Economic challenges abound
Being outside the eurozone will make it harder for Denmark to build consensus.
Denmark could scarcely be taking over the presidency of the European Union’s Council of Ministers at a more vital time economically. However – like Hungary and Poland before it – Denmark has the tricky task of leading member states’ response to the eurozone crisis without being a member of the 17-nation currency union itself.
It is even more unusual in that it is currently one of only five left-led governments (excluding the outgoing Spanish administration) among the EU’s 27 member states. Amid all the talk of austerity and deficit reduction – enshrined in law in the ‘six-pack’ package of legislation which came into force on Tuesday (13 December) and the ‘fiscal compact’ agreed at the European Council on 8-9 December – the Danish government is already trying to strike a different tone.
Helle Thorning-Schmidt, the country’s prime minister, came to power in October on an avowedly pro-growth strategy. She promised to fix the economy, not through cuts in expenditure but by promoting new investment. She has already hinted that her government’s political slant might create friction during the next six months, being contrary to the current mainstream view in the EU. Although there is some room for manoeuvre in emphasising growth-enhancing policies, the Danes are unlikely to be able to change the course of current thinking to any great extent.
Thorning-Schmidt has already demonstrated that she is not shy of diverging from the EU majority view, risking the rancour of her EU counterparts and the European Commission by insisting that she did not yet have a mandate to negotiate a new treaty, saying that she would now have to consult the parliament over whether Denmark should sign up.
That, along with the mountain of financial legislation still to be approved, means that it will be an interesting six months.
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