Background Notes: Denmark

PA/PC Source: Office of Public Communication, Bureau of Public Affairs Date: Jun 15, 19906/15/90 Category: Country Data Region: Europe Country: Denmark Subject: Travel, History, International Organizations, Trade/Economics [TEXT] Official Name: Kingdom of Denmark

PROFILE

Geography*
Area: 43,076 sq. km. (16,632 sq. mi.); slightly smaller than Vermont and New Hampshire combined. Cities: Capital-Copenhagen (pop. 1.4 million in Greater Copenhagen). Other cities-Aarhus (195,000), Odense (137,000), Aalborg (114,000). Terrain: Low and flat or slightly rolling; highest elevation is 173 m. (568 ft.). Climate: Temperate. The terrain, location, and prevailing westerly winds make the weather changeable.
People
Nationality: Noun-Dane(s). Adjective-Danish. Population (1988): 5.13 million.* Annual growth rate (1987): 0.8%. Density: 119 per sq. km. (308/sq. mi.). Ethnic groups: Scandinavian, Eskimo, Faroese, German. Religion: Evangelical Lutheran (about 97%). Languages: Danish, Faroese, Greenlandic (an Eskimo dialect), some German. English is the predominant second language. Education: Years compulsory-9. Attendance-100%. Literacy-99%. Health: Infant mortality rate (within first year, 1986)-8.2/1,000. Life expectancy-men 71.5 yrs., women 77.5 yrs. Work force (1987): 2.8 million: Agriculture and fisheries-5.6%. Industry and commerce-50.5%. Services-11.6%. Government-29.8%. Other-2.5%.
Government
Type: Constitutional monarchy. Constitution: June 5, 1953. Branches: Executive-queen (chief of state), prime minister (head of government), cabinet. Legislative-unicameral parliament (Folketing). Judicial-appointed Supreme Court. Political parties (represented in the Folketing): Social Democratic, Conservative, Liberal, Progress, Socialist People's, Radical Liberal, Center Democratic, Christian People's. Suffrage: Universal adult. Administrative subdivisions: 14 counties. Defense (1989): Approximately 2% of GDP. Flag: A white cross on a red field. The Faroe Islands and Greenland maintain separate flags under their respective home-rule governments.
Economy
GDP (1989): $104.6 billion. Annual growth rate (1989): 1.1%. Per capita income: $20,385. Avg. inflation rate last 5 yrs.: 4.4%. Agriculture (and related production, 5.8% of GDP): Products-meat, dairy products, fish. Industry (19.3% of GDP): Types-industrial and construction equipment, electronics, chemicals, pharmaceuticals, furniture, textiles. Natural resources: North Sea-oil and gas, fish. Greenland-fish, zinc, lead, iron ore, coal, molybdenum, cryolite, uranium. The Faroe Islands-fish. Trade (1989): Exports-$28 billion: machinery and instruments (24%), meat and meat products (10%), chemical, medical and pharmaceutical products (10%), fish and fish products (6%), transport equipment (including ships) (5%), textiles and apparel (4%), and furniture (4%). Imports- $26.6 billion: machinery (10%), iron, steel, and metals (10%),transport equipment (excluding ships) (7%), crude oils and petroleum products (5%), paper and paperboard (4%), and fish and fish products (3%). Partners- FRG 20%, Sweden 12%, UK 10%, US 6%, Eastern bloc 3%. Official exchange rate (April 1990): 6.44 kroner=US$ (1989 average 7.31 kroner=US$1 used for conversion of statistics).
Membership in International Organizations
UN and many of its specialized and related agencies, including the World Bank, International Monetary Fund (IMF); General Agreement on Tariffs and Trade (GATT); NATO; European Community (EC); Organization for Economic Cooperation and Development (OECD); Council of Europe; Nordic Council. *Excluding Greenland and the Faroe Islands.

