, namely being allowed to stay out of the single currency indefinitely as well as to refrain from further integration in defense, justice, and home affairs). Then, in 1993, Denmark threatened to destroy the entire treaty by rescinding the ratification that each member state must give. They eventually overcame that hurdle as well.

The referendum on the euro—the first time that a member of the European Union was asked to vote directly on whether to move to the European currency—represented the will of most Danes. Eighty-six percent of eligible voters came to the polls; Danish Prime Minister Poul Nyrup Rasmussen, a staunch euro advocate, shed tears while announcing the results. But no domino effect was expected to move across the continent, and European leaders kept their disappointment diplomatically in check, believing that the last word had not yet been spoken. Most Europeans saw Denmark’s decision to stick to the Danish Krone for the time being as just another signal from a small country stubbornly defending its independence and national identity. It would have little if any impact on Europe’s common currency market, and thus could not undermine or sabotage the larger European endeavor.

“The Danes are always against something at first,” remarked Thomas Gack of Berlin’s centrist Der Tagesspiegel. “And later, after first kowtowing to their national identity, they come around.” Gerold Osterloh mocked in Berlin’s centrist Berliner Morgenpost (Nov. 7): “The Vikings don’t want to lose their identity—but nevertheless [want to] be part of the game.” And Peter Dausend suggested in Berlin’s conservative Die Welt (Nov. 7) that the Danes “are somehow different….The Swedes call them ‘the Sicilians of Northern Europe.’…No wonder, that these opponents of the euro talk about a revolt of the people against the elite, a struggle between bus drivers and business-class travelers….The weakness of the euro paired with the European sanctions against Austria didn’t help in that matter….The Danes don’t appreciate this climate. In this, they act as other states. At least as other small ones.”

So, the Danish rejection did matter, for it presented a challenge to the 11 Economic and Monetary Union (EMU) members (soon to be 12, with Greece joining January 1, 2001), of what the future might hold—especially for those still reluctant or unable to join the European common market. One thing became strikingly clear: Namely that Denmark, a loyal and economically stable European country, whose currency is already linked to the euro and since 1982 to the German mark, still feels reluctant to fully embrace euro-integration. The reasons for that go deep. “The economic implications for the Danes of joining the euro were not that great,” explained Patrick Wintour in London’s liberal Guardian (Sept. 29). “That suggests the Danes recognized that there were more important constitutional issues at stake in the referendum in terms of loss of political sovereignty.”

“Have the [Danes] spoken for the many average citizens in those member states for whom Europe remains a distant concept?” asked Peter Hort in Frankfurt’s conservative Frankfurter Allgemeine Zeitung (Sept. 29). “Have [European leaders] not now been issued the bill for their arrogant behavior toward Austria? Does the entire European project not remain the dream of a political elite that has lost touch with increasingly apathetic E.U. citizens? Maybe that is the true European crisis.”

“It cannot be of no importance that one of the E.U. member states rejects by a substantial majority one of the community’s grand projects,” said Klaus-Dieter Frankenberger in the same paper. “...The Danish vote addresses the powerful forces of globalization and Europeanization….Identity is not an eccentric trait of nostalgists, and right-wing populists do not own the copyright to it….That is why the Danish vote does matter….It is about power, about a new equilibrium between big and small, between a capacity to act effectively together and the preservation of national character. The Danes have decided in favor of the latter. We should not criticize them for that.”

Will Hutton of London’s liberal weekly The Observer (Oct. 1) disagreed. “The Danes were wrong. Without the euro, Europe will be swallowed even further into the ‘American empire.’ The vote must be seen as part and parcel of the new instinct for direct protest against globalization and supranational power….Yet the euro cannot be allowed to fail. [This] would mean the re-emergence of the [German] mark as the continent’s dominant currency and the rule by the German Bundesbank….Economic sovereignty would pass completely to the capital markets, and individual nation states would become yet more powerless.…A darker, less generous, and less liberal Europe would emerge….Building Europe was always going to be hard, but pro-Europeans are going to have to be much subtler and acute in their understanding of their fellow Europeans’ prejudices if they are to succeed.”

Thus, in time, European observers trust that Europe’s fourth-smallest state will become less reluctant, as has happened many times before. “Danes are not europhobes,” stressed the conservative Times of London (Sept. 29), “…They emerge as committed, cosmopolitan Europeans. But they are not federalists.”

Now, the European Union needs to come to terms with the prospect that there may be no single, one-size-fits-all E.U. membership.