5 - 11 October 2000

Denmark's euro vote

The result of Denmark's referendum on the euro which is being held today will have important consequences for the rest of Europe. Until yesterday the opinion polls were showing that those who were against the single currency slightly outnumbered those who were in favour of it. The vote, however, can go either way.

If the Danes vote in favour of the euro, such a result will no doubt be interpreted as a triumph for monetary union and for further European integration and will put pressure on Sweden and perhaps even Britain, to follow suite and join the single currency. A "no" vote, on the other hand, will give encouragement to eurosceptics and will give comfort to those in Britain and Sweden who do not wish their country to enter the eurozone. Such a result will also be perceived as a blow to European integration and a victory for the nation state.

On strict economic grounds, there is little doubt that joining the euro is in Denmark's best interest. Most of the country's trade is with members of the eurozone, which means that exchange rate risk for Danish businesses will be eliminated once the single currency is adopted. Furthermore, the Danish krone is tied to the euro, after first being tied to the deutschemark, so the krone's interest rates are in effect decided by the European Central Bank. It has therefore already virtually conceded control of its monetary policy.

However, it seems clear that the Danish voters will not be voting on strict economic grounds. Politics will play a vital role in today's vote. The Danes are not the most enthusiastic europhiles and many perceive the adoption of the single currency as a surrender of sovereignty and the chipping away of their national independence. This might be a flawed argument but nevertheless such a perception exists.

It is also true, however, that the Danes are very keen to hold on to their social and economic policies, such as a generous welfare state, and are worried that joining a monetary union might put these policies in jeopardy. On the face of it there is no reason why joining a single currency should mean cutting down on the welfare state but to back up their arguments the eurosceptics point to certain European demands for greater economic harmonisation across the Union. This is certainly understandable.

One must ackowledge that the European Union is a diverse group of nation States and sometimes certain policies aimed at deeping political and economic integration are not always appreciated. The result of today's referendum will give us an indication of the mood towards such integration among Danish voters.

Reforming public broadcasting

The government's declared policy of believing in public broadcasting as well as its intention to reform this sector is correct if not somewhat overdue. Allowing broadcasting to be dominated by the political parties would be both unwise and dangerous; allowing PBS to carry on functioning as it has been would be very unfair on the taxpayer.

The government has announced some minor reforms in broadcasting to make PBS more efficient. It has, however, decided not to announce any redundancies at PBS and has ignored the most important recommendation of a report drawn up by the university last December, namely that half the workforce at PBS should be made redundant. It has instead declared that Radio Malta 1 and 2 are to be merged into one radio station and revenue from television licences will not all automatically be channelled to PBS, meaning that the company will increasingly have to be run on commercial lines.

Such reforms are a step in the right direction but considering that the State owns four radio stations and three television stations, perhaps there could have been further mergers. Do we need, and can we afford, such a large public presence in broadcasting? Furthermore, what is being done to reduce political interference in the running of public broadcasting, which has caused so many problems over the years?

The main problem with public broadcasting in Malta, however, has always been the excessive number of employees working with the state broadcasting company. Louis Galea, the minister responsible for broadcasting, has said that the reduction of employees at PBS would only be considered as "a last resort, after every other possibility would have been exhausted." However, in this day and age it is simply not acceptable for the taxpayer to continue to fund a company that has twice as many employees as its needs. Considering Malta's financial situation, this is what the government should be keeping in mind.