PEOPLE AND HISTORY

The Danes, a homogenous Gothic-Germanic people, have inhabited Denmark since prehistoric times. Danish is the principal language. A small German-speaking minority lives in southern Jutland; a mixed Inuit-Danish population inhabits Greenland; and the Faroe Islands have a Nordic population with its own language. Education is compulsory from ages 7 to 16 and is free through the university level. The Evangelical Lutheran Church is state supported and accounts for about 97% of Denmark's religious affiliation. Denmark has religious freedom, however, and several other Protestant denominations and other religions exist. During the Viking period (9th-11th centuries), Denmark was a great power based on the Jutland Peninsula, the Island of Zealand, and the southern part of what is now Sweden. In the early 11th century, King Canute united Denmark and England for almost 30 years. Viking raids brought Denmark into contact with Christianity, and in the 12th century, crown and church influence increased. By the late 13th century, royal power had waned, and the nobility forced the king to grant a charter, considered Denmark's first constitution. Although the struggle between crown and nobility continued into the 14th century, Queen Margrethe I succeeded in uniting Denmark, Norway, Sweden, Finland, the Faroe Islands, Iceland, and Greenland under the Danish crown. Sweden and Finland left the union in 1520; however, Norway remained until 1814. Iceland, in a "personal union" under the king of Denmark after 1918, became independent in 1944. The Reformation was introduced in Denmark in 1536. Denmark's provinces in today's southwestern Sweden were lost in 1658, and Norway was transferred from the Danish to the Swedish crown in 1814, following the defeat of Napoleon, with whom Denmark was allied. The Danish liberal movement gained momentum in the 1830s, and in 1849 Denmark became a constitutional monarchy. After the war with Prussia and Austria in 1864, Denmark was forced to cede Schleswig-Holstein to Prussia and adopt a policy of neutrality. Toward the end of the 19th century, Denmark inaugurated important social and labor market reforms, laying the basis for the present welfare state. Denmark remained neutral during World War I. Despite its declaration of neutrality at the beginning of World War II, it was invaded by the Germans in 1940 and occupied until it was liberated by the Allied forces in May 1945. Denmark became a charter member of the United Nations and was one of the original signers of the North Atlantic Treaty.
Cultural Achievements
Denmark's rich intellectual heritage contributes to the cultural achievements of the modern world. The astronomical discoveries of Tycho Brahe (1546-1601) and the brilliant contributions to atomic physics of Niels Bohr (1885-1962) indicate the range of Danish scientific achievement. The fairy tales of Hans Christian Andersen (1805-75), the philosophical essays of Soren Kierkegaard (1813-55), and the short stories of Karen Blixen (penname Isak Dinesen, 1885-1962) have earned international recognition, as have the symphonies of Carl Nielsen (1865-1931). Danish applied art and industrial design have won awards for excellence. The name of Georg Jensen (1866-1935) is known worldwide for outstanding modern design in silver, and "Royal Copenhagen" is among the finest porcelains. Visitors to Denmark will discover a wealth of cultural activity. The Royal Danish Ballet, an exceptional company, specializes in the work of the great Danish choreographer August Bournonville (1805-79). Danes have distinguished themselves as jazz musicians, and the Copenhagen Jazz Festival has acquired an international reputation. International collections of modern art enjoy unusually attractive settings at the Louisiana Museum north of Copenhagen and at the North Jutland Art Museum in Aalborg. The State Museum of Art and the Glyptotek, both in Copenhagen, contain treasures of Danish and international art. The Museum of Applied Art and Industrial Design in Copenhagen exhibits the best in Danish design. The Royal Danish Porcelain Factory and Bing ∧ Grondahl, renowned for the quality of their porcelain and ceramics, export their products worldwide. Ceramic designs by Bjorn Wiinblad also are well known and popular. Among today's Danish writers, probably the most prolific is Klaus Rifbjerg-poet, novelist, playwright, and screenwriter. Benny Andersen writes poems, short stories, and music. Poems by both writers have been translated into English by the Curbstone Press. Kirsten Thorup's Baby, winner of the 1980 Pegasus Prize, is printed in English by the University of Louisiana Press. The psychological thrillers of Anders Bodelsen also appear in English. Suzanne Brogger and Vita Andersen focus largely on the changing roles of women in society. In music, Hans Abrahamsen and Per Norgaard are the two most famous living composers. Hans Abrahamsen's works have been performed by the National Symphony Orchestra in Washington, DC.
Cultural Policy
The Ministry of Cultural Affairs was created in 1961. Cultural life and meaningful leisure time were then and remain subjects of debate by politicians and parliament as well as the general public. The democratization of cultural life promoted by the government's 1960s cultural policy recently has come to terms with the older "genteel culture;" broader concepts of culture now generally accepted include amateur and professional cultural, media, sports, and leisure-time activities. Denmark's cultural policy is characterized by decentralized funding, program responsibility, and institutions. Danish cultural direction differs from other countries with a Ministry of Culture and a stated policy in that special laws govern each cultural field-e.g., the New Theater Act of 1970 and the Music Law of 1976. The Ministry of Cultural Affairs includes among its responsibilities international cultural relations; training of librarians and architects; copyright legislation; and subsidies to archives, libraries, museums, literature, music, arts and crafts, theater, and film production. During 1970-82, the ministry also recognized protest movements and street manifestations as cultural events, because social change was viewed as an important goal of Danish cultural policy. However, the current government exercises caution in moderating this policy and practice. In June 1988, radio and broadcasting, formerly under the Ministry of Culture, was transferred to the Ministry of Transportation and Communication. Government contributions to culture have increased steadily in recent years, but viewed against the present government's firm objective to limit public expenditures, contributions will stabilize in the future. Municipal and county governments assume a relatively large share of the costs for cultural activities in their respective districts. In 1987, government expenditures for culture reached about $265 million, or about $52 per capita. Most support went to libraries and archives, theater, museums, arts and crafts training, and films.

