A little politics
In 1660, King Frederik III established an absolute monarchy in Denmark, an absolutism that lasted until June 5, 1849, when King Frederik VII acceded to the wishes of the Danish people by adopting a constitutional monarchy, guaranteeing its citizens freedom of speech and religion. Since then, legislative power has been exercised by the sovereign, Queen Margarethe II (enthroned in 1972), and by a unicameral parliament, the Folketing or "People's Assembly", made up of 179 deputies, including two for the Faroe Islands and two for Greenland.
The head of government has been MetteFrederiksen since June 28, 2019. The formation of the government depends on parliamentary elections, which are held every four years. It is not uncommon to have to deal with a coalition government. This was the case after the last elections on June 5, 2019, won by the Social Democratic Party led by Mrs. Frederiksen. After three weeks of negotiations, a new government was formed on the basis of a political agreement entitled "a fair direction for Denmark", signed by 4 parties (Social Democrat, United List or Radical Left, Socialist People's Party (Greens) and Social Liberal Party). They hold an absolute majority in Parliament, with 91 of the 179 seats. The political arena is multi-party, with twelve parties, most of which are represented in Parliament.
The names of Danish political parties can lead to confusion, as they do not always strictly reflect a left-right affiliation: for example, the liberal Venstre party, which means "left", is a right-wing party! There are three major parties among the twelve existing parties: Socialdemokratiet, the center-left Social Democratic Party founded in 1871 (one of Europe's oldest parties). Mette Frederiksen has been the party's General Secretary since 2015. This political group primarily supports the rights of workers and the unemployed, and their ideas are relatively close to those of the Socialist Party in France. Their emblem is also a rose. Dansk Folkeparti, the Danish People's Party founded in 1995, is close to the extreme right, and regularly makes the cover of satirical newspapers.... It is often classified as "populist right". In 2019, it came second in the vote and has 37 seats. Chaired since its inception by Pia Kjærsgaard, MP Kristian Thulesen Dahl was chosen as her successor in 2012. In 2010, a split called Fokus was formed. Its policy is similar to that of the liberal Venstre party, but is much more radical on immigration. Venstre, a center-right liberal party founded in 1870 and rooted in Scandinavia's agrarian tradition, was the second-largest opposition party in the last parliamentary elections, led by Lars Løkke Rasmussen. It is banking on a policy based on business liberalization, reduced benefits for the unemployed and lower taxation.
Most of thecommitments announced by the new government after the elections concern the environment. In her opening speech, Mette Frederiksen declared that she "intends to take advantage of the economic recovery to deliver on the promise of an ambitious green transition". She pledged to spend an additional DKK 10 billion (€1.3 million) over the next five years to accelerate the reduction of carbon emissions. Its climate policy includes :
-Measures in the transport, agriculture and energy sectors. Denmark wants the European Union to become a "Climate Union", adopting interim climate targets for 2030 to ensure carbon neutrality by 2050.
- The promotion of wind power to make Europe self-sufficient in energy.
- A strengthening of the welfare state through massive investment in health and social policies, especially for children.
- A "fair and responsible" economic policy: a pro-business policy, stronger public services, the fight against poverty and inequality.
In November 2020, a major controversy led to a cabinet reshuffle. The Minister of Agriculture resigned in the wake of the government's decision to cull all mink farms, following the detection of mutant strains of the SARS-CoV-2 coronavirus. This massive cull (almost 15 million animals) caused a resounding scandal. For this reason, the parliamentary elections initially scheduled for June 2023 were brought forward to November 1, 2022, to renew the parliament, due to the withdrawal of support from the Social Liberal party. In June 2024, in the European elections, the Prime Minister's Socialdemokrat party came second to the Greens (Socialistisk Folkeparti, Greens/ALE), who led with 17.4% of the vote and were led by the youngest MEP in the outgoing Parliament, Kira Marie Peter-Hansen.
On the European stage, Denmark stands out for its four options for withdrawal from the EEC: the single currency (Euro), defense, justice and European citizenship - but it is a member of the Schengen area. Internationally, Denmark is a member of NATO, and was one of the founding members of the 12 countries that signed the founding treaty in 1949. Denmark's priorities are migration, sustainable and inclusive growth, democracy and gender equality. Very active in terms of "technological diplomacy", cybersecurity, innovation and digital transition, a post of ambassador dedicated to new technologies was created in 2017.
A little bit of economy
Denmark is a poor relation when it comes to raw materials and natural reserves. This is why 70% of imports consist of raw materials and semi-manufactured products! The country's economy and GDP are largely based on trade and exports with foreign countries, particularly European countries, which account for 40% of Danish merchandise exports (pharmaceuticals, agri-food, mechanical and transport equipment), or 43% of private-sector jobs. In the past, most exports came from the agricultural sector (only 10% in 1990): cereals such as wheat and barley, widely used to make beer, sugar and potatoes. Cattle, poultry, sheep and dairy products also account for a significant share of Danish exports. In short, foreign trade alone accounts for two-thirds of national GDP. It's easy to see why Denmark is a fervent supporter of free trade!
