The most southerly country in Scandinavia, Denmark occupies the Jutland (Jylland) peninsula, the islands of Sjælland, Fyn, Lolland, and Falster, and more than 400 smaller islands. Its terrain is among the flattest in the world. The Faeroe Islands and Greenland in the North Atlantic are self-governing associated territories. Politically, Denmark is stable, despite a preponderance of minority governments since 1945. It possesses a long liberal tradition and was one of the first countries to establish a welfare system, in the 1930s.

Danish society is homogeneous, but the small population of foreign citizens doubled over 1984–1999, and the current right-wing government has pledged to curb immigration. The most visible minority groups are the Inuit, Greenland's indigenous inhabitants, and the Turkish community. Rising unemployment has engendered some ethnic tension, although racially motivated attacks are still rare.

Denmark has undergone profound social changes over the last 20 years, and the role of women has been transformed. Helped by Denmark's extensive social and educational provision, three-quarters of women now work in part-time or full-time jobs. Denmark provides the best state child support in Europe: almost half of children under two, and two-thirds of three- to six-year-olds, are in day nurseries.

Less than half the population lives in a nuclear family, in part reflecting the high divorce rate. Marriage is becoming less common; almost 40% of children are brought up by unmarried couples or single parents. Cohabiting couples now have the same legal rights as those who are married. In 1990, Denmark became the first country to allow registered partnerships between homosexual couples, effectively granting them the same legal status as heterosexual couples.

Strengths

Low inflation and unemployment. Buoyant GDP growth in 1990s (average 3% per annum). Substantial balance-of-payments surplus. Gas and oil reserves. Strong high-tech, high-profit manufacturing sector. Skilled workforce.

Weaknesses

Heavy tax burden. Weakening competitiveness and growing current-account deficit. Strong krone harms exports. Frequent minority governments.

Profile

Denmark's mix of a large state sector and a private sector has been successful. GDP per capita is one of the highest among the OECD countries.

In the 1980s the government stabilized the exchange rate and tightened budget controls in order to reduce inflation and reverse the balance-of-payments deficit. Growth slowed in the early 1990s, but an economic upturn since 1993 was first led by private consumption and then buoyed by increased exports and business investment. In November 2001 the Liberal government promised to fund increased welfare spending and lower taxation by extending privatization and reducing development aid.

Voters have refused to accept EU monetary union, a "no" vote in the referendum on introducing the euro in September 2000 reinforcing this stance. However, Denmark does meet the EU's economic convergence criteria for monetary union, the krone being pegged to the euro, and economic policies follow those of the participating states.

Denmark is a constitutional monarchy and a multiparty democracy. The associated territories of Greenland and the Faeroe Islands have home rule. The latter are divided over the issue of independence.

Profile

Denmark's intricate proportional electoral system ensures that parliament truly reflects voters' wishes, but also tends to lead to minority governments. SD governments were predominant until 1982. A decade of Conservative–Liberal rule followed. From 1993, the SD headed a center-left coalition under Poul Nyrup Rasmussen. The pendulum swung back with a victory in 2001 for the Liberals and Anders Fogh Rasmussen. Tax and immigration are important issues but major policy differences between the two main political groups are few.

Main Political Issues

Relations with the EU

In recent years, Denmark's left-of-center parties have been suspicious of further EU integration. In 1992 ratification of the Maastricht Treaty, approved by parliament, was rejected in a referendum, voters objecting to monetary union, a common defense force, and local election voting rights for European citizens living in Denmark. Later that year an EU summit allowed Denmark to opt out of monetary union, defense, and European citizenship. A referendum in 1993 finally approved the Treaty. Voters also approved the Amsterdam Treaty (successor to the Maastricht Treaty) in 1998, but in September 2000 a referendum on joining the euro (which Denmark had already decided not to introduce from its outset in 1999) produced a highly significant, and unexpected, "no" decision.

