Pro-euro surge puts Danish vote on a knife-edge

Campaigners for a "no" in Denmark's referendum on the euro yesterday accused the country's press of bias and the government of inspiring scare stories as their opinion-poll lead began to crumble.

Campaigners for a "no" in Denmark's referendum on the euro yesterday accused the country's press of bias and the government of inspiring scare stories as their opinion-poll lead began to crumble.

With two days of campaigning left, and signs of alarm among opponents of the currency, the stage is set for a dramatic and unpredictable outcome to Thursday's vote.

Although two polls published yesterday put the "no" side ahead by between four and eight points, the most recently conducted survey gives supporters of the euro a two-point lead, with 12 per cent of people still undecided.

Opponents of the euro also appear to be losing out in the area they once dominated: negative campaigning.

Denmark's government, most of the country's trade unions and its employers' organisation support the single currency but the campaign had languished until showing signs of recovery at the end of last week.

Yesterday Jens Peter Bonde, of the anti-euro June Movement, attacked the media, claiming that they did not give equivalent coverage to both arguments and ignored his side's press conferences.

Mr Bonde, singling out the Berlingske Tidende for criticism, added that "the television is much worse than the written press".

All the national daily papers bar two back the euro. Yesterday a weekly paper, Mandag Morgen, which surveyed 2,695 newspaper articles in the national press, concluded that the "no" side had come out on top in terms of helpful column inches.

Mr Bonde also conceded that the pro-euro camp's warnings on the consequences of staying outside the currency were influencing voters. Mr Bonde said: "When you hear that your job is at stake and your pensions are at stake if you vote 'no', and there will be 20bn [£1.6bn] kroner for the welfare state in the future if you vote 'yes', well, that works".

Throughout the early part of the campaign it was the opponents of the euro who appeared to have perfected the art of the scare story.

At one point the far-right anti-immigration Danish People's Party warned that the euro posed a threat, not only to Queen Margrethe's head on the national currency but to the monarchy itself.

But it was by suggesting that Europe would force Denmark to relinquish control of economic policy-making and thereby threaten its generous welfare state, that the "no" campaign hit home.

Claims that the state pension would be hit produced a panic-stricken response from the Prime Minister, Poul Nyrup Rasmussen, who announced a "pensions guarantee", pledging that the benefit would remain untouched.

As the alliance of euro enthusiasts feuded over who was to blame, the referendum looked as if it was destined to be a repeat of Denmark's 1992 rejection of the Maastricht Treaty.

At the end of last week, however, the "yes" campaign hit back by predicting higher interest rates and 20,000 fewer jobs if Denmark voted "no".

It also suggested that tough fiscal measures to counter a possible run on the krone might mean tax increases and public- spending cuts, potentially threatening the welfare state.

By contrast, "yes" campaigners spoke of higher wages, lower taxes and a 20bn kroner windfall over the next 10 years if the voters embraced the single currency.

Claus Larsen-Jensen, co-ordinator of the pro-euro campaign, said the referendum was "moving" in its favour, because people were examining the arguments. Danish interest rates are 0.25 per cent higher than in the euro zone and the government estimates that figure would be doubled in the event of a "no". Mr Larsen-Jensen asked why, given that the krone is linked to the euro through the Exchange Rate Mechanism, Denmark should not have the influence that went with being part of the whole project.

With tension rising, both sides are arguing for a strong Denmark with a generous welfare state - and each claims that the other would sacrifice that objective.

Whether this confusing and contradictory debate serves the voters well is a moot point. When parliament opened its doors to the public to discuss the euro yesterday, a special- needs teacher from Arhus spoke for many: "I think it is very confusing," said Gitte Thorsen, "and very difficult to find out what are the real consequences of joining the euro."