Danish euro vote is too close to call All Europe awaits Denmark's verdict on single currency
Reuters COPENHAGEN, Denmark, Sept. 28 — Danes voted on Thursday on whether to join Europe’s single currency, with last-minute opinion polls pointing to a tense photo-finish. Most recent polls have shown a slight lead for those who shun closer European ties and want to keep Denmark’s crown. STORY CONTINUES BELOW Advertisements The referendum is seen as a test of public confidence in the euro, which has lost nearly a third of its value against major currencies since its launch last year. BUT AS long queues built up at several polling stations in the capital and with the outcome too close to call, the balance could be tipped by as few as 20,000 undecided voters. The referendum, the sixth on European issues in this prosperous and strongly independent nation, is seen as a test of public confidence in the euro, which has lost nearly a third of its value against major currencies since its launch last year.
Economists polled by Reuters predicted an anti-euro ’no’ vote could knock two cents off the euro against the dollar, although fear of concerted intervention would probably stop markets sending it into freefall. A Danish ’yes’, however, would be a timely, though limited, shot in the arm, boosting the euro by 1.5 cents, they said.
The euro held steady on currency markets at around 88.40 cents on Thursday as dealers waited for early exit polls. Critics say exit polls while voting still continues may unduly influence voters, but Denmark’s interior minister said there was insufficient legislation to ban them. Voting closes at 1400 ET.
Global markets at a glance • Asian-Pacific Markets • European Markets • The Americas Markets • Wall Street Source: Wall Street Journal
Some analysts said central banks may step in even if Denmark voted ’yes’ to the euro, taking advantage of a short-term rise. “If there is a ’no’ vote, the downside is probably limited given the fears of intervention and there is some speculation that, even if there is a ’yes’ ... they might come in and push it even higher,” said Jesper Dannesboe, chief foreign exchange strategist at Dresdner Kleinwort Benson in London.
The Danish crown firmed a touch against the euro to 7.4611 on Thursday from Wednesday’s 7.4652 close, while bond yields narrowed slightly, reducing their spread to European debt.
Economists and dealers put the moves down to growing awareness that the impact of a ’no’ was likely to be limited. “People aren’t worried that much that a ’no’ will cause that much currency turmoil,” said Keld Holm, head of research at BG Bank in Copenhagen.
NECK-AND-NECK RACE Final opinion polls suggested Denmark’s four million voters are evenly split. Of the three polls published before voting began, one pointed to a ’no’ vote, one to a ’yes’ and a third put the two sides neck-and-neck.
The last poll, published by the Green’s research institute, put the anti-euro vote at 49 percent and support at 47 percent, narrowing the gap from earlier surveys.
The vote is also expected to have broader implications for the pace of economic and political integration within the 15-nation European Union. Danish rejection would do little to help pro-euro camps in Britain and Sweden, both due to ask voters to decide on euro membership within the next few years.
British Prime Minister Tony Blair, however, dismissed any threat that a Danish ’no’ would hijack Britain’s euro debate. Asked if a ’no’ in Denmark would mean a delay in a UK referendum, Blair said: “No, it doesn’t. Denmark has got its own decision we have got our own decision.”
Blair, struggling in recent opinion polls and facing a possible general election next year that could be dominated by the thorny European issue, maintained that he favored euro entry as long as key economic conditions suited.
“Even if it is difficult in terms of short-term popularity, it is important to stress to people Europe is important for Britain,” he said.
RISK OF 'TWO-SPEED' EUROPE A Danish ’no’ could also damage European integration by spurring France, Germany and other EU “integrationists” to forge closer political ties, political analysts said.
In this two-speed Europe, the three euro zone ’outs’ would risk being left in the slow lane.
Denmark’s political and business leaders have urged voters to say ’yes’, arguing the small country, which accounts for just two percent of the EU economy, would be better off having its voice heard within the euro zone than shouting from the sidelines.
• MSNBC Cable coverage Watch MSNBC Cable for coverage of this and other stories
Opponents — from across the political and social spectrum — warn that a ’yes’ vote could spell the end of Danish sovereignty, lead to increased European bureaucracy and threaten Denmark’s cherished welfare system.
© 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.
|