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Economy of Denmark

The economy of Denmark is a modern high-income and highly developed mixed economy. The economy of Denmark is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. The nominal gross national income per capita was the ninth-highest in the world at $68,827 in 2023.

Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally. The income distribution is relatively equal but inequality has somewhat increased during the last decades. In 2017, Denmark had the seventh-lowest Gini coefficient (a measure of economic inequality) of the then 28 European Union countries. With 5,932,654 inhabitants (1 January 2023), Denmark has the 38th largest national economy in the world measured by nominal gross domestic product (GDP), and the 52nd largest in the world measured by purchasing power parity (PPP). Among OECD nations, Denmark has a highly efficient and strong social security system; social expenditure stood at roughly 26.2% of GDP.

Denmark has a very long tradition of adhering to a fixed exchange-rate system and still does so today. It is unique among OECD countries to do so while maintaining an independent currency: The Danish krone, which is pegged to the euro. Though eligible to join the EU's Economic and Monetary Union (EMU), Danish voters in a referendum in 2000 rejected exchanging the krone for the euro. Whereas Denmark's neighbours like Norway, Sweden, Poland and the United Kingdom generally follow inflation targeting in their monetary policy, the priority of Denmark's central bank is to maintain exchange rate stability. Consequently, the central bank has no role in a domestic stabilization policy. Since February 2015, the central bank has maintained a negative interest rate to contain an upward exchange rate pressure.

In an international context, a relatively large proportion of the population is part of the labour force, in particular because the female participation rate is very high. In 2017, 78.8% of all 15-to-64-year-old people were active on the labour market, the sixth-highest number among all OECD countries. With a 4.8% unemployment rate, unemployment is relatively low, in comparison to other European countries where the average unemployment rate is 6.7%. The labour market is traditionally characterized by a high degree of union membership rates and collective agreement coverage. Denmark invests heavily in active labor market policies and the concept of flexicurity has been important historically.

Denmark is an example of the Nordic model, characterized by an internationally high tax level, and a correspondingly high level of government-provided services (e.g. health care, child care and education services). There are also income transfers to various groups, such as retirees, disabled people, the unemployed, and students. Altogether, the amount of revenue from taxes paid in 2017 amounted to 46.1% of GDP. The Danish fiscal policy is generally considered healthy. The net government debt is very close to zero, amounting to 1.3% of GDP in 2017. The Danish fiscal policy is characterized by a long-term outlook, taking into account likely future fiscal demands. During the 2000s, a challenge was perceived to government expenditures in future decades. It was ultimately a challenge to fiscal sustainability from demographic development, in particular higher longevity. Responding to this, age eligibility rules for receiving public age-related transfers were changed. Since 2012, calculations of future fiscal challenges, from both the government and independent analysts, have generally perceived Danish fiscal policy to be sustainable. In recent years, it was considered overly sustainable.

History
Denmark's long-term economic development has largely followed the same pattern as other Northwestern European countries. In most of recorded history Denmark has been an agricultural country with most of the population living on a subsistence level. Since the 19th century Denmark has gone through an intense technological and institutional development. The material standard of living has experienced formerly unknown rates of growth, and the country has been industrialized and later turned into a modern service society.

Almost all of the land area of Denmark is arable. Unlike most of its neighbours, Denmark has not had extractable deposits of minerals or fossil fuels, except for the deposits of oil and natural gas in the North Sea, which started playing an economic role only during the 1980s. On the other hand, Denmark has had a logistic advantage through its long coastal line and the fact that no point on Danish land is more than 50 kilometers from the sea – an important fact for the whole period before the industrial revolution when sea transport was cheaper than land transport. Consequently, foreign trade has always been very important for the economic development of Denmark.

Already during the Stone Age there was some foreign trade, and even though trade has made up only a very modest share of total Danish value added until the 19th century, it has been decisive for economic development, both in terms of procuring vital import goods (like metals) and because new knowledge and technological skills have often come to Denmark as a byproduct of goods exchange with other countries. The emerging trade implied specialization which created demand for means of payments, and the earliest known Danish coins date from the time of Svend Tveskæg around 995.

According to economic historian Angus Maddison, Denmark was the sixth-most prosperous country in the world around 1600. The population size relative to arable agricultural land was small so that the farmers were relatively affluent, and Denmark was geographically close to the most dynamic and economically leading European areas since the 16th century: the Netherlands, the northern parts of Germany, and Britain. Still, 80 to 85% of the population lived in small villages on a subsistence level.

