The Danish people go the polls again today in another referendum on their relationship with the European Union. This is the fifth time since accession in 1973 that the citizens of this Scandinavian state have voted on one or other aspect of the European project. Ironically the result of today's vote on possible participation in the single European currency may have more impact outside than inside the boundaries of Denmark. The Danish economy is doing well and a decision one way or the other is likely to have little short-term impact, whatever its long-term consequences. However, a victory for the No camp would have a knock-on effect in neighbouring Sweden, which is also weighing the benefits of adopting the euro as its currency. The prospect of a Swedish referendum on membership could recede significantly. Likewise in Britain, the general expectation has been that in the event that Mr Blair wins a respectable majority after the next election he will quickly ask the people to make a choice: sterling or the euro? A No vote in Denmark could influence him to stay his hand.
A win for the Yes side would be a reason for some quiet celebration in Brussels. It would be a significant boost to the project for a single European currency and a further step along the road to eventual political union. It would act as an incentive to the Swedes to follow suit and would raise the morale of the pro-European lobby in Britain. A vote against joining the euro would have some negative impact on the currency on the financial markets, although the immediate effect might not be too significant, as the possibility that this could happen has been considered by investors for some time. A vote in favour could, of course, give some boost to the euro, to add to its recent modest gains. The longer-term impact of a Danish rejection on the development of the currency is harder to gauge; if it affected the situation in Sweden and Britain, then this would obviously be significant.
The opinion polls, which had shown a clear majority against euro membership, have become contradictory and confusing in the last week. The high proportion of undecided voters reflects the difficulty of the choice Denmark is facing: whether to go wholeheartedly for the euro, with all its potential advantages and risks, or to opt for the status quo where the Danish krone is linked to the euro but Denmark has no direct say at the administrative and decision-making level. Whatever the result, the referendum campaign itself has by all accounts been a remarkably civilised though intellectually vigorous affair. In the conduct of debate, as in other political matters, Scandinavia can often provide an excellent model.