Question: Is the focus on Iraq a distraction from the war on terror and has the US squandered European goodwill after September 11?

Poul Nyrup Rasmussen: That is entirely dependent on how you deal with the Iraqi case and that is very much connected to how the process is implemented in the coming weeks.

What is fundamental, right from the beginning, is that the United Nations is the legitimate basis for the process. If that is the case you couldn't argue that it is a distraction from the fight against terrorism.

Secondly, of course, it is fundamental that the fight against terrorism is based upon insisting that your global alliance is still there. If the global alliance falls apart then we have problems, serious problems, which we will have among our ordinary people also.

As far as the common back-up to the fight against terrorism is concerned, I would say that the Iraqi question doesn't need to be a distraction in ordinary people's mind from the fight against terrorism - as long as it is closely connected to the UN and as long as the process is handled through the UN.

Question: Denmark like Britain has backed the tough US approach on Iraq- do EU splits on this issue give the lie to the idea of a common EU foreign and security policy?

Poul Nyrup Rasmussen: I'm worried also about Iraq and we should be very, very careful about how to handle it. In my mind we should give the possibility of weapons inspectors coming in a fair chance. It's important to be very goal-orientated about disarmament, no less, no more. There's a discussion in Europe but don't forget the reality behind it.

I feel that the Danish government as the presidency of the European Union has been too inactive in formulating a common EU Iraqi policy. We could have done more and should have done more even if it is difficult. My temperament and vision is that we should have been more proactive, perhaps we could have been some sort of a catalyst to make some progress in European countries.

I feel it is right now that it is time to intensify your contacts between smaller and bigger countries and all the difficult arguments need to be taken up.

Question: Denmark opts out on defence and JHA yet holding the presidency these are priority areas, your country's voters have not been consulted - the issue has been put off until 2004. Does this kind of approach increase cynicism with EU institutions? Is it right for ministers to agree JHA measures - arrest warrant - before consulting their parliaments?

Poul Nyrup Rasmussen: I would say about the European arrest warrant that here ordinary people would not view this as cynicism. Because the European warrant is part of the anti-terrorist legislation in people's minds. I supported it myself in my speech as prime minister in parliament in October last year as part of an ambitious programme in the fight against terrorism.

This kind of example I would place as a necessity of the global and European fight against terrorism.

Generally speaking, we have said now in my party that time has passed all of the opt-outs in the new situation and development - it is no longer in the interests of my country to insist on the opt-outs. Therefore our vision is to get rid of them in one or more referendums. We have said that publicly and at my party's conference in September of this year.

There has been a move in European attitude - including that of the Danish people. Right now we have a substantial majority for the euro, for example, in the opinion polls, things are moving now - to the benefit of my country. I think our people want to see Denmark as full member of European Union in all areas, to ensure our influence.

Question: There have been a series of setbacks for the European centre left and social democrats - Denmark, France and a close shave in Germany - those reverses have raised the question of whether Europe's elites, particularly pro-EU elites, are out of touch with voters. Are they?

Poul Nyrup Rasmussen: First of all it is worth while underlining that social democrats themselves have a certain responsibility for the distance between ordinary people and the European Union project. Because we are still using too much language of a technical or of a complex institutional oriented character which ordinary people, hard working people, do not understand.

We should really, really concentrate our efforts to talk about, and define goals which are relevant to ordinary people. That means employment, that means environment, that means security, that means a common immigration policy, all subjects that should be recognisable in people's lives.

Point number two, it has always been difficult to make international cooperation in one form or another a very popular project - that goes for NATO, that goes for other things. Not in the sense that people do not understand the necessity for NATO and the EU, but in the sense that they should engage themselves with it.

Yes, it is characteristic that the populist parties and the far right are generally speaking against the European Union project, trying to gain votes from the electorate. It fits into a picture of the world that you should look inwards, come back to old times. That is the melody they play.

But this is not enough to explain the increase in votes which the far right have obtained among electorates.

There are other factors. The fundamental is a general feeling of insecurity and uncertainty for the future.

This general feeling of uncertainty should be seen, in combination with the globalisation issue, and efforts by the far right to tell people that the European Union is part of the problem not part of the solution, while we're telling people that it is the other way around.

All in all: Feelings of general uncertainty are splitting our people, among those embracing the future and globalisation and those who fear. And there is an obligation for a social democratic party, be it new Labour or be it my party, to ensure the coherence in our countries. This is not easy.

What is our response? It is the ambition to formulate a policy that gives an answer to the uncertainty and fear. There has been a tendency among us to talk too much about other things. How can you create certainty in a world under permanent change? I think an essential part of the answer is: To equip people with tools to manage their lives in a world under permanent change. To insist on the people, an active welfare state that will assure them that if they come into trouble - if they lose a job and look for another, or if they feel that education is no longer responding to actual job opportunities - then you have a strong welfare state which can give you new opportunities. That is a core answer to the future.

Question: You come from a very similar political background and approach to the government in the UK but you lost a euro-referendum - what advice would give Tony Blair on how to fight a campaign and win?

Poul Nyrup Rasmussen: First: Take your time. Second: Make your preparations properly and fundamentally.

A campaign to make a recommendation to say 'yes' to the euro is not a one-sided argument, it is a conclusion of a good analysis on the pros and cons.

You should avoid a referendum coming at a time when you have global problems of an economic character.

I remember with our campaign when I stood up - on television news - and said the euro is very strong and it will be a enormous plus for Denmark to be part of the umbrella so we secure finances in to the future. Ten seconds later the euro is dropping dramatically compared to the dollar.

We can understand it as economists but it is an enormous leap for me to say the euro is strong and ten seconds after the euro is dramatically falling in exchange-rate to the Dollar.

Therefore my advice is: Make the planning for a referendum in a period of economic stability in Europe. Then I really think it would be possible to obtain a 'yes'.

Question: Is it a political or economic issue in your view?

Poul Nyrup Rasmussen: It is both.

I would say the Danes, many, many Danes, have now seen the functioning of the euro in practice. And they have seen two things. They have seen one currency in terms of exchanging money at each frontier. They have seen now that is a good well-functioning system. Secondly, they have seen the Dutch are still Dutch, the Italians are still Italian and so on and so forth. So you have to see it in practice. You can see that your identity is not crushed - on the contrary. You can see the economic processes are there to the benefit of ordinary people.

In terms of politics, to obtain influence on decisions that effect your own nation: Nobody should decide on my future, if I am not at the table.

Question: What about concerns among social democrats that stability and growth pact budgetary controls could limit the political agendas of centre left governments?

Poul Nyrup Rasmussen: Yes and no. Would you, honestly speaking, in your own national economic policy go far beyond the stability pact. Gordon Brown and the new Labour government, have with great success, moved the old fashioned criticism of social democratic governments - that they are not responsible as far as economics are concerned. Nobody is questioning the responsibility of Gordon Brown's economic policy today.

Would you in practice with your national policy, in more than one year, make an economic policy which surpassed the stability and growth pact. I doubt it.

Question: Tony Blair has promoted the European council as the best forum for getting things done in Europe - how do the smaller countries like Denmark fit in?

Poul Nyrup Rasmussen: As far as my own experience goes I feel he is right to say that the European council is a good place for making arguments and well prepared policies. That goes, of course, for bigger countries and also fore smaller counties.

But I must add that it is very important that a further focusing on the European council should not be realised at the cost of a weakened commission. We would not have an environmental chapter in the Amsterdam Treaty without a very effective interplay between some progressive governments, including my own, and the commission.

The commission does play a role in a progressive policy for the European Union.