Denmark as the rest of the Western Europe had enormous growth rates, up to 5 %, in years up to 1973 resulting in large welfare growth. However, the oil crisis and some failed economical and political reactions to it stopped the positive development; so during the 1970’s the inflation increased and deficits appeared both in public and the private balance of payment
After 1982 the new government with Poul Schluter in front stabilised the economy using tight cost control policy, salaried income policy, a firm currency policy in combination with liberalization and deregulation especially in the public service.
Precious labour market policy:
The cost was a recession lasting extra long due to bad market trends in Europe about 1990. The unemployment war record high in 1992, but has been decreasing since thanks to the governments’ led by first Nyrup Rasmussen and then Fogh Rasmussen effective but quite expensive labour market policy, known abroad as “flexicurity”.
The biggest trading partner of Denmark is Germany:
The economy of Denmark depends on the trade with foreign countries. That is why a continuous liberalisation of the markets is important to Denmark. 70 % of the trades take place inside the EU, where the biggest trading partner is Germany with 17 %.
Oil from North Sea:
One of the most important income sources of Denmark is the oil from the North Sea. The earlier times’ large export industries and agriculture have gradually been replaced by other industry exports with machines, equipment, instruments, chemical products and textile products as the most important industry branches. Service trade and trade with know-how continues growing and contributes positively to the Danish economy.
High competitive power in Denmark:
Despite the criticism of the high taxation, the Danish economy is placed high on the international rating lists. Especially the competitive power is on top. The largest problem of Denmark and the rest of Europe in upcoming years is the ageing population. Another economical difficulty Denmark will face in the future is depletion of the oil reserves in the North Sea.
Agriculture in Denmark:
From the middle Age and until recently, the majority of the population was occupied with agriculture, in 2004, only 68.000 or 2,4 % of the total labour force. A total of 175.000 or 9 % are employed in food derived industry. Despite the development, the production of agricultural products has been increasing in the last years due to economy of scales and effectiveness. Every year Denmark produces enough food to a population of 15 million people.
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