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 request of the Danish people by adopting a constitutional monarchy, thus 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," composed of 179 members, including two for the Faroe Islands and two for Greenland.
The head of government has beenMs. Mette Frederiksen since June 28, 2019. The constitution of the government depends on the parliamentary elections that take place every four years. It is common 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 Ms. 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, Unitary 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 and includes 12 parties, most of which are represented in Parliament.
The names of Danish political parties can be confusing, as they are not always strictly left-right: 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 centre-left Social Democratic Party founded in 1871 (it is one of the oldest European parties). Mette Frederiksen has been secretary general of this party since 2015. This political group primarily supports the rights of workers and the unemployed, their ideas are relatively close to those of the Socialist Party in France. With for emblem, also a rose. Dansk Folkeparti, a Danish people's party founded in 1995, approaches the far 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 in 2012 to succeed her. In 2010, a split called Fokus was formed. Its policy is close to the liberal Venstre party but is much more radical on immigration. Venstre, a centre-right liberal party founded in 1870, stemming from the Scandinavian agrarian tradition, was the second largest opposition party in the last legislative elections, headed by Lars Loekke Rasmussen. It is betting on a policy based on the liberalization of businesses, reduced aid for the unemployed and lower taxes.
The commitments announced by the new government at the end of the elections mainly concern the environment. In her opening speech, Ms. Mette Frederiksen said she "intends to use 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. Indeed, 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 energy so that Europe becomes self-sufficient in energy.
- A strengthening of the welfare state through massive investments in health and social policies, especially for children.
- A "fair and responsible" economic policy: a pro-business policy, a strengthening of public services, the fight against poverty and inequality).
In November 2020, a major controversy resulted in a cabinet reshuffle. The Minister of Agriculture resigned following the government's decision to cull all mink farms after the detection of mutant strains of the SARS-CoV-2 coronavirus. This massive slaughter (nearly 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, in order to renew the parliament due to the withdrawal of support from the Social Liberal party.
On the European level, Denmark stands out for its four options for withdrawal from the EEC: the single currency (Euro), defence, 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 1949 NATO treaty. Denmark's priorities are migration, sustainable and inclusive growth, democracy and gender equality. Very active in terms of "technology diplomacy", cybersecurity, innovation and digital transition, an ambassador position 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. That is why 70% of the 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. European countries account for 40% of Denmark's exports of goods, including pharmaceuticals, food processing, mechanical and transport equipment, and 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, which are widely used to make beer, sugar and potatoes. Cattle, poultry and sheep, and dairy products also accounted for a large share of Danish exports. To sum up, foreign trade alone accounts for two thirds of the national GDP. It is easy to understand why Denmark is a fervent supporter of free trade!
Another major sector is fishing, which is undergoing a constant reduction in the number of fish due to pollution, resulting in a crisis that has reduced the number of full-time fishermen by two-thirds. About 90% of the production is destined for export (mainly cod and sandeels); in forestry, the forest produces 12% of the national wood consumption, and Denmark is the main exporter of Christmas trees and ornamental wood (0.3% of exports); energy: gas deposits were discovered in 1979, they cover 23% of the total electricity consumption. Wind turbines alone produce 18% and account for 3% of Danish exports; tourism with 12.5 million visitors in 2018, 348 cruise ships docked in Copenhagen harbor and 1.1 million passengers in 2019, 56.1 million overnight stays registered in 2019, 25% more than in 2009.
A total of 132.5 billion kroner spent, of which 57.5 billion from foreign tourists and 74.8 billion from Danish tourists (or 5.7% of Denmark's GDP, in comparison agriculture, fishing or forestry represent only 2.4% of GDP). This sector employs 160,000 people. It should be noted that the considerable drop in airfares in recent years undoubtedly contributes to this increase as well as the past of Denmark (as a Viking nation) which attracts a lot of people, brought up to date by television series such as Vikings or The Last Kingdom.
The Danish miracle
This is how the Danish economic model is perceived in France. After experiencing 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. But since 2014, it had been growing steadily (close to 2% on average) and its public finances were improving, and its economy continued to flourish despite signs of a slowdown and the aftershocks of the global financial crisis. The main driver of the economy was rising private consumption, thanks to rising real wages and a continued decline in unemployment (5.7 percent in 2017, 5 percent in 2018, 4.8 percent in november 2019).
The government's reform of the welfare state has led to the transition from a sluggish economy to a dynamic economy that is the envy of many European countries. The key to this success is "flexicurity", i.e. flexibility in the labour market combined with effective worker training and high mobility. In addition, its strategic geographical position between continental Europe and Scandinavia, as well as its economic stability and state-of-the-art infrastructure, have made Denmark one of the most attractive countries for foreign investment. It has managed the labor market so that the number of unemployed (13% of the active population at the end of the 1980s) has decreased thanks to its policy of helping young people find jobs. This financially generous policy does, however, require some counterparts: after six months without work, those under 25 years of age are obliged to accept a training course that costs half their benefits. Another key to understanding the drop in the unemployment rate is the use of part-time work, which concerns 19% of Danish employees. For the working population, the benefit system has been maintained (80% of their monthly salary for five years). However, since 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 now has one of the highest employment rates in the European Union: 75.6 per cent of women and 80.6 per cent of men with only 4.8 per cent unemployment in 2019.
Until the beginning of 2020, all was well. But as for many countries, the Covid-19 health crisis has disrupted this dynamic. To cope with this, the Danish government quickly took unprecedented economic measures: wage compensation (short-time working), assumption of fixed costs, deferral of VAT, 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 (aid packages). In total, these aid plans amount to approximately DKK 400 billion (€53.6 billion), of which a little over DKK 100 billion (€13.4 billion) is direct aid, or 5% of GDP.
What about the Faroe Islands?
Politically, the Faroe Islands became an autonomous territory in 1948 after having been under Danish rule since 1388. The capital is Tórshavn. The unicameral parliament, the Løgting, has jurisdiction over all powers except defence. At its head is a Prime Minister, the Løgmaður or "person of law", Aksel V. Johannesen since 2015. He works with 33 members of the government elected by universal suffrage for four years. Each year, the islands receive large grants from Denmark. As a self-governing territory, they are part of the Nordic Council, but their special status means they are neither recognized as an independent nation by the United Nations nor as a member of the European Union. However, they have their own flag and their own language, Faroese, although Danish must be taught.
A question that often comes up in the political expectations of its inhabitants: total independence. A dilemma comes back to punctuate the hesitations of the independentists: the economic aspect. The local economy is essentially based on fishing, which accounts for about 97% of exports (mainly herring and mackerel) and half of the GDP. In addition, there is oil extraction - since the summer of 2012, the Norwegian company Statoil has obtained concessions to explore in the east of the archipelago - and tourism, which is on the rise before the health crisis of 2020 (+13% in 2019).
The establishment of new hotels and an appearance in the latest James Bond film have turned the spotlight on the North Atlantic! Despite successive crises, unemployment reached only 2.2% of the working population in 2017. Nevertheless, this low unemployment rate must be tempered. It is more related to the massive exodus of young people, particularly to Denmark, than to 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).
