Euro crisis “central” to EU presidency

Europe minister says government had to consult parliament before deciding on whether to join the new EU fiscal compact treaty

Two weeks before Denmark takes over the rotating EU presidency, the Europe minister, Nicolai Wammen, released the governmentÂ’s four main priorities for the country’s six month term.

While the official priorities were  vague – a responsible, dynamic, green and safe Europe – Wammen told journalists at press conference in Brussels this morning that handling the Eurozone crisis will be the presidency’s main focus.

“Our most important job will be to build a bridge between Eurozone countries and countries outside the Eurozone,” Wammen said. “Denmark is taking over the presidency at one of the most difficult times, but is nonetheless looking forward to the challenge.”

Denmark will have a less visible role during this presidency than its last in 2002, in which it oversaw the expansion of the EU by ten new member states.

But with Danish representatives chairing vital EU meetings, DenmarkÂ’s role as mediator will be important.

“We will do our utmost to show that the EU can still make decisions and negotiate. There is no need for long discussions and institutional battles between countries. Europe needs action,” Wammen said. “Europe’s citizens are looking to us and expect us to find solutions to the problems that they are facing every day.”

On the question of Danish participation in the European fiscal compact treaty, Wammen maintained the government line that they would not make decision until all the facts were available and parliament had been consulted.

“We haven’t yet made a decision. We will participate constructively and actively in the process and when we know the details of the deal the Danish government will assess the economic, legal and political consequences of the deal, and then after meeting the political parties in the Danish government, we will make our position known.”

DenmarkÂ’s euro opt-out may prove problematic if the government decides to introduce the tightened financial regulation and budgetary discipline that the fiscal compact treaty entails.

This is because the regulations may be deemed to remove sovereignty from Denmark, in which case the opt-out states that Denmark has to hold a referendum. Such a vote, however, would be unlikely to pass due to negative public sentiment about the euro.

“Denmark has opted out of the euro and we will of course respect that,” Wammen said.

The cabinet found itself at odds last weekend after Villy Søvndal, the foreign minister, appeared to contradict PM Helle Thorning-Schmidt by stating that Denmark might have trouble joining the treaty if it meant the country would be unable to run a deficit in order to stimulate its economy.

The treaty would prevent member countries from running deficits of more than 0.5 percent, with those exceeding three percent facing automatic penalties.

Denmark is one of nine non euro EU states that have agreed to join negotiations on the deal, which all Eurozone countries will have to agree to.