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The Kingdom of Denmark
Country Report
Denmark: Political Structure
The political structure of Denmark is a parliamentary constitutional monarchy.[1]The government is broken up into executive, legislative, and judicial levels of jurisdiction. The political structure is a multiparty system where several parties can make up Parliament at any time.[2] However, there has been no party that has had the majority in Parliament since 1909.As of June 2015, the Liberal party (Venstre) has the most seats in Parliament, so Prime Minister Lars Loekke Rasmussen is the leader of the majority party coalition. The executive branch of government is comprised of the head of government, the prime minister, and the chief of state, the monarchy. Since 1972 Queen Margrethe II has reigned as head of state.[3] Her son, Crown Prince Frederik, will take the throne after she steps down.
Unlike other countries, Denmark has only one legislative body. It is a representative democracy, so all the members of Parliament (also known as the Folketing) are elected by the Danish citizens. Elections are held at least every four years, but they can be held more often depending on the Prime Minister. The parliament is comprised of 179 members total. Of that total, 175 Members are elected to represent Denmark, two are elected to represent Greenland, and two for the Faroe Islands.[4]
The judicial branch is composed of multiple courts. The highest court, the Supreme Court, consists of the court president and 18 judges.[5] The judges are recommended by the Minister of Justice and the Judicial Appointments Council, but then officially appointed by the monarch. Other courts in the system are county courts, High Courts, Special Court of Indictment and Revisions, and the Maritime and Commercial Court. Denmark has also in recent years had a number of issues with Muslim extremism and freedom of speech incidents.
Denmark: Economic Overview
Welfare and ‘Flexicurity’
Under the Denmark welfare system, all citizens have equal rights to social security under the law.[6] Services such as education and health are all subsidized by the state. As a result, the taxation rates placed on the citizens are one of the highest in the world. However, the Danes enjoy a high standard of living and equitable distribution of wealth. Besides free education, health, and retirement services, the Danes also have a program called “flexicurity.” The program of which has been successful at managing the challenges of globalization and securing economic growth and employment. It is comprised of flexibility, security, and an active labor market policy.[7]The Danish government takes great pride in the country’s unique labor procedure. Hiring and firing of employees is made easy in order to support the need for companies to adapt to market changes. Denmark’s strong social welfare system and unemployment benefits ensure that Danish workers are not hurt by changes in employment. Danes generally do not have to fear extreme poverty and are guaranteed to receive basic health care. On average 25-35% of the workforce in Denmark change employers in a given year. This ‘flexicurity’ policy gives Danish businesses a competitive advantage while not comprising the needs of employees.[8]The World Bank ranked Denmark third out of 189 countries for “ease of doing business” in the 2015 report.[9]After witnessing the success Denmark has had with globalization as the result of ‘flexicurity,” the European Council adopted some of its components in 2007. The hope was to use the model as a guide for other European Union countries.
Denmark in the European Union
Denmark joined the European Economic Community in 1973, and in 1993 ratified the Maastricht Treaty, becoming a member of the European Union. However, this was only done on the condition of Denmark gaining four opt-outs (common defense, common currency, EU citizenship, and certain aspects of legal cooperation, including law enforcement). Danes remain wary of economic integration with Europe, because of a fear of losing national identity as well as a lack of confidence in the stability of European economies. These sentiments were evident in the September 28, 2000 referenda on joining the Euro, which was rejected by over 53% of the population. Since then, Denmark has still refused to adopt the Euro. As of June 2016, Denmark still uses its Kroner has been pegged to the Euro at a rate of 7.44 Kroner to 1 Euro.[10] It is important to note that Denmark is also the strongest supporter of trade liberalization.[11]
Economy Type
Denmark is a small country, but it has many natural resources available to it on both the mainland and its territories. Historically an agriculture-led economy, Denmark began shifting towards the service sector in the 1950s. Today, Denmark enjoys a fully modernized economy and one of the highest standards of living in the world among its population. Their economy features a high-tech agriculture sector, advanced pharmaceuticals development, and maritime trade.[12] In a breakdown of their GDP composition by sector, 1.3% is agriculture based, 22.4% is industry based, and 76.3% is services based. Although they are self sufficient in food and energy, they are dependent on foreign trade and require raw material imports for their manufacturing sectors.
