Unions and employers' organisations both recommend a Danish yes to EMU

In March 2000, the Danish government fixed the date of the referendum concerning Denmark's participation in the third phase of EU Economic and Monetary Union (EMU). The referendum will be held on 28 September 2000, which is earlier than expected. Most social partner organisations - with the DA employers' confederation and LO trade union confederation in the forefront - are, like the government, recommending a "yes" vote. However, since the referendum date was fixed, opinion polls indicate that previously high levels of support for EMU are waning and a close contest is in prospect.

Denmark is not participating in the third stage of EU Economic and Monetary Union (EMU) and the single European currency. A referendum on Danish entry was until recently expected to take place towards the end of the term of office of the current government, in the autumn of 2001 or the winter of 2001-2. The plan was that the senior party in the governing coalition, the Social Democratic Party (Socialdemokratiet) was to take an official position on the EMU issue at a congress in the autumn of 2000 and, after an expected "yes, "the government would then decide the date of the referendum. The Social Democrats had started a campaign to prepare the population for a "yes" vote, in the hope that this long period would increase support for the the project. However, interest in the issue turned out to be very modest as long as it had not been decided when the referendum would take place. The only question which the media were interested in was the date of the referendum.

After persistent rumours of an earlier referendum, in March 2000 the government decided to draw the necessary conclusions from this situation and advanced the date of the referendum, which will now take place on Thursday 28 September 2000. Within the government, the junior coalition partner, the Social Liberal Party (Det Radikale Venstre). has long been pressing for an early referendum. One of the reasons is that the Social Liberals - with their leader and Minister of Economic Affairs, Marianne Jelved, in the forefront - are frustrated by a situation whereby Denmark will to an increasing degree be deprived of any influence in connection with economic decisions within the European Union. A second reason is that a referendum at a later stage would be closer to the more turbulent political climate likely to prevail in the run-up to the next general election.

The Social Democratic Party hesitated for a long time because there has always been a considerable degree of "euro-scepticism" in Denmark, both generally and in particular in relation to a development of EU cooperation in a more "federalist" direction. On 2 June 1992, the Danish population voted "no" to the Maastricht Treaty on European Union in a referendum, creating problems for both Denmark and the wider EU which could be resolved only by the negotiation of a number of Danish "opt-outs" from the Treaty's provisions, including non-participation in the third stage of EMU. A second referendum in May 1993 then resulted in a very narrow majority in favour of the modified version of the Treaty. Denmark thus did not participate when 11 EU Member States entered the third stage of EMU in January 1999, although the Danish economy was in good enough shape to do so. Despite a slight majority in favour of the new Amsterdam Treaty in a referendum in May 1998, Danish euro-scepticism remained so strong that the government dragged its feet in relation to participation in the third stage of EMU. In connection with both the debate during the Amsterdam Treaty referendum and the March 1998 general election, the Prime Minister,Poul Nyrup Rasmussen, repeatedly stressed that the Danish opt-outs would not be reversed in the immediate future. It was indicated that a referendum on one or more of the opt-outs would, at the earliest, be considered towards the end of the new government's term of office, or maybe even not until after the end of this term - ie in 2001-2 or even later.

Social partner support

The relatively successful start of the third stage of EMU and the single currency changed these plans and as various opinion polls started to show growing support for the project, the government started to revise its plans (DK9906127F). There has been a major shift within the Social Democratic Party in the direction of growing support for the EU project. At the same time, most social partner organisations - on both the employers' and the employees' sides - wished to have an earlier referendum on EMU, because joining the single currency is considered most economically safe course for Denmark. This is why the social partners - with the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) and the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO) (DK9909144F) in the forefront - have strongly supported the government's decision to hold a referendum on 28 September 2000 and have recommended their members to vote in favour of EMU entry. It is worth noting in this connection that the traditionally most left-wing of the big trade unions, the General Workers' Union (Specialarbejderforbundet i Danmark, SiD) has also recommended a "yes" vote, following a decision of its executive committee with about two-thirds of the votes in favour.

