DENMARK BELIEVES it will not have to call a referendum to join Europe’s new fiscal treaty, the negotiation of which looms large over its six-month rotating presidency of the EU.
The country is the third non-euro member state in succession to hold the presidency, which oversees the work of Europe’s ministerial councils.
While Denmark’s non-participation in the euro severely curtails its influence in the battle against the sovereign debt crisis, it has pledged to join the fiscal pact.
Danish law calls for a public vote on any transfer of powers or sovereignty to Europe, but prime minister Helle Thorning-Schmidt does not expect to call a referendum on the pact. The stance of her social democrat-led government, which celebrated 100 days in office this week, is rooted in the acknowledgement of Denmark’s opt-out from the single currency in draft texts of the new treaty.
However, opposition figures say the public is in a mood to reject any referendum on the new intergovernmental pact. Danes rejected the Maastricht treaty 20 years ago, leading the country to stay out of the single currency as well as EU defence, justice and home affairs policy.
The new government has promised referendums to abolish the defence opt-out and to establish an opt-in for justice and home affairs policy. There is no appetite for a plebiscite on the fiscal treaty, although the final decision depends on a legal opinion on the final text. “We’re not moving towards a referendum, for sure,” foreign minister Villy Soevndal told reporters this week.
Britain’s refusal to back an EU treaty to toughen Europe’s fiscal rules has spurred anxiety about a drift towards a two-tier Europe, as countries within the fold move quickly to integrate their economies. Denmark wants no divergence between euro and non-euro countries, although ministers acknowledge there are forces out to divide Europe.
“We do not want a club of 17 or a club of 10, we want an EU of 27,” said Nicolai Wammen, minister for European affairs. This is an ultra-sensitive topic in Denmark as its currency, the krone, is pegged to the euro and 65 per cent of its exports go to other EU countries.
It is greatly in Denmark’s interest, therefore, that Europe overcomes the debt debacle, now into its third year. While Danish borrowing costs are lower even than Germany’s at the moment, the financial crisis has felled 13 local banks and led to the loss of some 175,000 private sector jobs.
Ms Thorning-Schmidt, who clashed with French president Nicolas Sarkozy at the last EU summit, said her government was seeking “as much as possible” to join the fiscal pact.
“We are actively participating in the negotiations and we think that the inclusive process which has been chosen is a very good one, not only for the euro countries, not only for the non-euro countries, but for the whole idea of keeping Europe together in a very difficult time,” she told reporters yesterday.
However, a new draft of the treaty text has prompted concern that the EU institutions are being sidelined in favour of ad hoc intergovernmental arrangements.
In Copenhagen at a press conference to mark the formal opening of the Danish presidency, EU Commission chief José Manuel Barroso said his support for the initiative was conditional.
“The commission can only support such an agreement if this agreement – while reinforcing euro area economic governance, which is of course essential if we want to sustain a common currency – does not weaken the EU as a whole, does not break the EU as a whole, does not mean a threat to European unity,” he said.
“We can support it, provided this international agreement is fully compatible with the European treaties, with the community method, with the European institution.”
At the same event, Ms Thorning-Schmidt made clear her concern.
“The economic and financial crisis that we face is going to be the most important issue that the EU and of course the Danish presidency will have to face,” she said.
“We will do what we can to bring Europe further to get out of the crisis."