Immigration

Despite Danish liberal traditions, the position and integration into society of immigrants and refugees, who account for only 5% of the population, is a controversial issue. The election of a right-wing government in 2001 signaled a change to an overtly restrictive policy and a greater emphasis on integration for those immigrants already there. The ruling coalition relies for support on the far-right, anti-immigrant Danish People's Party, which had almost doubled its representation. Legislation passed in 2002 prevents the foreign (non-EU) spouse of a Danish citizen entering the country.

Despite expansion of North Sea oil and gas output, Denmark is still an overall importer of energy. Agriculture is highly efficient, and Denmark is the world's biggest exporter of pork.

Denmark was one of the first countries to introduce a state social welfare system. The national health service, which still provides free treatment for almost everything, is the main reason for Denmark's high taxes – in 2000 almost a quarter of government spending was allocated to social services. Any attempts to reduce expenditure will meet with strong opposition. Repeated surveys show that most Danes prefer their system to those based on private health insurance. In the early 1980s, Denmark had the highest incidence of AIDS in Europe, but after peaking in 1993, it has dropped markedly, due to the free availability of drug therapy.

The educational level is generally high, in part reflecting the need for a skilled workforce. Formal schooling begins at age seven and is mandatory for nine years. However, most children receive preschool education, and over 90% of pupils go on at the age of 16 to further academic or vocational training. Traditional folk high schools offer a wide range of further education options, but no professional qualifications.

Most Danes are comfortably off. Income distribution is more even than in many Western countries and social mobility is high. Free higher education means that access to the professions is more a question of ability than wealth or connections. Denmark is one of the world's most egalitarian societies. The generous social security system means that Danes suffer little from social deprivation. The SD government of 1994–2001 has created more kindergarten places and increased time off for those with young children. Refugees and recent immigrants tend to be the most disadvantaged members of Danish society.

Founded in the 10th century, Denmark is Europe's oldest monarchy. It was the dominant Baltic power until the 17th century, when it was eclipsed by Sweden.

• 1815 Denmark forced to cede Norway to Swedish rule.
• 1849 First democratic constitution.
• 1864 Denmark forced to cede provinces of Schleswig and Holstein after losing war with Prussia.
• 1914–1918 Denmark neutral in World War I.
• 1915 Universal adult suffrage introduced. Rise of SD.
• 1920 Northern Schleswig votes to return to Danish rule.
• 1929 First full SD government takes power under Thorvald Stauning.
• 1930s Implementation of advanced social welfare legislation and other liberal reforms under SD.
• 1939 Outbreak of World War II; Denmark reaffirms neutrality.
• 1940 Nazi occupation. National coalition government formed.
• 1943 Danish Resistance successes lead Nazis to take full control.
• 1944 Iceland declares independence from Denmark.
• 1945 Denmark recognizes Icelandic independence. After defeat of Nazi Germany, SD leads postwar coalition governments.
• 1948 Faeroes granted home rule.
• 1952 Founder member of Nordic Council.
• 1953 Constitution reformed; single-chamber, proportionally elected parliament created.
• 1959 Denmark joins EFTA.
• 1973 Denmark joins European Communities.
• 1979 Greenland granted home rule.
• 1975–1982 SD's Anker Jorgensen heads series of coalitions; elections in 1977, 1979, and 1981. Final coalition collapses over economic policy differences.
• 1982 Poul Schlüter first Conservative prime minister since 1894.
• 1992 Referendum rejects Maastricht Treaty on European Union.
• 1993 Schlüter resigns over "Tamilgate" scandal. Center-left government led by Poul Nyrup Rasmussen. Danish voters ratify revised Maastricht Treaty.
• 1994, 1998 General elections: Rasmussen heads SD-led minority coalition.
• 2000 Referendum rejects joining euro single currency.
• 2001 Elections; Liberals return to power. Anders Fogh Rasmussen appointed Prime Minister.