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Denmark Economy

Denmark Economy
Photo by myhsu

Denmark is an advanced industrial country, a standard of living with the social guarantees of its population being one of the highest in the world.

This is due to the state of the economy, which in comparison with those of other countries is in a rather good condition. In fact, Danish economy is considered one of the freest economies in the world, positioned in the 11th place 2012 Index with the score of 76.2.

Being a member of the Scandinavian region, Denmark shares the status of a corruption-free state. This advantage plays a key role in protecting property rights.

In economy the private sector prevails, but the state makes considerable impact by means of monetary and credit, financial and a tax policy, granting money to agriculture.

The state owns many municipal enterprises and the most part of air and a railway transportation. Dominant positions in economy of Denmark in the second half of the 20th century were won by sphere of services. The basic branches, which incorporate wide-spread private services, are banking, insurance and finance, tourism, transport and trade.

Euro Zone
Photo by Images_of_Money

Among the enumerated spheres banking is particularly set under control.

The sphere is based on sensible regulations and procedures, which in the most part are responsible for a stable monetary system. Denmark has been a typical European country almost in everything, except for the currency.

Together with other 12 countries, it didn’t enter the Euro Zone, preserving krone as the official currency. Despite this, krone stays closely bound with Euro because of strong trade relations with Europe.

Further on, Denmark is open for business and investments, encouraging entrepreneurial activity for the rest of the globe.

In 90s Denmark had various industrious branches, which didn’t occupy an ascendant position in economy. The structure of the industry of Denmark used to be based on its agricultural production, on oil and gas stocks in the North Sea, on resources of limestone and on a wide spectrum of imported raw materials.

The important factor is the presence of the qualified labor. As of 2003, the unemployment rate was 6.1%, which as an incredibly good indicator. Moreover, the employment rate is 75%, which is undoubtedly the highest in Europe.

Danish industry
Photo by danishwindindustryassociation

Having the limited stocks of hydraulic power and brown coal, to 1980 Denmark has been compelled to import almost all energy carriers. In 1966 in the Danish sector of the North Sea stocks of oil and the natural gas the operation of which began in 1972 have been found out.

The agriculture of Denmark specializes in animal industries; a considerable part of production of plant growing is used on forage by an animal.

As a whole the agriculture role in Denmark decreases. Fishing, which also used to be crucial for the Danish economy, gradually lost its role but didn’t give up completely. Even today Denmark has a significant commercial shipping fleet.

As a country bearing a true Viking-heritage, Denmark preserved its shipbuilding industrial branch.

In addition to this, the economy stands on manufacturing of metals like iron and steel, textiles, machinery, technologies, chemicals, medicine, and so on. Its main exports are food and electricity.

Despite this, Denmark keeps ecology and environment as a key point in its policy. Copenhagen is one of the few European urban capitals to be regarded as an eco-friendly city.

Economy in Denmark
Photo by danishwindindustryassociation

Denmark currently implements an EU-style trade policy and has trade relations with almost every country. Leading foreign trade partners of Denmark in 1995 were Germany, Sweden, Great Britain, the Netherlands and Norway. Among them the countries entering into European Economic Community cover 68,8 % of the foreign trade turnover, and the USA – apprx. 4 %.

The Danish regulatory environment is in much better condition than in a number of European countries. It takes less time and efforts to start a business in Denmark than in rest of Europe.

Although this country displays the highest percentage of taxes, the government provides a big number of social programs in return. These programs are pretty much responsible for the high life quality of Danes. Danish VAT is the highest in Europe – 25%.

The overall advantages of Danish economy have drawn many immigrants to the country. At some point it was a bothering problem for the government. Former prime minister Rasmussen dealt with the issue by imposing strict laws and regulations on immigrants.

These regulations considerably decreased the immigrant flow, but where later promised to be weakened by the new Danish prime minister Helle Thorning-Schmidt.

Windmills
Photo by danishwindindustryassociation

In general, Danish economy continues to preserve stability, which makes Denmark one of the most desired countries for immigrants. The country keeps its market open for foreign investments and trade, but maintains the key industrial branches as well. Although the Danish state budget reduces the amount of money for agriculture, it is still an efficient and productive sphere.

One of the most astonishing peculiarities of this country is its small size and the use of its advantages and opportunities. The contrast between the size and the potential and development Denmark displays is a proof of clever governing and market managing.

In times of post-war technological revolution Denmark was one of the first countries to change the target of the economy from agriculture to technologies.

Some of the most popular Danish brands are LEGO, Pandora, Royal Danish Cigars, and many other companies that prove their excellent long lasting quality and timeless style.

Quick Facts

  • Main branches of economy – agriculture, technologies, trade
  • Official currency – Danish Kroner (DKK)
  • Charts – 11th place in 2012 Index
  • The highest in the world – living standard, VAT tax
  • Trade partners – Germany, Sweden, Great Britain, the Netherlands, Norway, etc.
  • Peculiarities of the economy – stable monetary system, foreign trade relations, open for investments
  • Unemployment rate – 6.1% (as of 2003)
  • Employment rate – 75% (as of 2003)
  • Main exports – food, electricity, technology, furniture, etc.
  • Former prime minister – Anders Fogh Rasmussen
  • Current prime minister – Helle Thorning-Schmidt
  • Famous Danish companies – LEGO, Pandora, Royal Danish Cigars, etc.
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