The Danish referendum decision to reject the euro is profoundly important for the sake of the common currency in the short-to-medium political term. It will affect European and international confidence in the euro, as it struggles to recover from a poor showing on international markets. It sets back enlargement of the monetary system to include Britain and Sweden and will probably slow down the momentum towards enlarging the European Union towards central and eastern Europe and preparing its structures for that task. In Denmark, the European question has divided voters for over a generation. Whereas the mainstream political parties are broadly in favour of further integration, including joining the euro, ordinary voters are much less convinced. By this vote they have dramatically registered their protest. They raise the question of democratic access and accountability in relation to pooling sovereignty beyond the nation state much more than do the political elites. The idea that the process of European integration is strictly constrained by treaty agreements is greeted sceptically by those who rely on high welfare provisions - notably women and older people. They doubt whether existing treaty clauses denying the EU competence to decide on such issues can survive dynamic pressures to harmonise tax and competition policies in defence of the currency and of the single market it is intended to service.
These are fundamentally important issues of real relevance for other European voters and leaders. The Danish referendum has performed a signal service in raising them for citizens of other EU-member states just at the time when the euro's functioning and legitimacy has come into question as a result of its poor international value and lack of institutional substance. This is not to concede the case made by the Danish euro sceptics. They have once again run an excellent campaign, demonstrating the relevance of their concerns. But it was objectionable in many respects, including the virulent xenophobic element based on far-right parties and a dated and unrealistic defence of national sovereignty put forward by former Stalinists - a strange combination of allies indeed. The mainstream Danish parties mounted a dismally ineffective campaign against such positions, only retrieving the argument in its closing stages. Thus the issue of whether Denmark can survive independently of the euro it is tied to, was not effectively confronted. In such circumstances, to vote against joining is to concede the loss of influence on external control. To participate is to assert accountability - and to aspire to render the overall system more democratic. That requires debate - in Denmark and throughout Europe - among all concerned about the best means of doing so. It does not follow that the choice is between a federal super state stripped of welfare functions and co-operation between national democracies with minimal European integration. It is much more complex and not as polarised as that. But it will now be up to political leaders and citizens throughout Europe to debate these issues and discover political innovations to resolve them in the years to come. -