Denmark Country Brief
Introduction/Overview
Denmark is the southern-most Scandinavian country and has two offshore territories, Faroe Islands and Greenland, which were granted self-rule in 1948 and 1979 respectively. Denmark covers an area of 43,000 sq km (excluding offshore territories) and has a population of 5.5 million, of whom around 1.6 million live in the capital of Copenhagen.
Denmark is a member of the EU. On trade policy, Denmark is among the most liberal in the EU and is supportive of comprehensive agricultural reform. Denmark also supports stringent environmental regulation at the EU level. Denmark is a key actor on international climate policy and will host the United Nations Climate Change Conference in Copenhagen from 30 November to 11 December 2009.
Denmark is an active NATO member and regards NATO as the pre-eminent security organisation in Europe.
On 5 April, Mr Lars Løkke Rasmussen became Prime Minister after former long-serving Prime Minister Anders Fogh Rasmussen resigned on 4 April following his appointment as NATO Secretary General — a position he took up on 1 August 2009.
Political Overview
The Kingdom of Denmark is a Constitutional Monarchy based on a 1953 Constitution. The reigning monarch, Queen Margrethe II, ascended to the throne in 1972. The heir to the throne, Crown Prince Frederik is married to Australian-born Crown Princess Mary.
Legislative powers are vested in a unicameral parliament (the Folketing). Its 179 members, including two each from the Faroe Islands and Greenland, are elected for four-year terms on the basis of proportional representation. There are eight parties in the Parliament. The last general election was held in November 2007.
Denmark is governed by a Liberal–Conservative coalition under the leadership of Prime Minister Rasmussen (leader of the Liberal Party), in partnership with the Danish People’s Party, New Alliance (Centrist Party) and one of the two MPs elected on the Faroe Islands. The Liberal Party was the most successful party in national elections held in 2007, winning 26.3 per cent of the vote. The opposition Social Democratic Party is led by Helle Thorning-Schmidt — the first woman to attain this position.
The home rule government in Greenland (formed in 2003) and the Faroese coalition government (formed after the January 2004 general election) continue to pressure the Danish Government on the issue of increased autonomy. It is the Danish Government's position that the Faroe Islands and Greenland are self-governing parts of the Kingdom of Denmark. In July 2005 legislation was passed by the Danish Government providing full statutory powers for the Government of Greenland and the Faroe Islands to conclude certain international agreements on behalf of the Kingdom of Denmark. The Danish Government passed the Greenland Self-Government Act in May 2009, which provides for the Greenland Government to gradually take over responsibility for 33 additional competencies. Denmark will retain competence for constitutional matters, currency and foreign and security policy.
Economic Overview
Denmark has experienced a downturn in its economy as the effects of the global economic crisis have begun to be felt. The International Monetary Fund (IMF) forecast in April 2009 that real GDP in Denmark would fall by 4 per cent in 2009 and rise by 0.4 per cent in 2010. The IMF expects inflation to reach 0.3 per cent in 2009 and zero in 2010. In August 2009, inflation was 1 per cent. The Danish Government announced that unemployment was 2.5 per cent of the labour force in February 2009. In August 2009, unemployment was 3.4 per cent and rising.
In September 2000, 53 per cent of Danish voters voted against joining the European Monetary Union (EMU) in a national referendum, despite strong political support in favour of joining from most of the major parties.
Bilateral Relationship
Australia and Denmark share a strong bilateral relationship based on cooperation on many issues in international fora, a strong commitment to global security, and people-to-people links established over two centuries of migration. The Australian Embassy in Copenhagen re-opened in 2000. The Danish Embassy in Canberra, closed since 2002, re-opened in September 2007. Denmark retains consulates in most state capital cities of Australia.
The 8,000 or so Danes who migrated to Australia after World War II form the basis of the strong people-to-people links and over 50,000 Australians claim Danish ancestry (2006 census figures). Australia’s profile in Denmark was boosted by the marriage in May 2004 of Australian-born Ms Mary Donaldson to Denmark’s Crown Prince Frederik.
Educational services are one of Australia’s most significant exports to Scandinavia. There are extensive bilateral education links between Australian and Danish tertiary institutions. A bilateral Working Holiday Maker Arrangement and a Social Security Agreement were signed in 2001. Denmark and Australia signed an Agreement on Avoidance of Double Taxation in 1981.
The Crown Prince and Princess officially visited Australia in March 2005 and privately in November–December 2006 and August–September 2008. Other recent visits from Danish officials include: Permanent Secretary of State for Foreign Affairs, Mr Ulrik Federspiel (May 2008); Minister for Taxation, Mr Kristian Jensen (September 2006); and Minister for Culture, Mr Brian Mikkelsen (March 2005).
The then Deputy Leader of the Opposition, the Hon Jenny Macklin, visited Denmark in April 2006. Other recent visits from Australian officials include: Tasmanian Minister for Tourism, the Arts and the Environment, Paula Wriedt MFA (April 2006); Australian Parliamentary Delegation led by the then The Speaker, the Hon David Hawker (October 2005); the then Senator Campbell, Minister for Heritage and the Environment (June 2005); the then Queensland Minister for Education and the Arts, the Hon Anna Bligh (May 2005).
Bilateral economic and trade relationship
Two-way trade between Australia and Denmark in 2008 was worth A$1.19 billion, ranking Denmark as our 37th largest trading partner. Australia’s merchandise exports to Denmark were valued at A$170 million in 2008 including alcoholic beverages and beef. Merchandise imports from Denmark were valued at A$1.02 billion in 2008 with the two principal items being meat, particularly beef, and medicaments (including veterinary).
Around 85 Danish companies have a presence in Australia including Vestas Wind Systems Denmark, one of the world's leading manufacturers of wind turbines. The Denmark-based global cleaning company ISS is, with its 22,000 employees, the second largest European company in Australia. Australian company MAp Airports – one of the world’s largest private airport owners and operators – has a 53.7 per cent stake in Copenhagen airport. The Danish Government, with a 39.2 per cent stake, is the only other major shareholder.
Export Opportunities
The current changes in the economic landscape offers opportunities for trade and investment as business and industry are re-focusing efforts to address new realities.
Sectors offering new opportunities in Scandinavia include Clean Energy, Financial Services and Performance Textiles. Denmark has a high adoption rate for new technology in general and there are also opportunities for the export of unique telecommunications and e-government technology.
Sixty per cent of Scandinavia's biotech/pharmaceutical industry is located in the Oresund region (Eastern Denmark and Southern Sweden). The sector offers Australian exporters opportunities in bioinformatics, nanotechnology, genomics, and in information and human resource management.
In the more traditional sectors Australian wine exports to Denmark continue to grow and Denmark is one of Australia's most important wine markets. Austrade works closely with Wine Australia to promote brands to this market. There are emerging opportunities for complementary products such as gourmet food.
Scandinavia is one of the top performing student recruitment regions in Europe for Australia. In 2007, the Danish Government passed a new law introducing an international scholarship making it more financially viable for Danish students to study overseas. The law took effect on 1 July 2008. The international scholarship will be available for international tertiary studies. There are also extensive bilateral education links between Australian and Danish tertiary institutions. An Austrade-Australia Education International (AEI) agreement is in place to support continued growth in this sector.
TradeWatch Contacts
If you would like more information on the trade and economic conditions in Denmark, please email the Department of Foreign Affairs and Trade: Tradewatch@dfat.gov.au
Last updated: 10 November 2009