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EU: Danish Referendum May Influence Changes

The political consequences of Denmark's refusal to join the European Union's common currency, the euro, are still reverberating throughout the Union. The vote last week came at a difficult moment, with Brussels under increasing pressure to reform internally and to move ahead with eastward enlargement. RFE/RL correspondent Breffni O'Rourke spoke with analysts who see the different issues as interlinked.

Prague, 4 October 2000 (RFE/RL) -- 'No' is a short, sharp, and clear word. However, the consequences of using this small word can be far-reaching and unpredictable.

The Danish rejection last week (Sept 28) of joining the European Union's common currency has created a new situation inside the Union, the results of which as yet cannot be fully foreseen.

In a sense, the 'no' vote in Denmark's referendum cleared the air. It means the common euro-zone has reached its maximum size, probably for some years. Outsiders Britain and Sweden, their governments discouraged by the Danish result, are unlikely to make any early moves to join a currency project that is so unpopular among their own electorates. The euro-zone will have 12 members when Greece, already approved, joins in January. The Danish result, by clarifying who is 'in' and who 'out,' brings into sharper focus the impulse for greater integration among a core group of inner EU members, notably France and Germany.

French and German officials have made that clear. In Dresden yesterday (Oct. 3), French President Jacques Chirac said a drive for faster integration spearheaded by France and Germany had found receptive ears in Italy, Spain, and Belgium. Earlier, French Finance Minister Laurent Fabius had said that the euro-zone countries are "learning to work and build together." Remarks similar in tone came from German Foreign Minister Joschka Fischer.

Significantly, despite Danish objections, the subject of "enhanced cooperation" was recently placed on the agenda of the crucial December EU summit in Nice. That meeting, which marks the end of the French EU presidency, is meant to decide key EU institutional reforms that will enable the Union to function effectively with the addition of new members from central and eastern Europe.

The idea of enhanced cooperation would allow those members wishing to do so to move ahead with deeper economic and political integration. In other words, what could be about to emerge from this such flexibility is the much-discussed "two-speed Europe." This would include a front-running core group consisting of a number of the euro-zone members, and a second group of presumably less influential countries, including the non-euro states -- and eventually the eastern newcomers.

Steven Everts, a research fellow at the London-based think-tank, the Center for European Reform, says this is why the 10 Eastern candidates are keeping such a close watch on events in the run up to Nice. He says:

"They are very concerned obviously, first, [that] there is a general sense of slippage when it comes to the enlargement process. [The EU has] talked for ages, but when it comes down to a process of substantive negotiations there is a great deal of reticence among member states. Secondly, they [the eastern candidates] are particularly concerned about the implications for them of flexibility, they too fear the specter of A-class and B-class members of the Union."

But Everts finds fears of a two-speed Union overdrawn, saying that a much more likely result of enhanced cooperation would be that some countries would increase cooperation with some other countries in matters of mutual interest, regardless of whether they are in the single currency or not, or whether from east or west. In other words, a series of diverse sub-groups would emerge in a pattern of what he calls "variable geometry," rather than two clear groups of leaders and stragglers.

Another analyst, Daniel Gross of the Brussels-based Center for European Policy Studies, says he finds that despite talk from Paris and Berlin about increasing integration, the real interests of those two countries lies elsewhere.

Gross says that beyond what he calls France and Germany's "shadow boxing," their pressing concern is to preserve the influence of the larger EU members as eastward enlargement brings more small countries into the Union. He says:

"I'm not saying that this is not a legitimate [concern]. But that is why they are so concerned about enlargement, not because they really fear the EU institutions will not work. Because I do not think it matters whether there are 15 or 20 or 25 members around the table -- [it's that] France and Germany fear that their relative power and influence will be eroded." Gross's supposition is given some support by recent published reports (in the Brussels weekly "European Voice") quoting diplomats as saying that the smaller EU states have strongly criticized France for using its current EU presidency to further the cause of the larger states.

The smaller countries, at the confidential pre-Nice negotiations on institutional reform, are said to be accusing France of not taking their interests into account, and thus of risking the chances of an agreement due by December. The French are said to want to create reformed institutions which will allow the big countries to retain their leading role in the Union.