Danish voters say 'No' to single currency

Denmark delivered a dramatic rejection of Europe's single currency last night, in a move that struck a fresh psychological blow to confidence in the struggling euro.

Denmark delivered a dramatic rejection of Europe's single currency last night, in a move that struck a fresh psychological blow to confidence in the struggling euro.

Gallup projections, made from 95 per cent of the vote, gave opponents of the euro 53.1 per cent of the vote against 46.9 per cent for supporters - a bigger than expected lead.

"The figures look good," said Pia Kjaersgaard, leader of the right-wing anti-immigration and anti-euro Danish People's Party. "It is a good indication that we want to be part of Europe but not to move so fast."

The impact of the Danish decision is certain to be felt throughout the EU and, with confidence in the euro already jittery, the currency fell against the dollar in trading last night. The vote is also likely to re-energise Eurosceptics in Britain and could postpone any move by governments in Britain and Sweden to hold referendums on the euro.

However, Tony Blair insisted the "no" vote in Denmark would not affect his plans to call a referendum early in the next Parliament if the Government's five economic tests are met. He said: "There are millions of jobs at stake - 60 per cent of our trade is with Europe, it is a big part of our influence in the world, so we should stay engaged as a leading partner in Europe as we are today, rather than retreat into isolation."

Simon Buckby, director of the Britain in Europe group, said: "Denmark is a small country, very different to Britain, and its referendum is irrelevant to the debate here. The result will not reduce the pound level that is damaging British jobs, exports and inward investment."

In Denmark, as the results came in last night, Marianne Jelved, the Economics Minister, said that a "no" would be "a shame for Danish society and the development of Europe".

By 9.30pm the pro-euro opposition leader, Anders Fogh Rasmussen, conceded that even if the results were to improve "we are so far behind it would be hard to catch up". He said it would be "many years before we can take up this question again".

The verdict came at the end of a day of high drama during which the "no" camp was fractionally ahead in exit polls.

The first survey released at midday gave the anti-euro camp a clear 52.5 to 47.5 per cent lead. "I'm a bit worried about the outlook," said thePrime Minister, Poul Nyrup Rasmussen, as he cast his vote in the early afternoon.

Later polls showed the opponents of the currency ahead but with a shrinking lead. Jens Peter Bonde, of the anti-euro June Movement cautioned against early celebrations from "no" supporters, pointing out that the early exit polls may have been distorted by the high turnout of pensioners, who are traditionally sceptical.

Copenhagen remained expectant and extra police were drafted in case protesters took to the streets after the result, as on one previous occasion after a referendum.

The result could have serious implications both for confidence in the euro and for the future direction of the EU. By postponing any prospect of Britain and Sweden holding their own referendums on the single currency, the result may confirm the suspicion that three countries will stay outside the euro zone for many years. That may encourage the 12 others to forge ahead with economic co-operation and accelerate moves to a "two-speed" Europe.

Yesterday Germany's Finance Minister, Hans Eichel, said that it was in Danish interests to sign up to the euro and warning that the euro zone would move ahead even if Danes voted "no". "Europe will move forward," Mr Eichel said in Berlin.