Denmark rejects single European currency

COPENHAGEN, Denmark -- Denmark has voted to reject membership of Europe's single currency.

With all the votes counted, 53.1 percent of voters rejected membership of the euro, and 46.9 per cent voted in favour of adopting it.

Danish Prime Minister Poul Nyrup Rasmussen, who had argued in favour of membership, said Denmark had not rejected Europe as a whole.

"When you fight so hard and do not reach the goal, we must see this as a defeat for me, a defeat for our campaign. Denmark has spoken -- our people the Danes have spoken -- and I'm very pleased that so many Danes have cast their vote," he said.

VIDEO CNN's Jim Bitterman reports on Denmark's decision not to adopt the Euro Play video (QuickTime, Real or Windows Media) CNN's Jim Bittermann takes a look at the opposing sides Play video (QuickTime, Real or Windows Media)    IN-DEPTH Denmark rejects the euro   • Overview   • Head to head   • Key players   • Timeline   • View from Denmark   • Photo galleries   • Vox pop  ON-AIR Denmark election coverage on CNN International Read and view CNN.com European Political Editor Robin Oakley's four-part series on the Danish euro vote as it appeared on World Business This Morning and World Business Today, Monday, September 25 through Thursday, September 28:  Monday :  •  Overview of the issues  •  Watch the video  •  See interview with Denmark's prime minister  Tuesday :  •  The opposing campaigns  •  Watch the video  •  Interview with June Movement leader  Wednesday :  •  Visit to Tivoli Gardens  •  Watch the video  •  Interview with Danish foreign minister  Thursday :  •  The wider concerns  •  Watch the video On Wednesday, September 27, Q&A with Riz Khan focused on Denmark and the euro.  •  Identity  •  Impact abroad  •  Sovereignity On Thursday, September 28, CNN International Insight aired The euro: Denmark decides.  •  Early polls  •  What next?  •  Oakley on returns  •  Defeat for Euro  •  Leaving the Euro  •  Reaction

European Commission President Romano Prodi said the commission regretted the outcome of the vote. "We will continue along our path," he said.

Rejection of the euro in Denmark is expected to send shockwaves through the European political establishment, further denting confidence in the ailing single currency.

Exit polls in the final hours of voting had showed the gap narrowing between the anti-euro "no" vote and those who wanted Denmark to be the 13th member of the euro zone.

The result almost exactly mirrored the results of a 1992 referendum when Danes rejected the Maastricht Treaty -- the blueprint for monetary union. That vote prompted a crisis in Europe and caused panic inside the Exchange Rate Mechanism.

Thursday's referendum, the first time a European Union state has had the chance to vote on the issue, was seen primarily as a test of public confidence in the EU's single currency.

But many believe Danish rejection of the euro could also deepen divisions within the 15-nation European Union, with euro zone members forging ahead with closer ties and leaving the euro "outs" in the slow lane.

Both the "yes" and "no" camps in Denmark have fought hard to appeal to voters, handing out leaflets to voters even as they entered the polling stations.

Most of the political establishment and business community backed the adoption of the Euro, saying it would make the economy stronger and prevent the flight of money from the country.

Rasmussen said before the poll that a "no" vote would diminish Denmark's role in plans to enlarge the European Union.

However, he added that he did not believe a "no" vote would create a two-speed Europe, in which Denmark and some other countries not part of the euro would be left out of other plans to forge ahead with political and economic integration.

Opponents, including the greens and communists, believe that a single currency would erode Danish sovereignty.

The krone has been fixed to the euro since the beginning of last year after being pegged to the deutschmark since 1982. Should a "no" vote triumph, the prime minister has said the krone would continue shadow the single currency.

The euro took effect in 11 of the 15 EU countries in January 1999 for corporate and investment transactions, with coins and bills to be introduced in January 2002.

Denmark, Britain and Sweden opted out while Greece, which was barred from membership because of high inflation and a budget deficit will join on January 1 2001.

The referendum, the first time a European Union state has had the chance to vote on the issue, was seen as a test of public confidence in the currency, which has lost 21 percent of its value against the US dollar since its launch last year.

German Bundesbank governing council member Klaus-Dieter Kuehbacher said in Frankfurt that the Group of Seven (G7) big powers were ready to step in to support the euro in the event of a "no" vote.

German Finance Minister Hans Eichel said the euro zone would move ahead even if Danes voted "no".

"Europe will move forward. European integration is an historic process which is irreversible, but the sooner you join the better," he told reporters in Berlin.

The "no" vote is also expected to influence the other two EU members outside the euro zone, Sweden and Britain, both due to ask voters to decide on euro membership in the next few years.

But European leaders played down the risks to the euro of Danish rejection.

French Prime Minister Lionel Jospin said Denmark was a small nation and a "no" decision would pose "no problem" for the euro.

British Prime Minister Tony Blair, struggling in opinion polls and facing a possible general election next year that could be dominated by the European issue, dismissed any threat that a Danish "no" would hijack Britain's euro debate.

Asked if it would mean a delay in a British referendum, he said: "No, it doesn't. Denmark has got its own decision and we have got our own decision."

The Associated Press & Reuters contributed to this report.

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