Posted at 6:15 a.m. PDT Friday, September 29, 2000

European papers say Danish euro vote bad for EU

LONDON, Sept 29 (Reuters) - Newspapers in Europe said on Friday Danish rejection of the single European currency would weaken the beleaguered euro further and throw a wrench into plans for deeper EU integration. Danes voted in a referendum on Thursday to reject membership in Europe's monetary union, declining to ditch the Danish crown for the euro and join the 11 other EU members who have swapped their national currencies and central banks for a single unit under the auspices of the European Central Bank.

Across Europe, newspapers said the result lent more credibility to those sceptical about plans for deeper EU integration and sowed the seeds of doubt over the results of similar referendums which could be held in Britain and Sweden.

The Financial Times said the Danish referendum was a heavy blow to the already troubled euro and had dismayed European political and business leaders with a resounding preliminary 53.1 percent ``no'' vote against 46.9 percent in favour.

In an editorial comment, the FT said the Danish government had mistakenly treated the issue as a purely technical economic one. But the Danish rejection reflected ``a continuing unease about the political shape and development of Europe.''

The Wall Street Journal Europe declared the result a ``Blow to Single Currency'' and quoted Denmark's anti-euro camp as saying the vote was a wake-up call to the European Union as a rebuttal to EU ideas of closer economic and political integration.

WEAK EURO UNDER MORE PRESSURE

The International Herald Tribune said market reaction would pile more pressure on the euro, which has fallen more than 25 percent in value against the dollar over the 21 months since its birth. Earlier this month it needed coordinated intervention from the world's major central banks to prop it up.

The IHT also reminded its readers that Danes had foreshadowed this result when they rejected the Maastricht Treaty that set the timetable for the single currency in 1992.

British papers called the result a blow to any plans Labour Prime Minister Tony Blair might have for holding a similar referendum on euro membership after next year's expected election. British Eurosceptics rallied to the rejection banner, while Europhiles played down the effects.

Top-selling tabloid Sun ran a picture of cartoon Viking Hagar the Horrible under the headline ``There ain't nothing like a Dane,'' arguing the result may have ``wrecked British Prime Minister Tony Blair's dream of dragging Britain into the euro.''

Meanwhile the conservative Daily Telegraph said in an editorial: ``The people have spoken against a project pushed by the European elites with scant regard for public opinion.''

TWO SPEED EU INTEGRATION

Sweden's liberal heavyweight Dagens Nyheter daily proclaimed on its front page: ``Clear Danish No to EMU. Denmark places itself outside EU centre.'' The right leaning newspaper Svenska Dagbladet declared: ``Danish `No' shakes up EU'' and inside the paper said: ``Danes are still hesitant about fast integration.''

Newspapers in euro-members Germany and France said rejection would complicate any plans for further economic and political integration in Europe.

German business daily Handelsblatt said: ``The EU is fast becoming a three-class society: the euro members, the non-euro members and the candidates, who with the Danish `no' have been given food for thought.''

French newspapers said the decision will push the EU into officially adopting a two-speed Europe policy, with some members of the 15-nation bloc hurtling faster towards deeper political and economic integration than others.

``This `no' officialises the existence of a two-speed European monetary union, in which key issues such as fiscal harmonisation have less and less chance of being resolved,'' financial daily Les Echos said.

http://www.mercurycenter.com/breaking/docs/074974.htm

-- Carl Jenkins (Somewherepress@aol.com), September 29, 2000

Answers

The burning question is, of course, how badly will the value of the euro be effected now, before the U.S. election? It could be a factor if reaction is swift.

-- Uncle Fred (dogboy45@bigfoot.com), September 29, 2000.