DANISH PRIME minister Helle Thorning-Schmidt will need all her political wits and every power suit in her wardrobe to steer the crisis-wracked EU through the next six make-or-break months.
As Denmark takes over the rotating EU presidency from Poland, the 45-year-old Social Democratic leader has promised initiatives on “green growth” and cross-border crime-fighting.
But Denmark’s first woman prime minister knows that there is only one real priority in the coming months: to finalise the legal details of an inter-governmental deal to stabilise the euro, as agreed in principle last month.
Ms Thorning-Schmidt is a dyed-in-the-wool European politician: after studying political science in Copenhagen she attended the European college in Bruges. From 1999 to 2004 she was an MEP in the European Parliament.
The EU has changed significantly since Denmark’s last presidency in 2002 marked the end of accession negotiations with 10 new members. The rotating presidency has lost influence since the arrival of European Council president Hermann Van Rompuy as full-time co-ordinator of EU intergovernmental negotiations.
Ms Thorning-Schmidt was left in no illusions about Denmark’s influence in the coming six months at last month’s all-night session.
Her intervention, ostensibly to prevent the isolation of Britain, was interrupted by French president Nicolas Sarkozy.
“You’re outside , you’re a small out and you’re new,” he reportedly snapped. “Nobody wants to listen to you.” That perceived lack of influence could hobble Denmark’s attempts to steer the day-to-day work of the presidency, in particular the ongoing, ill-tempered negotiations over the EU’s next six-year budget from 2014.
Besides Britain, Denmark is the only EU member that has neither adopted nor committed to adopt the single currency. Nevertheless, Copenhagen has vowed to participate in the intergovernmental agreement currently being negotiated by 17 euro-zone members and other non-euro states.
In this, Ms Thorning-Schmidt will have a delicate double role: help agree a deal that is robust enough to convince markets about the euro’s future, without giving voters at home the impression that they are being dragged into the single currency by stealth.
Danish voters have voted twice to keep their krone and a recent poll showed that 71 per cent opposed the euro.
Copenhagen leaders have argued that it is in Denmark’s political and economic interests to be part of any reform package for the euro, to which their own currency is pegged.
Any reform package worth the name, however, may require a referendum in Denmark. That carries with it another problem for Ms Thorning-Schmidt’s three-party, left-leaning minority government, in office since last October.
Her foreign minister Villy Søvndal, from the Left Party, has predicted the deal will be “very difficult” to implement if it obliges signatories to cut borrowing to 0.5 per cent of gross domestic product (GDP). That could undermine further the economic stimulus package he promised voters during last year’s election.
Further austerity measures could accelerate the deteriorating economic outlook in Denmark: the economy is likely to grow by just 1 per cent this year after shrinking at the end of 2011; the jobless rate is rising and banks are unwilling to lend despite record low interest rates.
Ms Thorning-Schmidt has made no secret of her support for the euro, and has proposed a third vote on Danish entry to the single currency union.
But given the public mood on the euro, the general economic outlook and a record poll low for her Social Democrats, the prime minister is not likely to push her luck in this electoral term.
Since taking office last October she has worked quickly to repair Denmark’s strained relationship with Brussels, reversing the limited border controls introduced by the previous government.
Despite the increased workload, and the presidency’s reduced influence, the next six months could be useful for the Danish leader.
Ms Thorning-Schmidt will hope that television images of her welcoming EU leaders to Denmark will bestow on her the lustre of power and distract attention from domestic difficulties.
The most persistent: queries about the tax affairs of her husband Stephen Kinnock, son of Britain’s former Labour leader and European Commissioner Neil Kinnock.