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Country Commercial Guides FY 2000: Denmark Report prepared by U.S. Embassy Copenhagen, released July 1999 Note*

III. POLITICAL ENVIRONMENT

Nature of the Bilateral Relationship with the United States: Bilateral relations are excellent. NATO, the keystone of the American national security relationship with Denmark, is popular in Denmark, perhaps more so than in any other country in Europe. An overwhelming number of Danes favor Danish membership of NATO, and the Danes are also adamant that progress toward European integration should not come at the expense of transatlantic ties.

Major Political Issues Affecting the Business Climate: While political issues rarely affect the Danish business climate, the business sector opines that the Government's strong Krone policy and the series of environmental taxes imposed on business, pending introduction of similar taxes in Denmark's major competing countries, jeopardize Danish competitiveness. The business sector would also like to see a more flexible labor market and introduction of measures that increase the incentives of workers at minimum wage to work rather than seeking the relatively generous unemployment benefits. Brief Synopsis of Political System, Schedule for Elections, and Orientation of Major Political Parties: Denmark is a constitutional monarchy. The Parliament, known as the Folketing, is elected for a four-year term. Often elections are held before the four years are up, either because the Government is toppled in a vote of confidence, or because the Prime Minister calls an election (which he can do at any time) in an attempt to improve the government coalition's parliamentary position. Denmark has a history of minority governments. The last election was held March 11, 1998.

With a few amendments (the latest and most comprehensive in 1953), the Constitution dates from 1849, when the King renounced absolutism. Today Denmark is among the most politically stable democracies. The Queen nominally rules through the Prime Minister and his Cabinet. As the Prime Minister is accountable to the Folketing (Denmark's unicameral parliament), the Queen "chooses" him based on recommendations from the leaders of the political parties.

The Prime Minister works through cabinet ministers and their ministries. Cabinet ministers need not be members of Parliament, although all but three of the current 20 ministers are. Ministers have no political Deputy Ministers or Secretaries of State as in other parliamentary democracies. Rather, they have a Permanent Under Secretary (in some instances more than one), who is the highest-ranking civil servant within the ministry. There are practically no political appointees among the civil servants, who therefore remain unaffected by changes of government.

The parliament has 179 members, including two each from Greenland and the Faeroe Islands, which are autonomous parts of the Danish realm.

Judicial power rests solely with the courts, although the Monarch on rare occasions grants pardons.

In 1998, 10 political parties are represented in the Folketing. Four of the parties have a parliamentary history of 80 years or longer. Political parties play a much greater role in Danish politics than in the United States, for two major reasons. The first is the system of awarding seats on the basis of proportional representation. The second reason is the fact that Folketing members represent their party policy over their electorate. They do not have their own staffs (nor, for that matter, do parliamentary committees). As a result, Danish parliamentarians must rely on their parties for support and technical expertise on legislative issues. Party discipline, as a consequence, is very tight.

The Government that was re-elected in 1998 is a minority coalition composed of two parties: The Social Democrats, and the Radicals (Social Liberals). Together, these parties control 72 of the 179 seats in the Folketing.

The Social Democratic Party (SDP, with 63 seats), is the party of Prime Minister Poul Nyrup Rasmussen and the largest party in the Folketing. Founded in 1871, the left-of-center SDP has been in government for most of the post-WWII era except for the 1950-53, 1968-71, 1973-75 and the 1982-93 periods. The SDP traditionally has support from the Danish Confederation of Trade Unions (LO).

The two major non-socialist opposition parties are the Venstre Party (42 seats in the Folketing) and the Konservative People's Party (16 seats). Their platforms and political objectives very much resemble each other and have long formed a stable basis for cooperation. Venstre favors reducing government power and budgets more than the Konservatives and is also a stronger supporter of European integration.