Denmark: country overview

This thoroughly modern market economy features a high-tech agricultural sector, state-of-the-art industry with world-leading firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a member of the EU; Danish legislation and regulations conform to EU standards on almost all issues.

Year of EU entry: 1973

Member of Schengen area:Yes

Political system: Constitutional monarchy

Capital city: Copenhagen

Total area: 43 094 km²

Population: 5.5 million

Currency: Danish krone

Listen to the official EU language:  Danish

Country overview

Denmark consists of the peninsula of Jutland (Jylland) and some 400 named islands. Of these, 82 are inhabited, the largest being Funen (Fyn) and Zealand (Sjælland).

Denmark has a large fishing industry, and possesses a merchant fleet of considerable size. The manufacturing sector's main areas of activity include food products, chemicals, machinery, metal products, electronic and transport equipment, beer and paper and wood products. Tourism is also an important economic activity.

Denmark is a constitutional monarchy, ruled today under the 1953 constitution. The single-chamber parliament or Folketing has 179 elected members.

Economy overview

Danes enjoy among the highest standards of living in the world and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. Denmark is a net exporter of food and energy and enjoys a comfortable balance of payments surplus but depends on imports of raw materials for the manufacturing sector. Within the EU, Denmark is among the strongest supporters of trade liberalization. After a long consumption-driven upswing, Denmark's economy began slowing in 2007 with the end of a housing boom. Housing prices dropped markedly in 2008-09 and, following a short respite in 2010, continued to decline in 2011 though at a slower pace. The global financial crisis has exacerbated this cyclical slowdown through increased borrowing costs and lower export demand, consumer confidence, and investment. The global financial crises cut Danish real GDP by 0.8% in 2008 and 5.8% in 2009. Denmark made a modest recovery in 2010 with real GDP growth of 1.3%, in part because of increased government spending; however, the country experienced a technical recession in late 2010-early 2011. Historically low levels of unemployment rose sharply with the recession and have remained at about 6% in 2010-11, based on the national measure, about two-thirds average EU unemployment. An impending decline in the ratio of workers to retirees will be a major long-term issue. Denmark maintained a healthy budget surplus for many years up to 2008, but the budget balance swung into deficit in 2009. In spite of the deficits, the new coalition government plans to deliver a modest stimulus to the economy in 2012. Nonetheless, Denmark's fiscal position remains among the strongest in the EU at 46.5% of GDP in 2011. Despite previously meeting the criteria to join the European Economic and Monetary Union (EMU), so far Denmark has decided not to join, although the Danish krone remains pegged to the euro. Denmark held the EU presidency during the first half of 2012; priorities included promoting a responsible, dynamic, green, and safe Europe, while working to steer Europe out of its euro zone economic crisis.

Useful links

The Commission's Representation in Denmark

European Parliament office in Denmark

Danish Government

Tourist information

Source: European Commission, CIA - The World Factbook