Mercantilism was the leading economic doctrine during the 17th and 18th century in Denmark, leading to the establishment of monopolies like Asiatisk Kompagni, development of physical and financial infrastructure like the first Danish bank Kurantbanken in 1736 and the first "kreditforening" (a kind of building society) in 1797, and the acquisition of some minor Danish colonies like Tranquebar.

At the end of the 18th century major agricultural reforms took place that entailed decisive structural changes. However, the Napoleonic Wars caused Copenhagen to lose its status as an international centre of finance and trade. Politically, mercantilism was gradually replaced by liberal thoughts among the ruling elite. Following a monetary reform after the Napoleonic wars, the present Danish central bank Danmarks Nationalbank was founded in 1818.

There exists national accounting data for Denmark from 1820 onwards thanks to the pioneering work of Danish economic historian Svend Aage Hansen. They find that there has been a substantial and permanent, though fluctuating, economic growth all the time since 1820. The period 1822–94 saw on average an annual growth in factor incomes of 2% (0.9% per capita) From around 1830 the agricultural sector experienced a major boom lasting several decades, producing and exporting grains, not least to Britain after 1846 when British grain import duties were abolished. When grain production became less profitable in the second half of the century, the Danish farmers made an impressive and uniquely successful change from vegetarian to animal production leading to a new boom period. Parallelly industrialization took off in Denmark from the 1870s. At the turn of the century industry (including artisanry) fed almost 30% of the population.

During the 20th century agriculture slowly dwindled in importance relative to industry, but agricultural employment was only during the 1950s surpassed by industrial employment. The first half of the century was marked by the two world wars and the Great Depression during the 1930s. After World War II Denmark took part in the increasingly close international cooperation, joining OEEC/OECD, IMF, GATT/WTO, and from 1972 the European Economic Community, later European Union. Foreign trade increased heavily relative to GDP. The economic role of the public sector increased considerably, and the country was increasingly transformed from an industrial country to a country dominated by production of services. The years 1958–73 were an unprecedented high-growth period. The 1960s are the decade with the highest registered real per capita growth in GDP ever, i.e. 4.5% annually.

During the 1970s Denmark was plunged into a crisis, initiated by the 1973 oil crisis leading to the hitherto unknown phenomenon stagflation. For the next decades the Danish economy struggled with several major so-called "balance problems": High unemployment, current account deficits, inflation, and government debt. From the 1980s economic policies have increasingly been oriented towards a long-term perspective, and gradually a series of structural reforms have solved these problems. In 1994 active labour market policies were introduced that via a series of labour market reforms have helped reducing structural unemployment considerably. A series of tax reforms from 1987 onwards, reducing tax deductions on interest payments, and the increasing importance of compulsory labour market-based funded pensions from the 1990s have increased private savings rates considerably, consequently transforming secular current account deficits to secular surpluses. The announcement of a consistent and hence more credible fixed exchange rate in 1982 has helped reducing the inflation rate.

In the first decade of the 21st century new economic policy issues have emerged. A growing awareness that future demographic changes, in particular increasing longevity, could threaten fiscal sustainability, implying very large fiscal deficits in future decades, led to major political agreements in 2006 and 2011, both increasing the future eligibility age of receiving public age-related pensions. Mainly because of these changes, from 2012 onwards the Danish fiscal sustainability problem is generally considered to be solved. Instead, issues like decreasing productivity growth rates and increasing inequality in income distribution and consumption possibilities are prevalent in the public debate.

The global Great Recession during the late 2000s, the accompanying Euro area debt crisis and their repercussions marked the Danish economy for several years. Until 2017, unemployment rates have generally been considered to be above their structural level, implying a relatively stagnating economy from a business-cycle point of view. From 2017/18 this is no longer considered to be the case, and attention has been redirected to the need of avoiding a potential overheating situation.

In 2022 the popularity of Novo Nordisk's Ozempic and Wegovy for weight loss began greatly affecting the Danish economy. The pharmaceutical industry contributed two thirds of growth that year, and 1.7 points of the 1.9% year-over-year growth in the first quarter of 2023. Novo Nordisk's market capitalization—Europe's second-largest, after LVMH—exceeded the size of the entire national economy, and it is the largest payer of corporate taxes to the Danish state. Economists discussed whether the government needed to publish data including and excluding the company; as the enormous economic growth did not similarly increase employment, data including Novo Nordisk is misleading regarding the Danish business cycle. Some worried that the nation might become overdependent on the company, similar to what happened to the economy of Finland with Nokia, or that Novo Nordisk's success might cause Dutch disease.