However, SiD decided at the same time that it would not launch a major campaign in favour of a "yes" vote. Furthermore, approval of EMU entry was subject to a number of conditions: the Danish collective bargaining model and welfare model must be guaranteed; employment policy should be given a higher priority to give it equal importance to anti-inflationary policy in the overall EMU policy; and the development of EMU must not exclude the candidate countries in Central and Eastern Europe.

Connection with the Intergovernmental Conference

SiD's conditions are to a high degree connected to the debate which is taking place about initiatives in connection with the Intergovernmental Conference preparing a reform of the EU Treaty, which should be agreed at the Nice European Council in December 2000 (EU0002229F). In Denmark, there has been much scepticism over the proposals of the European Commission (EU0001225F) and the current Portuguese Council Presidency concerning increased use of qualified majority voting in the social and labour market policy fields. So far, there has been major Danish opposition to this development, because it is feared that this would undermine the Danish traditions of regulating labour market conditions by means of collective agreements (DK0001164F) and of general, tax-financed welfare schemes.

However, it seems that a policy shift on this issue is on its way in the leadership of LO, as it may turn out to be impossible to ensure the admission of new Member States unless the possibilities for countries to exercise a veto in these policy fields are restricted. LO seems to be moving towards endorsing majority voting, if a guarantee can at the same time be given for the Danish model of implementation by means of collective agreements. However, SiD - the second-largest member organisation of LO - still holds the traditional attitude against the extension of majority voting.

This discussion has in itself been an argument for an earlier EMU referendum. If the referendum were to take place at the end of 2000 or in 2001, the public debate would, to an even higher degree than is already the case, focus on the developments in the Intergovernmental Conference, and this would imply a risk of raising a number of very sensitive issues, from a Danish point of view. By holding the EMU referendum in September, it is hoped that the debate will be more "clean", with the main focus on EMU itself.

Joint campaign

The support for EMU entry among the social partner organisations is particularly strong in the industry sector, where the two biggest sectoral organisations affiliated to LO and DA - the Central Organisation of Industrial Employees in Denmark (Centralorganisationen af Industriansatte, CO-industri) and the Confederation of Danish Industries (Dansk Industri, DI) - have decided to launch a joint campaign for a "yes" vote in the referendum. The explanation is, of course, that it is the members of these organisations which are most exposed to international competition. The campaign is expected to include support for enterprises and employee representatives who want to organise meetings and other activities relating to EMU. In the run-up to the 1998 referendum on the Amsterdam Treaty, the two organisations spent about DKK 5 million on a similar campaign, which involved 700-800 enterprises (DK9709128F).

Commentary

The Danish government and the main liberal opposition parties, which are also in favour of EMU, seem to be suffering from a "2 June syndrome", ie fear of a repeat of the Danish "no" to the Maastricht Treaty in 1992. This may lead to a polarisation of the positions in the public debate; it can be expected that advocates will paint a picture of serious economic uncertainty if Denmark remains outside EMU, while the opponents will play the national card.

On the basis of an evaluation of all Danish referenda since Denmark joined the European Communities - as EU was then known - in 1972, it seems that the chances of a "yes" will be highest if the discussions can be confined to the purely economic aspects, while a "no" becomes more likely if the political elements are also involved. This could tempt those in favour of EMU to understate - once again - the political nature of EU cooperation. Maybe this will again make it possible to win the referendum this time; but the question is whether this would not increase the problems in the longer-term perspective. As demonstrated by the discussion about the Intergovernmental Conference, there are many factors which speak in favour of a further strengthening of the political influence of the European Union, for instance in the form of qualified majority voting in new areas within the labour market and social policy fields. The social partners in Denmark are proving hesitant when confronted with this development. This has contributed to placing the advocates of EMU in a defensive position in the political debate up to the referendum, and this may also be one of the reasons why the opponents have been gaining ground in the opinion polls - the substantial support for EMU entry indicated in polls conducted before the referendum vote was fixed has now eroded. It seems that the decision will be a very narrow one. (Jørgen Steen Madsen, FAOS)