GOVERNMENT

Denmark is a constitutional monarchy. Queen Margrethe II has largely ceremonial functions; probably her most significant formal power lies in her right to appoint the prime minister and cabinet ministers, who are responsible for administration of the government. However, she must consult with parliamentary leaders to determine the public's will, since the cabinet may be dismissed by a vote of no confidence in the Folketing (parliament). Cabinet members are occasionally recruited from outside the Folketing. The 1953 constitution established a unicameral Folketing of not more than 179 members, of whom 2 are elected from the Faroe Islands and 2 from Greenland. Elections are held at least every 4 years, but the prime minister can dissolve the Folketing at any time and call for new elections. Folketing members are elected by a complicated system of proportional representation; any party receiving at least 2% of the total national vote receives representation. The result is a multiplicity of parties (eight currently in parliament), none of which holds a majority. More than 85% of electorate participation is normal. The judicial branch consists of about 100 local courts, 2 high courts, several special courts (e.g., arbitration and maritime), and a supreme court of 15 judges appointed by the crown on the government's recommendation. Denmark is divided into 14 counties (Amter) and 272 municipalities (Kommuner). The chief official of the Amt, the county mayor (Amtsborgmester), is elected by the county council from among its members, according to the municipal reform of 1970. The city of Copenhagen represents a single Kommune. The Faroe Islands and Greenland enjoy home rule, with the Danish Government represented locally by high commissioners. These home-rule governments are responsible for most domestic affairs with foreign relations, monetary affairs, and defense falling to the Danish Government.
Principal Government Officials
Monarch-Queen Margrethe II Prime Minister-Poul Schlueter Ministers Finance-Henning Dyremose Foreign Affairs-Uffe Ellemann-Jensen Economic Affairs-Niels Helveg Petersen Internal Revenue-Anders Fogh Rasmussen Ministry of Transportation and Communication-Knud Oostergaard Industry-Anne Birgitte Lundholt Labor-Knud E. Kirkegaard Interior/Nordic Affairs-Thor Pedersen Social Affairs-Aase Olesen Agriculture-Laurits Toernaes Fisheries-Kent Kirk Justice-Hans Engell Defense-Knud Enggaard Cultural Affairs-Ole Vig Jensen Environmental Affairs-Lone Dybkjaer Housing-Agnete Lausten Energy-Jens Bilgrav Nielsen Education-Bertel Haarder Ambassador to the United States-Peter Dyvig Ambassador to the United Nations-Kjeld Wilhelm Mortensen Denmark maintains an embassy at 3200 Whitehaven Street NW, Washington, DC 20008 (tel. 202-234-4300). Consulates general are in Chicago, Los Angeles, and New York.