Income, wealth and income distribution
Average per capita income is high in an international context. According to the World Bank, gross national income per capita was the tenth-highest in the world at $55,220 in 2017. Correcting for purchasing power, income was Int$52,390 or 16th-highest among the 187 countries.

During the last three decades household saving rates in Denmark have increased considerably. This is to a large extent caused by two major institutional changes: A series of tax reforms from 1987 to 2009 considerably reduced the effective subsidization of private debt implicit in the rules for tax deductions of household interest payments. Secondly, compulsory funded pension schemes became normal for most employees from the 1990s. Over the years, the wealth of the Danish pension funds have accumulated so that in 2016 it constituted twice the size of Denmark's GDP. The pension wealth consequently is a very important both for the life-cycle of a typical individual Danish household and for the national economy. A large part of the pension wealth is invested abroad, thus giving rise to a fair amount of foreign capital income. In 2015, average household assets were more than 600% of their disposable income, among OECD countries second only to the Netherlands. At the same time, average household gross debt was almost 300% of disposable income, which is also at the highest level in OECD. Household balance sheets are consequently very large in Denmark compared to most other countries. Danmarks Nationalbank, the Danish central bank, has attributed this to a well-developed financial system.

Income inequality
Income inequality has traditionally been low in Denmark. According to OECD figures, in 2000 Denmark had the lowest Gini coefficient of all countries. However, inequality has increased during the last decades. According to data from Statistics Denmark, the Gini coefficient for disposable income has increased from 22.1 in 1987 to 29.3 in 2017. The Danish Economic Council found in an analysis from 2016 that the increasing inequality in Denmark is due to several components: Pre-tax labour income is more unequally distributed today than before, capital income, which is generally less equally distributed than labour income, has increased as share of total income, and economic policy is less redistributive today, both because public income transfers play a smaller role today and because the tax system has become less progressive.

In international comparisons, Denmark has a relatively equal income distribution. According to the CIA World Factbook, Denmark had the twentieth-lowest Gini coefficient (29.0) of 158 countries in 2016. According to data from Eurostat, Denmark was the EU country with the seventh-lowest Gini coefficient in 2017. Slovakia, Slovenia, Czechia, Finland, Belgium and the Netherlands had a lower Gini coefficient for disposable income than Denmark.

Labour market and employment
The Danish labour market is characterized by a high degree of union membership rates and collective agreement coverage dating back from Septemberforliget (The September Settlement) in 1899 when the Danish Confederation of Trade Unions and the Confederation of Danish Employers recognized each other's right to organise and negotiate. The labour market is also traditionally characterized by a high degree of flexicurity, i.e. a combination of labour market flexibility and economic security for workers. The degree of flexibility is in part maintained through active labour market policies. Denmark first introduced active labour market policies (ALMPs) in the 1990s after an economic recession that resulted in high unemployment rates. Its labour market policies are decided through tripartite cooperation between employers, employees and the government. Denmark has one of the highest expenditures on ALMPs and in 2005, spent about 1.7% of its GDP on labour market policies. This was the highest amongst the OECD countries. Similarly, in 2010 Denmark was ranked number one amongst Nordic countries for expenditure on ALMPs.

Denmark's active labour market policies particularly focus on tackling youth unemployment. They have had a "youth initiative" or the Danish Youth Unemployment Programme in place since 1996. This includes mandatory activation for those unemployed under the age of 30. While unemployment benefits are provided, the policies are designed to motivate job-seeking. For example, unemployment benefits decrease by 50% after 6 months. This is combined with education, skill development and work training programs. For instance, the Building Bridge to Education program was started in 2014 to provide mentors and skill development classes to youth that are at risk of unemployment. Such active labour market policies have been successful for Denmark in the short-term and the long-term. For example, 80% of participants in the Building Bridge for Education program felt that "the initiative has helped them to move towards completing an education". On a more macro scale, a study of the impact of ALMPs in Denmark between 1995 and 2005 showed that such policies had positive impact not just on employment but also on earnings. The effective compensation rate for unemployed workers has been declining for the last decades, however. Unlike in most Western countries there is no legal minimum wage in Denmark.

A relatively large proportion of the population is active on the labour market, not least because of a very high female participation rate. The total participation rate for people aged 15 to 64 years was 78.8% in 2017. This was the 6th-highest number among OECD countries, only surpassed by Iceland, Switzerland, Sweden, New Zealand and the Netherlands. The average for all OECD countries together was 72.1%.

