Danish rebuff spurs Europe's hard core

They were trying to stop Europe's integration in its tracks, but the recalcitrant Danes instead may have accelerated its progress, at least in the hard core of committed countries.

They were trying to stop Europe's integration in its tracks, but the recalcitrant Danes instead may have accelerated its progress, at least in the hard core of committed countries.

As the continent pondered the implications of Denmark's crushing rejection of the euro, the talk was of an emerging two-speed Europe, bringing with it a new set of problems for Tony Blair.

Not long ago things were looking up for the government's European policy, as the Prime Minister shaped the agenda at the Lisbon summit on economic reform. But the mood has changed and Denmark's decision has crystallised the split between Europe's enthusiasts, such as France and Germany, and its laggards - Denmark, Sweden and Britain.

Even before Thursday's result there was impatience with Mr Blair's tortoise-like progress towards the euro. After Denmark's rebuff there is a realisation that a British referendum will be later rather than sooner.

In Denmark, Sweden and Britain, the Danish outcome will bolster Euroscepticism: even as he toasted their victory with Danish beer on Thursday night, one of the leading opponents of the euro, Jens Peter Bonde, was promising to harry his government ever harder on European issues.

With an election looming, Mr Blair can expect nothing less from the Conservatives. And other governments, still committed to European integration, are also under pressure. They will be pushed to make some genuine gains for an EU that has now lost momentum.

A recent poll in the French paper, Libération, for example, showed a big majority in favour of more integration. And 10 days ago, the Belgian premier, Guy Verhofstadt, spoke for many at the core of the project when he said that Europe was like a bicycle: if you don't move forward, you fall off.

The first potential flashpoint comes next month, when heads of government meet in the fashionable coastal resort of Biarritz to discuss Europe's proposed new Charter of Fundamental Rights. This German-inspired project has been designed to make the EU more consumer friendly by laying down citizens' rights.

Mr Blair and several other leaders have insisted that the document is not written into EU law. But the content of the charter is already proving politically troublesome in Britain since it highlights social and economic entitlements, such as the right to strike. While the trade unions generally applaud the charter, the Confederation of British Industry is a vociferous critic.

If Mr Blair navigates this minefield, his next problem comes in December in Nice at a bigger summit. Not only is the charter due to be approved then, but an Inter-Governmental Conference will decide changes to the EU's treaty to prepare for enlargement to the east.

Tricky issues need to be finalised, including a change in the weighting of votes within the European Council, and a reduction in the number of European commissioners and in the number of policy areas in which member states have a veto.

But to this troublesome list has been added a more fundamental question which could shape the future of the EU. To bypass objections from Eurosceptic nations, Germany and France now want closer (or "reinforced") co-operation, allowing willing countries to integrate faster. Naturally, Britain suspects it will excluded from key areas of influence.