Lisbon Treaty and Danish opt-outs

Denmark
Danish Institute for International Studies
 
In general, the solution to the ratification crisis was met with great satisfaction in Denmark and was conceived as a sign that the EU, despite crisis, is still able to find a common way forward. The renewed will to reach consensus and produce results was interpreted as a result of the effective leadership of the French Presidency, and as a result of the current financial crisis and the economic recession which have created a need for the member states to move closer together.[1]
 
Prior to the European Council meeting, the Danish Prime Minister, Anders Fogh Rasmussen, voiced satisfaction with Ireland holding a second referendum with concessions from the EU on the right to keep one Commissioner per country. The concession was easy to grant for the Danish government as the Danish debate on the Lisbon Treaty had also showed concerns about reducing the size of the Commission.[2]
 
The Danish government is concerned about a possible ‘No’ in the second Irish referenda. This will not only drag the Union into another crisis but would also have serious consequences for the possibility of abolishing the four Danish opt-outs. The Danish government has promised to hold a referendum on the opt-outs before the next national elections in 2011. Rasmussen has on a number of occasions declared that it is meaningless to hold a referendum on the Danish opt-outs before the ratification crisis is solved and the Lisbon Treaty has come into force.[3]
 
A second Irish ‘No’, together with an anti-European UK government is likely to lead to a multi-speed Europe. This might include the use of ‘enhanced cooperation’ involving closer cooperation amongst smaller groups of member states (such as EMU and the Social Chapter inside the EU; and the Schengen and Prüm Treaties outside the EU). The three most likely arenas for such closer cooperation are defence and security policy, the Eurogroup, and police and judicial cooperation, all areas from which Denmark has opted out.[4]
 
A possible Euro-referendum
 
Meanwhile, the financial crisis has changed the opt-out agenda of the government as the factual consequences of being outside the Eurozone have been revealed. A political debate on joining the common currency has been revived after the Danish National Bank was forced to increase interest rates twice to defend the Krone’s peg to the Euro. This caused a record interest rate spread between the Danish National Bank and the European Central Bank of 175 basis points compared to 25 basis points in May. This scenario is threatening to push property prices further down, hurt industry and further depress the economy. In an interview with “The Financial Times”, Nils Bernstein, Director of the Danish National Bank, declared that Denmark is paying the price of not adopting the Euro even though last month’s rise in interest rates has been successful in stopping pressure on the Krone. He noted: “The pressure on the currency seems to be over but you can´t be sure.” [5]
 
According to estimates from the Danish Industry Confederation (DI), Danes risk paying 4.5 billion Danish Krones for being outside the common currency due to the high interest rate spread. This is especially critical for flexible mortgage holders.[6] The Danish Metalworkers’ Union (Dansk Metal) argues that the interest spread has caused a significant decrease in salary advances among metalworkers and is therefore recommending a referendum on the Euro as soon as possible.[7]
 
The Danish Prime Minister, Anders Fogh Rasmussen, has initiated talks with opposition parties on the possibility of holding a referendum. On 22 January 2009, a hearing on the Euro was held in the Danish Parliament. The main obstacle for the Danish government is to get the leftwing Socialist People’s Party (SF) on board which ranks a strong third in opinion polls. The SF is still split on the issue. Rasmussen had indicated the beginning of 2010 as a good time for holding a referendum, after the Irish vote and before the next Danish Parliament elections in 2011. The SF has put forward three demands on changing the Euro construction before recommending a ‘Yes’. One is a demand for a stronger emphasis on high employment instead of low inflation.[8]

A new survey carried out by “Capacent Opinion” shows that 50 percent of Danes support the Euro while 39 percent are against it. Only 26 percent of the respondents said they want a referendum as soon as possible.[9]
 
The upcoming European Parliament elections
 
It is likely that one or more Danish parties will lose their seats in the European Parliament when the Danish number of parliamentarians will go down from 14 to 13.[10]
 
Denmark also expects to see a generational shift in the Danish Members of the European Parliament (MEPs) since a number of current MEPs are not running for re-election (Poul Nyrup Rasmussen, Karin Riis Jørgensen, Mogens Camre and Jens-Peter Bonde). The average age of the youngest candidates of the four largest parties is only 23 years.[11] The generational shift might put an end to the notion of the European Parliament as the last stop before ending the political career.[12]
 
The European election campaign has not yet begun and there has hardly been any debate in the media. The Danish Prime Minister, Ander Fogh Rasmussen, from the Danish Liberal Party has declared the possibility of a pact between the Liberals and the “European People’s Party – European Democrats” (EPP-ED) after the 2009 elections which would give the “Party of European Socialists” (PES) a minor say: “I favoured strongly the past alliance between the EPP and the Liberals in the Parliament […] in my opinion, this is the natural cooperation in the parliament. I will work in that direction.” [13]
 
The formation of the new Commission and the appointment of the High Representative
 
Neither topic has been subject to intense debates in Denmark. The Danish government has declared its support for the re-election of José Manuel Barroso as President of the Commission.[14] The Danish media still portrays the Danish Prime Minister, Anders Fogh Rasmussen, as a possible candidate for the position as President of the European Council if the Lisbon Treaty comes into force. Speculations about Rasmussen as a possible candidate for the position as the new Secretary General of NATO have also been highlighted.[15] Rasmussen has not formally announced his candidature to any of the mentioned international posts.




[1] Berlingske Tidende: Krisen bringer det bedste frem i EU, available at: http://www.berlingske.dk/article/20081212/kommentarer/712120119 (last access: 23 January 2009).


[2] Berlingske Tidende: Ny irsk afstemning skal løse EU-krise.


[3] Jyllands Posten: Irland på vej mod ny afstemning.


[4] Mette Buskjær Christensen and Ian Manners, DIIS Brief: The Irish opt-outs from the Lisbon Treaty?: lessons of the Danish experience, available at: http://www.diis.dk/sw69770.asp (last access: 23 January 2009).


[5] Financial Times: Denmark is bearing the cost of being outside euro, available at: http://www.ft.com/cms/s/0/e8f45eb0-b05b-11dd-a795-0000779fd18c,_i_email=... (last access: 26 January 2009).


[6] DI Business: Euro-forbehold giver milliardregning, 3 November 2008.


[7] 3f.dk: Euro-forbeholdet koster metalarbejderne dyrt, available at: http://forsiden.3f.dk/article/20090122/NEWSPAQ/901220382 (last access: 26 January 2009).


[8] Kristeligt Dagblad: Søvndal og Fogh i kamp om euro –grundlov, available at: http://www.berlingske.dk/article/20090121/politik/901210422/ (last access: 26 January 2009).


[9] Ritzaus Bureau: Danskerne: Vent med euroafstemning, 21 January 2009.


[10] Jyllands-Posten: Europæiske vælgere sætter dagsordenen, 31 December 2008.


[11] Ritzaus Bureau: Unge stiller op til Europaparlamentet, 31 December 2008.


[12] Politiken: Unge danskere er vilde med EU, 21 January 2009.


[13] Euractiv.com: Interview: Danish PM warns against ’abuse’ of crisis, available at: http://www.euractiv.com/en/eu-elections/danish-pm-warns-abuse-crisis/art... (last access: 26 January 2009).


[14] Ritzaus Bureau: Fogh støtter genvalg til Barroso, 15 October 2008.


[15] Politiken: Statsminister med træls udlængsel, 17 December 2008.