According to Eurostat, the unemployment rate was 5.7% in 2017. This places unemployment in Denmark somewhat below the EU average, which was 7.6%. 10 EU member countries had a lower unemployment rate than Denmark in 2017.

Altogether, total employment in 2017 amounted to 2,919,000 people according to Statistics Denmark.

The share of employees leaving jobs every year (for a new job, retirement or unemployment) in the private sector is around 30% – a level also observed in the U.K. and U.S.- but much higher than in continental Europe, where the corresponding figure is around 10%, and in Sweden. This attrition can be very costly, with new and old employees requiring half a year to return to old productivity levels, but with attrition bringing the number of people that have to be fired down.

Foreign trade
As a small open economy, Denmark is very dependent on its foreign trade. In 2017, the value of total exports of goods and services made up 55% of GDP, whereas the value of total imports amounted to 47% of GDP. Trade in goods made up slightly more than 60% of both exports and imports, and trade in services the remaining close to 40%.

Machinery, chemicals and related products like medicine and agricultural products were the largest groups of export goods in 2017. Service exports were dominated by freight sea transport services from the Danish merchant navy. Most of Denmark's most important trading partners are neighbouring countries. The five main importers of Danish goods and services in 2017 were Germany, Sweden, United Kingdom, United States and Norway. The five countries from which Denmark imported most goods and services in 2017 were Germany, Sweden, the Netherlands, China and United Kingdom.

After having almost consistently an external balance of payments current account deficit since the beginning of the 1960s, Denmark has maintained a surplus on its BOP current account for every year since 1990, with the single exception of 1998. In 2017, the current account surplus amounted to approximately 8% of GDP. Consequently, Denmark has changed from a net debtor to a net creditor country. By 1 July 2018, the net foreign wealth or net international investment position of Denmark was equal to 64.6% of GDP, Denmark thus having the largest net foreign wealth relative to GDP of any EU country.

As the annual current account is equal to the value of domestic saving minus total domestic investment, the change from a structural deficit to a structural surplus is due to changes in these two national account components. In particular, the Danish national saving rate in financial assets increased by 11 per cent of GDP from 1980 to 2015. Two main reasons for this large change in domestic saving behaviour were the growing importance of large-scale compulsory pension schemes and several Danish fiscal policy reforms during the period which considerably decreased tax deductions of household interest expense, thus reducing the tax subsidy to private debt.

Currency and monetary policy
The Danish currency is the Danish krone, subdivided into 100 øre. The krone and øre were introduced in 1875, replacing the former rigsdaler and skilling. Denmark has a very long tradition of maintaining a fixed exchange-rate system, dating back to the period of the gold standard during the time of the Scandinavian Monetary Union from 1873 to 1914. After the breakdown of the international Bretton Woods system in 1971, Denmark devalued the krone repeatedly during the 1970s and the start of the 1980s, effectively maintaining a policy of "fixed, but adjustable" exchange rates. Rising inflation led to Denmark declaring a more consistent fixed exchange-rate policy in 1982. At first, the krone was pegged to the European Currency Unit or ECU, from 1987 to the Deutsche Mark, and from 1999 to the euro.

Although eligible, Denmark chose not to join the European Monetary Union when it was founded. In 2000, the Danish government advocated Danish EMU membership and called a referendum to settle the issue. With a turn-out of 87.6%, 53% of the voters rejected Danish membership. Occasionally, the question of calling another referendum on the issue has been discussed, but since the Financial crisis of 2007–2008 opinion polls have shown a clear majority against Denmark joining the EMU, and the question is not high on the political agenda presently.

Maintenance of the fixed exchange rate is the responsibility of Danmarks Nationalbank, the Danish central bank. As a consequence of the exchange rate policy, the bank must always adjust its interest rates to ensure a stable exchange rate and consequently cannot at the same time conduct monetary policy to stabilize e.g. domestic inflation or unemployment rates. This makes the conduct of stabilization policy fundamentally different from the situation in Denmark's neighbouring countries like Norway, Sweden, Poland and the United Kingdom, in which the central banks have a central stabilizing role. Denmark is presently the only OECD member country maintaining an independent currency with a fixed exchange rate. Consequently, the Danish krone is the only currency in the European Exchange Rate Mechanism II (ERM II), before Bulgaria and Croatia joined in 2020 (the latter uses the euro since 2023)

In the first months of 2015, Denmark experienced the largest pressure against the fixed exchange rate for many years because of very large capital inflows, causing a tendency for the Danish krone to appreciate. Danmarks Nationalbank reacted in various ways, chiefly by lowering its interest rates to record low levels. On 6 February 2015 the certificates of deposit rate, one of the four official Danish central bank rates, was lowered to −0.75%. In January 2016 the rate was raised to −0.65%, at which level it has been maintained since then.

