Denmark - History - Political upheaval, economic crisis and renewed growth Since 1973

Denmark
6. History
6.18 Political Upheaval, Economic Crisis and Renewed Growth, 1973-98

[Main menu] - [Previous paragraph] - [Next paragraph]

Since 1973, Denmark's economy and foreign policy have been steadily internationalised. Foreign aid has gradually increased, both bilaterally and via the UN, and Denmark continues to contribute peace-keeping troops, e.g. those that were sent to Bosnia, Kosovo and Eritrea/Ethiopia in 2001. Despite wide-spread support for the country's membership of NATO there was, for a number of years, strong disagreement concerning the actual implementation of the strategy of the alliance. A majority supported the 1977-1978 idea of a nuclear-free Nordic zone. Nato's "two-track decision" of 1979 meant that new missile systems would be deployed in Europe unless the Warsaw Pact and NATO agreed to limit this type of weapon. The results of this decision were sceptically received by the Danish public and caused a controversy which raged between 1982 and 1988. In what has become known as the policy of footnotes, a so-called alternative majority, supported by a strong popular peace movement, repeatedly instructed the government to put forward reservations against NATO decisions. During the second half of the 1980s, the gap was narrowed. This was partly due to the fact that the Social Liberals, who had been part of the footnote majority, were co-opted into the government in 1988, and partly due to the détente and the collapse of the Communist regimes in eastern and central Europe.

The relationship with the EC, from 1993 the EU, has been a bone of contention ever since 1972. Despite a solid majority in the Folketing for continuous membership and further integration, the public has been split into two almost equal halves in all five referenda held on this subject. The referendum on the single European market in 1986 produced a majority of just over 56%, but the Maastricht Treaty was rejected on 2 June 1992 by 50.7% no votes. The parties for and against thereafter agreed on a "national compromise", which allowed Denmark certain opt-out clauses in the Edinburgh Agreement. As a result, the Treaty was accepted by a new referendum on 18 May 1993 by 56.8% of the votes. In 1998 the Amsterdam Treaty was accepted by referendum, but in a referendum held in 2000, a majority voted against Denmark’s participation in the third phase of the Economic and Monetary Union (EMU) adopting the Single European Currency, the euro.

The 1970s were a turbulent decade in domestic politics. The landslide election of 1973 completely changed the party-political structure. The support for the four old parties fell from around 90% to approximately 58%, and many new parties entered parliament, the most important being the Progress Party and the Centre Democrats, who with around 16% and 8% of the votes respectively attracted a quarter of the voters. The Progress Party, led by Mogens Glistrup, represented a revolt against the welfare state, particularly the increases in taxation and the growth of the public sector. Politics were now characterised by frequent elections, complex coalitions and narrow parliamentary bases for the governments. The Liberals, led by Poul Hartling, governed between 1973 and 1975 with only 22 seats in the Folketing. Until 1982, the Social Democrats formed minority governments led by Anker Jørgensen, 1978-1979 in coalition with the Liberals. Politics during the 1970s were also coloured by a wide range of social movements which sought to influence political decisions in areas such as the environment, nuclear energy and "green" politics. The women's movement was, without doubt, the most influential of these.

The international economic crisis took hold in Denmark in 1974 and created huge problems for successive governments throughout the next decade. Stagnant economic growth and unemployment were accompanied by high inflation, which the government sought to counter by pursuing an income policy and a number of other measures. By 1982, the Social Democrats had exhausted all possibilities for further deals with the Opposition to combat the crisis, and a right-wing coalition consisting of the Conservative People's Party, the Liberals, the Centre Democrats and the Christian People's Party seized the power under the leadership of the Conservative Poul Schlüter.

