The Danish Economy 2000

The Danish Economy 2000

This volume contains a summary of the analysis published in Danish in the annual Medium Term Economic Survey, Finansredegrelse 2000, April 2000. The purpose is to identify key policy challenges and achievements, and present the Government's medium term economic strategy.

Macro-economic policies are focused on maintaining sound public finances, continued high employment and low inflation, thus underpinning recent structural reforms in the labour market.

Through a sequence of reform initiatives, the functioning of labour markets has been improved, paving the way for a sustained reduction in unemployment. This has been achieved primarily through tighter rules regarding work availability and more effective targeting of active labour market programs. Hence, increasing income inequality has been avoided.

A key element in the medium term strategy continues to be maintaining a significant public sector surplus in order to reduce government debt in preparation for the increase in government expenditures driven by population ageing.

The strategy of fiscal consolidations also implies, that the Danish economy is well prepared for full EMU membership. Thus, there is plenty of room for automatic stabilisers to dampen economic downturns. Furthermore, discretionary fiscal policy has successfully contributed to reducing economic fluctuation during the last couple of decades.