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What will decision to end EU defence opt-out change for Denmark?

In an historic referendum, two-thirds of voters chose to reverse Denmark’s EU defence opt out on Wednesday. But what does the result now mean for Denmark? 

What will decision to end EU defence opt-out change for Denmark?
Prime minister Mette Frederiksen speaking to the press at Christiansborg after a referendum shows Danes favour joining EU defence operations. Photo: Philip Davali/Ritzau Scanpix

The Ministry of Foreign Affairs has said today that Denmark can expect to join the European security and defence policies by 1st July 2022. However it is not quite that simple and there are a number of formal steps to take first.

At a post-election debate last night, Prime minister Mette Frederiksen said that before the vote was held, there had been “no discussions between the government and the parliamentary parties on how we translate a yes or a no.” 

“It is not the case that tomorrow we are ready to send skilled soldiers to the Balkans,” she added. “It requires very careful consideration, which must be reconciled with our NATO commitments and other tasks.” 

READ ALSO: Danes vote to scrap country’s EU defence opt-out

24 countries participate in Pesco (The Permanent Structured Cooperation), which is the European Union’s security and defence policy. They have 60 projects, including being able to move military forces and equipment quickly and efficiently.

This has proved important over the last few months after the war in Ukraine, where European countries have sent weapons to the Ukrainians, who were attacked by Russia in late February. 

Until Wednesday’s referendum, Denmark’s defence opt-out meant that the Scandinavian country, a founding member of NATO, did not participate in EU foreign policy where defence is concerned and did not contribute troops to EU military missions.

In practical terms this meant the country was not invited to meetings, had little influence and could not take part or finance any military operations.

Only when the 30 year defence opt-out has been formally abolished, can Denmark then decide how to participate in EU defence policy.  

The EU is currently involved in several military missions and Denmark could potentially now take part in at least two of them, in Bosnia-Herzegovina and off the coast of Somalia. Ultimately the decision would rest with the government and Frederiksen has promised that parliamentary parties will be involved in that process.

Niels Tønning, chairman of the Main Organisation of Officers at Denmark, told newswire Ritzau that the Danish armed forces are already stretched to capacity. Taking on a new mission — such as sending soldiers to the Balkans —  will require pulling soldiers from other active assignments. 

In general, Tønning says, EU missions are likely to be “softer” than NATO missions since the EU is primarily a political alliance and NATO’s purpose is defence. He offers as examples capacity-building missions, protection tasks, de-mining and peacekeeping missions, Ritzau reports. 

Turnout low

Denmark’s opt-out – retsforbehold in Danish – is one of four EU special arrangements negotiated by the Scandinavian country.

After the Danish public voted to reject the Maastricht Treaty in June 1992, Copenhagen obtained opt-outs in four sovereign areas: the single currency, justice and police matters, and EU citizenship along with defence, the latter which will now be scrapped.

66.9 percent of voters were in favour of scrapping the defence opt-out, against 33.1 percent voting against, with 100 percent of the votes counted just after 11pm according to KMD, which operated the referendum’s electronic result count.

Although Wednesday’s referendum was the clearest result of all nine referendums on EU issues in Denmark; the turn out was the second lowest.

65.8 percent of voters went to the polls, equating to 2.8 million people, according KMD. Only once before has voter turnout been lower, in 2014 when 55.9 percent of those eligible to vote went to the polls. In 2015, the most recent EU referendum, it was 72 percent.

According to election researcher Kasper Møller Hansen, the referendum on Wednesday follows a tendency for lower turnout in Danish elections.

“We are in a development where turnout falls not just for referendums, but also in, for example, the local elections last year”, he told newswire Ritzau.

 
 

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ENERGY

How European countries are spending billions on easing energy crisis

European governments are announcing emergency measures on a near-weekly basis to protect households and businesses from the energy crisis stemming from Russia's war in Ukraine.

How European countries are spending billions on easing energy crisis

Hundreds of billions of euros and counting have been shelled out since Russia invaded its pro-EU neighbour in late February.

Governments have gone all out: from capping gas and electricity prices to rescuing struggling energy companies and providing direct aid to households to fill up their cars.

The public spending has continued, even though European Union countries had accumulated mountains of new debt to save their economies during the Covid pandemic in 2020.

But some leaders have taken pride at their use of the public purse to battle this new crisis, which has sent inflation soaring, raised the cost of living and sparked fears of recession.

After announcing €14billion in new measures last week, Italian Prime Minister Mario Draghi boasted the latest spending put Italy, “among the countries that have spent the most in Europe”.

The Bruegel institute, a Brussels-based think tank that is tracking energy crisis spending by EU governments, ranks Italy as the second-biggest spender in Europe, after Germany.

READ ALSO How EU countries aim to cut energy bills and avoid blackouts this winter

Rome has allocated €59.2billion since September 2021 to shield households and businesses from the rising energy prices, accounting for 3.3 percent of its gross domestic product.

Germany tops the list with €100.2billion, or 2.8 percent of its GDP, as the country was hit hard by its reliance on Russian gas supplies, which have dwindled in suspected retaliation over Western sanctions against Moscow for the war.

On Wednesday, Germany announced the nationalisation of troubled gas giant Uniper.

France, which shielded consumers from gas and electricity price rises early, ranks third with €53.6billion euros allocated so far, representing 2.2 percent of its GDP.

Spending to continue rising
EU countries have now put up €314billion so far since September 2021, according to Bruegel.

“This number is set to increase as energy prices remain elevated,” Simone Tagliapietra, a senior fellow at Bruegel, told AFP.

The energy bills of a typical European family could reach €500 per month early next year, compared to €160 in 2021, according to US investment bank Goldman Sachs.

The measures to help consumers have ranged from a special tax on excess profits in Italy, to the energy price freeze in France, and subsidies public transport in Germany.

But the spending follows a pandemic response that increased public debt, which in the first quarter accounted for 189 percent of Greece’s GDP, 153 percent in Italy, 127 percent in Portugal, 118 percent in Spain and 114 percent in France.

“Initially designed as a temporary response to what was supposed to be a temporary problem, these measures have ballooned and become structural,” Tagliapietra said.

“This is clearly not sustainable from a public finance perspective. It is important that governments make an effort to focus this action on the most vulnerable households and businesses as much as possible.”

Budget reform
The higher spending comes as borrowing costs are rising. The European Central Bank hiked its rate for the first time in more than a decade in July to combat runaway inflation, which has been fuelled by soaring energy prices.

The yield on 10-year French sovereign bonds reached an eight-year high of 2.5 percent on Tuesday, while Germany now pays 1.8 percent interest after boasting a negative rate at the start of the year.

The rate charged to Italy has quadrupled from one percent earlier this year to four percent now, reviving the spectre of the debt crisis that threatened the eurozone a decade ago.

“It is critical to avoid debt crises that could have large destabilising effects and put the EU itself at risk,” the International Monetary Fund warned in a recent blog calling for reforms to budget rules.

The EU has suspended until 2023 rules that limit the public deficit of countries to three percent of GDP and debt to 60 percent.

The European Commission plans to present next month proposals to reform the 27-nation bloc’s budget rules, which have been shattered by the crises.

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