Another major sector is fishing, which is suffering from a steady reduction in the number of fish due to pollution, leading to a crisis that has reduced the number of full-time fishermen by two-thirds. Around 90% of production is destined for export (mainly cod and sandeels); in forestry, the forest produces 12% of national wood consumption, and Denmark is the main exporter of Christmas trees and ornamental wood (0.3% of exports); energy: gas deposits (discovered in 1979) cover 23% of total electricity consumption. By 2021, renewable energies will account for 43% of consumption, with 64% biomass and 20% wind power; tourism, with 7.5 million visitors in 2021, 348 cruise ships docking at Copenhagen harbor and 1.1 million passengers in 2019, 56.1 million overnight stays in 2019, 25% more than in 2009.
In total, tourism generated 3.81 billion euros in 2021 (or 1% of Denmark's GDP; in comparison, agriculture, fishing and forestry only account for 2.4% of GDP), ranking the country 14th worldwide. The sector employs 160,000 people. It should be noted that the considerable reduction in air fares, the opening of new routes, the image of a safe country, a more temperate climate when heatwaves multiply... all contribute to this increase, as does Denmark's past (as a Viking nation) which attracts a great deal of interest, brought up to date by TV series such as Vikings or The Last Kingdom.
For some years now, the Danish laboratory Novo Nordisk has been a star on the stock market. Its drugs, Ozempic (for diabetes) and Wegovy (for weight loss), and their worldwide success, have enabled Denmark's GDP to grow by 2.1% in 2024. Quite a feat! In fact, by August 2023, the pharmaceutical company's market capitalization already exceeded the country's GDP, with no end in sight!
The Danish miracle
This is how Denmark's economic model is perceived in France, even though after enjoying a substantial budget surplus, thanks in particular to oil activities in the North Sea during the 2000s, the Danish economy suffered a sharp recession in 2009. Since 2014, however, it has posted steady growth (close to 2% on average) and improved public finances. Its economy continues to flourish, particularly since 2022, with a notable rise of 14.4%. The main economic driver remains rising private consumption, thanks to rising real wages and steadily falling unemployment (5.7% in 2017, 5% in 2018, 4.1% in March 2024).
The government's reform of the welfare state has enabled us to move from a sluggish economy to a dynamic one that is the envy of many European countries. The key to this success is "flexicurity", i.e. a flexible labour market combined with effective training and high levels of mobility. What's more, Denmark's strategic geographical position between continental Europe and Scandinavia - combined with its economic stability and state-of-the-art infrastructure - make it one of the most attractive countries for foreign investment. Thanks to a well-managed labor market, the number of unemployed (13% at the end of the 1980s) will fall to 4.1% in March 2024, thanks in particular to a policy of job-search assistance for young people. This financially generous policy does, however, have its price: after six months out of work, under-25s are obliged to accept a training course that costs half their benefit. Another key to understanding the drop in the unemployment rate is the use of part-time work, which concerns 19% of Danish employees. For working people, the benefit system is maintained (80% of their monthly salary for five years). However, as unemployment insurance is not compulsory in Denmark, employees can voluntarily join an unemployment insurance fund approved by the State and operating under its supervision. As a result of flexicurity, Denmark today has one of the highest employment rates in the European Union: 75.6% for women and 80.6% for men.
During the Covid-19 health crisis, the Danish government swiftly took unprecedented economic measures: wage compensation (short-time working), assumption of fixed costs, VAT deferral, a new system of guaranteed loans for SMEs... and the self-employed, as well as for travel agencies (state guarantee fund), students (financial aid), culture and events. In total, these aid schemes amounted to some DKK 400 bn (€53.6 bn), including just over DKK 100 bn (€13.4 bn) in direct aid, or 5% of GDP.
What about the Faroe Islands?
Politically, the Faroe Islands became an autonomous territory in 1948, having been under Danish rule since 1388. The capital is Tórshavn. This is the seat of the unicameral parliament, the Løgting, which is responsible for all powers except defense. It is headed by a Prime Minister, the Løgmaður or "person of law", Aksel V. Johannesen since 2015. He works with 33 government members elected by universal suffrage for four-year terms. Each year, the islands receive substantial subsidies from Denmark. As an autonomous territory, they are part of the Nordic Council, but their special status means they are neither recognized as an independent nation by the UN nor as a member of the European Union. They do, however, have their own flag and their own language, Faroese, although Danish must be taught.
A question that often recurs in the political expectations of its inhabitants: total independence. A dilemma that punctuates the hesitations of independentists is the economic aspect. The local economy is essentially based on fishing, which accounts for around 97% of exports (mainly herring and mackerel) and half of GDP. Added to this is oil extraction - since the summer of 2012, the Norwegian company Statoil has obtained concessions to prospect in the eastern part of the archipelago - and tourism, which was on the rise before the health crisis of 2020 (+13% in 2019), is developing again. In 2022, tourism generated DKK 1.5 billion and welcomed 110,000 visitors.
New hotels and an appearance in the latest James Bond film have turned the spotlight on the North Atlantic! Despite successive crises, unemployment fell from 2.2% in 2017 to 1% in 2023. Nevertheless, this low unemployment rate needs to be tempered. It has more to do with the massive exodus of young people, particularly to Denmark, than with the good health of the economy. This exodus is penalizing the development of high value-added industries and services such as ICT (information and communication technologies).