Schlüter led a number of successive non-Socialist governments until 1993 and became the longest-reigning Prime Minister since Stauning. In 1988, the four-party government was replaced by a "trio" consisting of the Conservative People's Party, the Liberals and the Social Liberals, and in 1990 the coalition was reduced to just the Conservatives and the Liberals. Even though the non-Socialist coalition governments suffered losses at every single election, they achieved significant results in a number of areas, not least through co-operation with the Social Democrats. A vigorous anti-inflationary economic policy was introduced which abolished automatic indexation, reduced public spending and raised the cost of consumer credit. Competitiveness was enhanced, the currency was strengthened and more than 200,000 new jobs were created. Even so, unemployment continued to rise, as did foreign debt and the tax burden. Inflation was brought under control, however, and from the end of the 1980s a number of factors contributed to an improvement of the Danish economy. The international economic situation changed for the better, the balance of trade was improved and the Danish foreign debt was gradually reduced, partly because the country had become almost completely self-sufficient with respect to energy as a result of North Sea oil and gas.

In the middle of this period of economic growth, the right-wing government unexpectedly had to resign in January 1993. Their downfall was caused by the Minister of Justice Erik Ninn-Hansen's violation of the Aliens Act (known as the Tamil affair), a case which was subsequently tried and became the first Danish impeachment in 80 years. Poul Schlüter's successor was the Social Democrat Poul Nyrup Rasmussen. He first led a four-party coalition of Social Democrats, Social Liberals, Centre Democrats and representatives of the Christian People's Party; the Christian People's Party lost their seats at the election in September 1994, but Nyrup Rasmussen continued as Prime Minister in a three-party coalition of Social Democrats, Social Liberals and Centre Democrats. In 1996 the Centre Democrats withdrew from the government. The improved trading climate strengthened the Danish economy and made possible a fall in unemployment. But at the same time international competition and European integration restricted the options open to the government and parliament. In the general election of March 1998 the Conservatives suffered a serious setback, partly due to a leadership battle in the party. The Danish People's Party and the Centre Democrats emerged stronger. The Christian People's Party was again represented in the Folketing. Just after the election the Liberal leader, Uffe Ellemann Jensen, and the Conservative leader, Per Stig Møller, resigned. They were replaced by Anders Fogh Rasmussen and Pia Christmas-Møller, but in 1999 Pia Christmas-Møller was replaced by Bendt Bendtsen. Poul Nyrup Rasmussen was able to carry on a recontructed coalition government consisting of the Social Democrats and the Social Liberal Party.

For a number of years attitudes and policies towards immigrants and refugees have been in the forefront of public debate and in 1998 the Aliens Act was tightened considerably. A more salient theme for the politically aware has been the principles and forms by which the welfare society is to be maintained and developed in changing international conditions.

In the light of the terrorist attacks on the World Trade Center and the Pentagon on 11 September 2001, Denmark’s international obligations and role featured prominently in the public debate. However, when Poul Nyrup Rasmussen called a general election for 20 November 2001, these problems were overshadowed by Denmark’s policies on immigration, and the election campaign centred on refugees and Danes with another ethnic background than Danish. The government was subject to immense pressure from not only The Danish People’s Party but also The Liberal Party and The Conservative People’s Party. All parties declared their unreserved support for the protection and expansion of the welfare state, but despite this agreement on the goal, large differences remained as to the measures to be taken to reach this goal. The election resulted in the most spectacular change in the political balance of power since 1973. All left-wing parties, and the Social Democratic Party in particular, experienced a violent decline. The Centre Democrats lost all their seats in the Folketing, while the Liberal Party and The Danish People’s Party noted a solid increase their the number of seats. The Liberal Party became Denmark’s largest political party, and with parliamentary support from the Danish People’s Party, Liberal leader Anders Fogh Rasmussen formed a government consisting of the Liberal Party and the Conservative People’s Party. The Conservatives Bendt Bendtsen and Per Stig Møller became, respectively, Minister for Economic and Business Affairs and Minister for Foreign Affairs. Liberal Bertel Haarder became Minister for European Affairs and Minister for Refugee, Immigration and Integration Affairs, thus assuming the responsibility of continuing to strengthen the immigration and asylum policy and intensifying integration measures. In order to keep its election promises of tax stop and of strengthening the main areas of concern of the welfare state, the government reduced public expenses in other areas, such as development assistance and environmental protection.

Lorenz Rerup, Niels Finn Christiansen

[Top of document] - [Main menu] - [Previous] - [Next]