Denmark has historically had a fundamentally strong economy. From 2004 until 2007 Denmark experienced an economic boom powered by a significant boost in private consumption. In 2006, Denmark was voted the most competitive and dynamic economy by the World Economic Forum. However, the global financial crisis would catch up to Denmark by the end of 2007, and with the end of the housing boom and the collapse of global trade, Denmark became the first European country to officially fall into a recession when it announced negative GDP growth in the final quarter of 2007 and first of 2008.[13] In addition, Denmark’s incredibly low unemployment rate of 1.70% in May of 2008 rose to over 4% by the end of 2009 and continued to slowly rise to 4.7% by June 2015. Danish exports were also hurt by the global economic slowdown and the devaluation of the currencies of its trading partners, and exports dropped by 20%.[14] However, Danish exports have quickly bounced back, and according to Copenhagen, have returned to pre-financial crisis levels of a trade surplus.[15]
High worker productivity has been a point of pride for Denmark; however, Denmark’s productivity growth rate is projected to be one of the lowest among Organization for Economic Cooperation and Development (OECD) countries over the next ten years. It also dropped from the 6th richest OECD nation in 1997 to the 12th in 2007. Like many of its European neighbors, Denmark is facing an aging population. This not only threatens to put a strain on Denmark’s generous welfare system, but could lead to labor shortages as soon as 2012. In addition, around 22.6% of Denmark’s working-age population was living mostly on public transfer payments in 2009, which puts a heavy burden on other parts of the Danish welfare system and has affected the quality of public health care. This has led to growing political debate about reforming the welfare system in order to ensure its solvency.[16]
Denmark Economic Overview[17] (in US$)GDP / $291 billion
GDP (PPP) / $257.1 billion
GDP (Per Capita) / $45,800
GDP (Real Growth Rate) / 1.6%
Unemployment / 4.7%
Inflation Rate / 0.6%
Net Exports / +$10.29 billion
Denmark: Demographics
As of 2016, the population of Denmark was 5,724,456 people.[18] The ethnic makeup of which is Scandinavian, Inuit, Faroese, German, Turkish, Iranian, and Somali. The official language is Danish, but there are a variety of other languages that are spoken regionally including Faroese, Greelandic and German. However, English is predominant second language of the country.
One of Denmark’s concerns is the low population growth rate. As of 2016, the population was growing at 0.22%.[19]The average age for males and females is about 42 years old. Therefore, the low growth rate is not a concern yet, but once the majority of adults currently working retire, there will less people to care for the elderly. Since Denmark is a welfare state, the burden of higher taxation on a generation will hurt will hurt the economy and the standard of living.
Research and Data Development provided by Aishwarya Sadh,Kirsten Zeller and Alex Zelinski, Research Assistants, under the supervision and coordination of Dr. Gerard Janco, President, The Eurasia Center/EBC.
[1] CIA World Factbook, 6 May 2016
[2] The Official Website of Denmark, 2016
[3] CIA World Factbook
[4] The Parliamentary System of Denmark, 2012
[5] CIA World Factbook
[6] The Official Website of Denmark
[7] ibid
[8] A Unique, Secure and Flexible Labour Market,
[9] Doing Business 2015, 2015
[10] US Relations With Denmark, 2 September 2015
[11] CIA World Factbook
[12] ibid
[13] Denmark Down But Not Out,
[14] US Relations with Denmark
[15] Danish Exports Back on Track,
[16] Ibid
[17] CIA World Factbook
[18] ibid
[19] ibid