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Friday, 29 September, 2000, 18:04 GMT 19:04 UK
What future for Denmark?

Note imperfect: Denmark is no fan of the euro
The Danes have given a resounding 'no' to the single currency, but where does this leave their economy? The BBC's Jonty Bloom investigates.

So, no thanks.

That was the verdict of the Danes on the single currency in a hard fought referendum which highlighted both the political and economic issues involved.

It seems that the political factors outweighed the economic ones in Denmark this time.

Denmark is after all so closely tied in with the rest of Continental Europe that joining would have made little immediate difference.

Losing influence

But politically the Danes are very eurosceptic and fears of being taken over by Brussels seem to have won the day.

Interestingly enough this means that the Danes will have less influence over their own interest rates than if they had voted yes.

The Danish Central Bank follows the decisions of the ECB like a shadow and if Denmark had joined the single currency it would have at least got a seat on the board of the European Central Bank.

Whether that and the transaction costs of changing from Danish Kroner to euro will have any long term detrimental effects for Denmark, as the yes campaigners claimed, is virtually impossible to say.

It will also be extremely difficult to say whether Denmark will prosper outside the eurozone, as the no campaigners claimed.

In fact given the vagaries of economics and statistics even when all the figures are in it may be impossible to say.

Not because we won't know whether Denmark is performing better than the eurozone but because proving cause and effect in economics is very difficult.

But given all the fuss about the Danish referendum (and I must admit I predicted in this column a few months ago that the Danes would vote yes) it has very little effect on the euro itself.

In part that is because foreign exchange dealers can read the opinion roles as well as the rest of us and therefore the result wasn't much of a surprise.

But it may also reflect how much it was politics rather than economics that dominated the referendum campaign.

And that I think is the key to whether this vote has any consequences for Britain.

It seems to me that the more eurosceptic a nation the more important the politics is going to be in any debate.

Even if you could have shown that Denmark would definitely benefit from joining the euro there would have still been a fight on to show that such benefits outweighed the perceived loss of political independence.

The more eurosceptic a country the greater the perceived loss of independence and therefore the greater the economic benefits have to be to counter balance it.

The yes camp failed to win that argument in Denmark but the Danes are only the second most eurosceptic country in Europe.

Compared to the Danes the British are way off the scale.

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