The next big test for monetary union is the Danish referendum on September 28th. The campaign still has a long way to go but at the moment things are not looking particularly bright for Danish prime minister Mr Poul Nyrup Rasmussen.

The Danes, of course, have a record of upsetting the apple cart, particularly when it comes to European referendums. They delivered the first No vote on the Maastricht Treaty. Only after others voted Yes and the Danes negotiated four opt-outs did the voters finally say Yes.

When the election date was set in March this year, there was a small margin in the opinion polls in favour of a Yes vote. The government was hoping that setting the date would mobilise further support and the day would be easily won.

At the start this looked like a realistic proposition. But the No campaigners quickly found their feet and in recent polls have been catching up with the Yes campaigners and in some cases passing them out.

One of the other main reasons for this resurgence in the No vote is the situation in Austria. The Danish public is very opposed to what it sees as abuse of a small country by the "big country oppressors" like France. The Danish government will be disappointed that the quiet behind-the-scenes attempts of the Portuguese presidency to diffuse the crisis did not see sanctions lifted. France takes over the presidency on July 1st. It will find it more difficult to diffuse the crisis for a number of reasons.

Much of the Austrian far right politician Mr Joerg Haider's abuse has been directly aimed at French President, Mr Jacques Chirac. On top of that, the French are worried that any concessions would encourage their own far right. As a result it looks as if this is being left to the Swedish presidency, which begins next January. That of course would be too late for the Danes, although there is a possibility that the findings of the three wise men looking into it could do much to diffuse tensions.

Whether there is a Yes or a No vote has obvious implications for the rest of the euro zone as well as those looking to gain entry. The result simply cannot be called now. The most recent Gallup poll found that 24 per cent of people said they could easily imagine changing their minds before September.

A No vote would likely put off possible referendums in Sweden and Britain where it would raise the morale of the europhobes. It could also lead to the emergence of a two-speed Europe, particularly given recent comments by Mr Chirac, who has been talking about the "hard core".

This would not be good news for this State - Britain is still our most important trading partner, even if that status is diminishing rapidly, and the possibility of leaving it even further behind in the monetary union stakes would not make for economic stability.

The countries outside the euro zone are still involved to some extent in decision making, through such means as the EuroX Council. But if the boundaries appeared fixed for several years that could change.

But even if there is a No vote, much will depend on the extent of it. A close vote like that which defeated Maastricht first time - 51 per cent against 49 per cent - would probably mean business as usual for the Danes with another vote in a year or two's time. A far wider margin of defeat would have larger consequences.

A Yes vote on the other hand, while not likely actually to hasten referendums in those two countries, would certainly not undermine it. It would also, as Ms Alison Cottrell, chief international economist at Paine-Webber, points out, lead to very interesting policy questions in Greenland and even Norway.

Greenland has won limited self-determination under Denmark but still uses the krona. Greenland's prime minister Mr Jonathan Motzfeld indicated that if Denmark adopted the euro, Greenland would have little choice but to follow suit and the opposition liberal party supports this.

Things are less clear for Norway, which has twice rejected even EU membership, although pro-European opinion appears to be growing. The prime minister there Mr Jens Stoltenberg has even suggested that, if Denmark and Sweden adopted the euro, Norway could use it as a parallel means of payment.

One major advantage for the Danish government this time around is that it has broad-based support among the trade unions, employers' bodies and of course the central bank. The Danish krona's central rate was last altered in 1982 and it has been operating within 2.25 per cent bands of its central euro rate since the currency's arrival last year. As Ms Cottrell points out, if the Danes have a problem with the euro, it is not based on any affection for floating exchange rates.

The government can also use this quite effectively. It points out that maintaining economic equilibrium would be much more difficult and more expensive following a No vote.

But with this range of forces advocating a Yes vote, that must seem the most likely option, particularly if the Austrian situation gets sorted out.