POLITICAL CONDITIONS

Political life in Denmark is orderly and democratic. Political changes occur gradually, through a process of consensus, and political methods and attitudes are generally moderate. The Social Democratic Party, Denmark's largest and closely identified with a large well-organized labor movement, has held power either alone or in coalition for most of the postwar period. A coalition of the Social Democratic and three other centrist parties broke down in the fall of 1981 because of the parties' inability to decide on an economic program. Despite electoral losses, the Social Democrats formed a single-party minority government after December 1981 elections. Unable to pass austerity measures aimed at alleviating the seriously deteriorating economy, the government chose to resign in September 1982. Its successor was composed of four center-right parties-Conservative, Liberal, Center Democratic, and Christian People's-that controlled only 78 of the 179 seats in the Folketing. This coalition of parties retained power in the January 1984 and September 1987 elections. Snap elections called in May 1988 brought a nonsocialist minority coalition government to power. The current government is composed of three parties: Conservative, Liberal, and Radical Liberal. This coalition represents a minority of 67 seats in the 179-seat parliament, but it can count on support on most issues from the Center Democratic, Christian People's, and the Progress Parties, which have a total of 29 seats, plus three North Atlantic members. The successive minority governments under the current prime minister have been successful in passing their economic programs through the Folketing. However, with 55 seats, the Social Democrats play a powerful braking role on both the domestic and international agendas of the Schlueter government. The coalition remains dependent on whether the prime minister's rivals wish to mount a challenge or remain content to wait for the next elections, due in 1992.

