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Denmark Case Essay

1394 words - 6 pages

The Economic System in Denmark

The Economic System in Denmark
The current controversies that have developed in the welfare state of Denmark have been a concern throughout the world. As political systems shift, there have been questions as to the rise of unemployment, the sustainability of the country due to strict immigration laws, and the increase of discrimination cases.
Having the responsibility to sustain the cost of its growing population through high taxes, while entering into a recession, the country had to “enhance adaptability” (Daemmrich & Kramarz 2010) and change the traditional method of assistances. Through the demographic shift of immigrants and refugees the political ...view middle of the document...

The government wanted to attract overseas employers, increase the backing of new firms, and support employee risk-taking.

(Flexicurity - Daemmrich & Kramarz 2010)
(Flexicurity - Daemmrich & Kramarz 2010)

The progress of this reform was seen in the mid-1990s as unemployment numbers decreased, the job market turnover increased. The job market turnover was 25% of the workforce changing positions annually, as the number of lost jobs amounted to 200K the number of created jobs amounted to 230K. This was an acceptable turnover as the programs and benefits offset the cyclic activity and resulted in a shorter time span for the unemployed. This also increased the availability of a highly trained, versatile employment pool, which attracted prospective employers.


In the past few decades Denmark has struggled to become an independent globalized body while maintaining a constitutional monarchy. They have walked a fine line between autonomy and full integration into the European Union (EU). The Edinburgh declaration was a response to the concerns voiced by Danes, and the European Council made provisions that would exclusively apply to Denmark, as regards to the third stage of European Monetary Union (EMU). These provisions would - “In accordance with the Protocol on certain provisions relating to Denmark, Denmark has given notification that it will not participate in the third stage of EMU. Accordingly, Denmark will not participate in the single currency” (Europa).
I believe that the Danish people should forge their own path and continue to withhold from the EU. They have managed to keep an independent monetary system, created new policies that ensure a positive employment pool in a cyclic environment, and have increased their economic growth through trading partners. They continue to oppose full integration into the EU, and most recently shown defiance on boarder controls. It is evident that they do not wish to fully integrate and continue to walk a fine line, but have not made the final decision. As they witness the economic hardships within other member states of the EU there is further evidence as to the opposition to pool their sovereignty in exchange for representation, as all eyes are on the current European debt crisis. Continuing to advocate for the preservation of currency, could be a way to gain ground for macroeconomic stabilization, as the number of supporters of the single currency are diminishing. Out of the 27 members 17 have adopted the single currency, while the struggle for economic growth continues. As the demographics of the global economy continue to change, there has been a better outlook for world trade and an increase of gross domestic product, as emerging economies continue to grow (Daemmrich & Kramarz 2010). This outlook could benefit the independence of Denmark.
The effects of increased globalization, coupled with lowering barriers for trade, and changing political systems,...

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