UK watches Denmark

EU parliament - will Denmark opt for closer ties?

By BBC News Online's Ben Davies

The referendum in Denmark on whether to join the single currency, will set the tone of any future debate on the UK's own decision.

I believe the people of Denmark realise that we are not just talking about a change in currency - there are political implications of joining as well

Jeffrey Titford

For the moment there is a rare consensus in the UK among both pro and anti-euro camps, and that is that the Danish referendum on joining the single currency is far too close to call.

But one thing is certain - if the vote is "no" it will be a boost for the eurosceptics ahead of the Conservative Party conference in Bournemouth next week.

For the moment, however, neither euro enthusiasts nor eurosceptics are keen to be drawn on the Thursday's outcome in Denmark, lest the result has a negative impact on their campaigns.

Britain in Europe - an alliance of pro-European politicial interests - say that regardless of the Danish decision, British concerns with issues such as the manufacturing industry remain the same.

A spokesman said: "Either way it doesn't affect the problems that Great Britain is having as a consequence of being outside the euro - for example the strong pound."

At the other wing of the great euro controversy is the United Kingdom Independence Party (UKIP) which advocates total withdrawal from the European Union.

UKIP leader and MEP Jeffrey Titford said: "I believe the people of Denmark realise that we are not just talking about a change in currency - there are political implications of joining as well.

"If they say they don't want the euro then I am sure that the Swedish would follow suit."

He believes that if the Danish vote "no" the ripple will extend to the UK, but he says a yes vote "won't change the situation in this country".

Media support

There are parallels between the UK and Denmark which will be drawn no matter what the outcome.

As in the UK, Denmark's leading anti-euro campaigners are a strange coalition of left and right, and there is considerable public disquiet that future political decisions would be increasingly made in Brussels and not the respective member states.

In Denmark there is the additional dimension that euro membership could have an impact over the right to levy high taxation levels which fund the extremely generous Danish welfare system.

There are also differences: in the UK the bulk of the media is fiercely set against giving up the pound - a fact referred to earlier this week by Northern Ireland Secretary Peter Mandelson at a Labour fringe meeting.

"The British press is wrong to always see Europe as a thinly veiled plot," he said.

But in Denmark almost all the media is backing the "yes" campaign, as are most of the main political parties including their Conservative Party.

In fact all the mainstream parties in Denmark are pro-euro compared with the UK, where there seems to be little cohesion on the issue in any main party with the exception of the Liberal Democrats.

Diplomatic row

And interventions by British Tories in the "no" campaign have not been welcomed by Danish Conservatives.

Tory leader William Hagues was was left facing calls to distance himself from the actions of one of his MEPs who was fund raising for the Danish "no" campaign.

Daniel Hannan - the MEP responsible - told BBC News Online: "If the Danish were to vote yes it would be a moral boost to the UK yes campaign but it won't have an affect on public opinion."

And he said he helped the Danish campaign because "I am keen to defend a friendly country [against the euro] and an old ally or ours."

The Danish Conservative Party said it knew of the MEP's "irritating" involvement too late to influence the British Tory Party to stop him.

ERM 'disaster'

A further difference is the fact that Denmark's economy has successfully matched the eurozone's - being, as it is, within the European exchange rate mechanism (ERM) which forces the krone to stay within 2.25% of the value of the euro.

Britain exited the ERM in disastrous circumstances in September 1992 and that factor alone has perhaps hardened the British voter against joining the single currency, even compared with the wavering Danish vote.

Although Thursday's decision remains on a knife edge, polls seem to be indicating that the "yes" vote is likely to lose.

If the polls are proved wrong and Denmark does go in, then some experts are predicting that it is only a matter of time before Sweden also joins.

If that happens then the UK would be left more isolated outside the euro.

By the same token if Denmark votes against joining, the pressure on the UK to join might well ease, edging the EU towards the creation of a two-speed Europe.