ECONOMY

For several decades, the Danish economy has been characterized by industrial expansion and diversification as well as a continued dependence on foreign trade, which accounts for more than 50% of gross domestic product. Agricultural products dominated export earnings until the 1930s, accounting for almost 75% of total exports. Since then , however, agricultural exports have declined. In the postwar period, manufacturing, assisted by Marshall Plan funds (totaling about $250 million in current dollars), significantly improved its export performance. Today, more than 60% of exports stem from manufactured products, and the agricultural share has dropped to less than 30%. During the 1962-72 period, GDP increased at an average annual rate of 4.5%, but the oil shocks of 1973 and 1979 reduced average annual growth to 2% in 1972-82. Assisted by the improved international economic situation, the growth rate picked up again after 1982, and the average rate for 1982-86 was 3.5%. This strong growth ended in 1987. Since then, slowed growth was due to a decrease in private consumption accompanying the introduction in 1986 of fiscal restraint measures and of waning business confidence. As a result, business investment dropped 9% in 1987 and another percent in 1988. The economy saw a recovery in 1989 when the GDP rose 1%, led entirely by increased exports. Projections for 1990 point toward an almost 2% increase in GDP assisted by a continued strong export performance, a recovery in business investment, and a small increase in private consumption. Despite the recovery in the economy, major economic and structural problems remain to be solved, particularly with respect to its high taxes, the lack of geographic and sectoral labor market mobility, and the huge foreign debt.
Budget
From the end of the Second World War to 1973, central government budgets showed surpluses. From 1974, however, the budget dropped deeply into deficit, reaching a level of more than 10% of GDP in 1983. The center-right government that took office in late 1982 managed to balance the budget in 1986 and actually created a surplus in 1987. However, budget deficits now approach 3% of GDP.
Prices, Interest, and Exchange Rates
At its inauguration in October 1982, the government stated, as one of the cornerstones of its anti-inflationary program, that inflation and wage increases should be reduced below international rates, primarily through use of wage restraints and a stable exchange rate policy. Today, the annual increase in consumer prices has been more than halved to about 5% in 1989. For 1990, the projected increase is about 3%. Despite fluctuations in international exchange rates versus Danish kroner, not least with the US dollar, the kroner in late 1989 on a trade-weighted basis had the same value as in 1982. Between October 1989 and May 1990, however, the kroner strengthened by almost 8%. Employment Since the late 1950s, unemployment declined steadily to between 2% and 3% (regarded as full employment). That situation prevailed until the first oil shock in 1973. Unemployment then increased from 2.1% in 1974 to 5.1% in 1975 and to 10.8% in 1983 primarily due to the influx of women into the labor pool. Although the number of persons employed in the public sector increased from 368,000 in 1967 to 678,000 in 1977, this could not counter cyclical downturns in overall employment. Unemployment declined to 8% of the total labor force in 1987 but has since picked up, because of the labor market's inability to absorb new entrants. In 1989, the unemployment rate was 9.2%. It is likely to remain at this level in 1990.
Balance of Payments and Trade
The Danish balance of payments has been in deficit every year since the early 1960s. In 1985, the deficit set an all-time record of $5.1 billion, or more than 4.5% of GDP. The deficit was reduced to about $1.4 billion in 1989. Recent years' large deficits stem almost entirely from the servicing of Denmark's foreign debt which, by the end of 1989, had risen to $40 billion, or almost 40% of GDP. In 1989, the United States ranked fourth among Denmark's trading partners, accounting for more than 6% of total Danish trade. Major US exports to Denmark are machinery and equipment, aircraft, military equipment, and coal. Major Danish exports to the United States are machinery and equipment, agricultural products (mostly canned ham and pork), chemicals, pharmaceuticals, and fish.
Energy
Except for some oil and gas in the North Sea, Denmark has only limited mineral resources and must import most of its fuels and raw materials. The country has no nuclear power plants, and indigenous oil and natural gas production from the North Sea in 1989 covered almost half of total Danish energy consumption, or more than 80% of oil and gas consumption. Danish crude-oil production in 1989 totaled 5.5 million tons, and natural gas production reached about 3 billion cubic meters. By 1990, Danish hydrocarbon production is expected to cover more than half of total Danish energy use. Until 1981, the Danish shipping conglomerate A.P. Moller held the sole concession for oil and gas exploration and exploitation on Danish territory, for which it formed a consortium (Danish Underground Consortium) with Shell, Gulf, Chevron, and Texaco (Gulf withdrew in 1975 and Chevron in 1986). After pressure from the government, A.P. Moller agreed to relinquish half of the unexplored area in 1982 and the remainder in 1984 and 1986. The government offered part of the relinquished areas to new concessionaires in three licensing rounds in 1983, 1985, and 1989, when a total of 37 licenses were granted, covering an area of about 6,700 square miles, or less than 15% of the total Danish concession area. Seven US companies participated in licenses granted in the 1983 round, three in the 1985, and four in the 1989 round. In the wake of the first oil crisis in 1973, Danish power plants shifted rapidly from oil to coal; currently, the ratio is 97% coal and 3% oil. Following the Danish ban on trade with South Africa, coal sales from the United States to Denmark have now stabilized at about 3 million tons annually. Although Danish energy policy throughout the 1970s and the early 1980s focused on energy savings, it is now concentrating on environmental protection.
Greenland and the Faroe Islands
In Greenland, zinc and lead mining had been carried out for some years under difficult arctic conditions by the Canadian-owned Greenex A/S at the Black Angel Mine in Marmorilik, West Greenland. The mine's resources are now fully exploited, and it will close in 1990. Oil and gas exploration by the US company ARCO on the east coast of Greenland was given up in early 1990 as negotiations on more lenient concession terms for ARCO failed. Fishing remains the principal Greenlandic industry. In general, Greenlanders have a lower level of income than mainland Danes. The Faroe Islands depend almost entirely on fisheries and related exports; the United States is among the leading importers of Faroese products.
European Community (EC)
Denmark joined the EC on January 1, 1973, on the basis of a positive referendum vote at that time. A second referendum was held in 1986 on the issue of proposed amendments to the Treaty of Rome intended to improve the functioning of EC institutions and to prepare for the creation of the EC single market by the end of 1992. Fifty-six percent voted in favor of the changes, 44% against. The vote reflects the Danish population's interest both in continued membership in the Community, from which especially Danish agriculture benefits heavily, and in maintaining the integrity and preeminence of Danish political and social institutions. Although Denmark is proceeding well in implementing the new EC '92 Single Market Plan directives, it has major problems in adapting its taxes and excise taxes to the much lower EC levels due to its excessively large public sector.

FOREIGN RELATIONS

Danish foreign policy is founded upon four cornerstones: the United Nations, the North Atlantic Treaty Organization (NATO), Nordic cooperation, and the EC. Denmark emphasizes its relations with developing countries and is one of the few nations to exceed the UN goal of contributing 1% of GNP to development assistance. Danish development assistance in 1987 totaled 0.84% of GNP, and the government's goal is to reach 1% by 1992. Danish security policy is founded on its membership in NATO. In his opening address to the parliament on October 4, 1988, the prime minister stated that future emphasis will be on the promotion of Danish views toward disarmament and toward the achievement of agreements on chemical weapons, conventional security in Europe, and on a nuclear test ban. As a member of the Nordic Council, Denmark has strong economic, political, social, and cultural ties with other Nordic countries-Iceland, Norway, Finland, and Sweden. As the only Nordic country in the EC, its role as a bridge between the two regions recently has become much more important, particularly with the sharp increase in Nordic business investments in Denmark in order to exploit the opportunities of the EC '92 Single Market Plan.

DEFENSE

Denmark was a charter signatory of the North Atlantic Treaty, and Danish security continues to be based on membership in NATO. Since the late 1960s, the Folketing has adopted a series of multiyear defense programs. Public opposition to increases in defense spending, during a period when economic constraints require reduced spending for social welfare, has created differences among the political parties regarding a broadly acceptable level of new defense expenditures. A defense agreement reached in 1989 dealt with defense funding and military reorganization during 1989-91. Denmark has maintained a system of indexation, which retroactively compensates for wage and price increases in the programed defense expenditures. The Danish defense budget will remain at inflation-indexed zero growth for at least the next 2 years. In FY 1989, defense spending represented about 2% of GDP and about 6.9% of the central government budget.

US-DANISH RELATIONS

US relations with Denmark, a longstanding European ally, are friendly and close. In the NATO context, the Danish defense effort is important to the United States. About 225 US firms have offices, affiliates, or subsidiaries in Copenhagen. Although there is no American Chamber of Commerce, the American Club there attracts members both from the American business community and Danes interested in trade and close ties with the United States. Some 400,000 US tourists visit Denmark annually. Principal US Officials Ambassador-Keith L. Brown Deputy Chief of Mission-Ronald D. Flack Economic Counselor-Dennis A. Sandberg Political Counselor-Ward C. Thompson Consul-Robert L. Fretz Administrative Officer-Richard H. Smyth Public Affairs Counselor (USIS)-Mary Ellen Connell Agricultural Counselor-Anthony Cruit Commercial Attache-Stephan Helgesen Defense and Naval Attache-Capt. Michael C. Tiernan, USN Army Attache-Col. Lionel Ingram, Air Attache-Col. John Long Chief, Office of Defense Cooperation-Col. Carl Lyday

TRAVEL NOTES

The US Embassy is located at Dag Hammarskjolds Alle 24, 2100 Copenhagen O, Denmark (tel. 31/42-31-44). Customs: No immunizations are required, and US tourists do not need visas for stays of less than 90 days. Climate and clothing: Winters are warmer and summers cooler than in New England. Woolen clothes are worn most of the year. Transportation: Direct flights are available between Copenhagen and several major US cities, and many international carriers serve Copenhagen's Kastrup International Airport. Rail and air services link major European centers. Rail service leaves daily for London, Paris, and Scandinavian capitals. Ferries connect Denmark with Oslo, Stockholm, Helsinki, and points in the UK and FRG. Copenhagen's bus, suburban train, and taxi services are excellent, and rates are reasonable. Telecommunications: Local telephone service is good. Worldwide telephone and telegraph service is available. Copenhagen is six time zones ahead of eastern standard time. Tourist attractions: Tivoli is one of Copenhagen's famous tourist attractions but is only open during the summer. In downtown Copenhagen, the Rosenborg Castle exhibits the Danish crown jewels. Not far from Copenhagen are Kronborg Castle in Elsinore, Frederiksborg Castle in Hillerod, Fredensborg Castle in Esrum Lake, the Open Air Museum in Sorgenfri, and the cathedral and Viking ship museum in Roskilde. Hans Christian Andersen's childhood home in Odense has been turned into a museum. The town of Dragoer, close to Copenhagen, as well as the towns of Ribe and Mogeltonder in southern Jutland, and the islands of Fano, Aero, Samso, and Bornholm offer glimpses of Danish village and rural life. Copenhagen has many good, though expensive, hotels. Book in advance for the April-October season.
Further Information
For information on economic trends, commercial development, production, trade regulations, and tariff rates, contact the International Trade Administration, US Department of Commerce, Washington, DC 20230. Published by the United States Department of State -- Bureau of Public Affairs -- Office of Public Communication -- Washington, DC -- June 1990 -- Editor: Peter Knecht Department of State Publication 8298 -- Background Notes Series -- This material is in the public domain and may be reprinted without permission; citation of this source is appreciated. For sale by the Superintendent of Documents, US Government Printing Office, Washington, DC 20402.(###)