Inflation in Denmark as measured by the official consumer price index of Statistics Denmark was 1.1% in 2017. Inflation has generally been low and stable for the last decades. Whereas in 1980 annual inflation was more than 12%, in the period 2000–2017 the average inflation rate was 1.8%.

Overall organization
Since a local-government reform in 2007, the general government organization in Denmark is carried out on three administrative levels: central government, regions, and municipalities. Regions administer mainly health care services, whereas municipalities administer primary education and social services. Municipalities in principle independently levy income and property taxes, but the scope for total municipal taxation and expenditure is closely regulated by annual negotiations between the municipalities and the Finance Minister of Denmark. At the central government level, the Ministry of Finance carries out the coordinating role of conducting economic policy. In 2012, the Danish parliament passed a Budget Law (effective from January 2014) which governs the over-all fiscal framework, stating among other things that the structural deficit must never exceed 0.5% of GDP, and that Danish fiscal policy is required to be sustainable, i.e. have a non-negative fiscal sustainability indicator. The Budget Law also assigned the role of independent fiscal institution (IFI, informally known as "fiscal watchdog" ) to the already-existing independent advisory body of the Danish Economic Councils.

Budget and fiscal position
Danish fiscal policy is generally considered healthy. Government net debt was close to zero at the end of 2017, amounting to DKK 27.3 billion, or 1.3% of GDP. The government sector having a fair amount of financial assets as well as liabilities, government gross debt amounted to 36.1% of GDP at the same date. The gross EMU-debt as percentage of GDP was the sixth-lowest among all 28 EU member countries, only Estonia, Luxembourg, Bulgaria, the Czech Republic and Romania having a lower gross debt. Denmark had a government budget surplus of 1.1% of GDP in 2017.

Long-run annual fiscal projections from the Danish government as well as the independent Danish Economic Council, taking into account likely future fiscal developments caused by demographic developments etc. (e.g. a likely ageing of the population caused by a considerable expansion of life expectancy), consider the Danish fiscal policy to be overly sustainable in the long run. In Spring 2018, the so-called Fiscal Sustainability Indicator was calculated to be 1.2 (by the Danish government) respectively 0.9% (by the Danish Economic Council) of GDP. This implies that under the assumptions employed in the projections, fiscal policy could be permanently loosened (via more generous public expenditures and/or lower taxes) by c. 1% of GDP while still maintaining a stable government debt-to-GDP ratio in the long run.

Taxation
The tax level as well as the government expenditure level in Denmark ranks among the highest in the world, which is traditionally ascribed to the Nordic model of which Denmark is an example, including the welfare state principles which historically evolved during the 20th century. In 2022, the official Danish tax level amounted to 42.2% of GDP. The all-record highest Danish tax level was 49.8% of GDP, reached in 2014 because of high extraordinary one-time tax revenues caused by a reorganization of the Danish-funded pension system. The Danish tax-to-GDP-ratio of 42% was the seventh-highest among all OECD countries in 2022, after France, Norway, Austria, Finland, Italy and Belgium. The OECD average was 34%. The tax structure of Denmark (the relative weight of different taxes) also differs from the OECD average, as the Danish tax system in 2015 was characterized by substantially higher revenues from taxes on personal income, whereas on the other hand, no revenues at all derive from social security contributions. A lower proportion of revenues in Denmark derive from taxes on corporate income and gains and property taxes than in OECD generally, whereas the proportion deriving from payroll taxes, VAT, and other taxes on goods and services correspond to the OECD average.

In 2016, the average marginal tax rate on labour income for all Danish tax-payers was 38.9%. The average marginal tax on personal capital income was 30.7%.

Professor of Economics at Princeton University Henrik Kleven has suggested that three distinct policies in Denmark and its Scandinavian neighbours imply that the high tax rates cause only relatively small distortions to the economy:
 * widespread use of third-party information reporting for tax collection purposes (ensuring a low level of tax evasion)
 * broad tax bases (ensuring a low level of tax avoidance)
 * a strong subsidization of goods that are complementary to working (ensuring a high level of labour force participation).

in 2023, Denmark considered methods to increase taxes on energy dealers.

Government Expenditures
Parallel to the high tax level, government expenditures make up a large part of GDP, and the government sector carries out many different tasks. By September 2018, 831,000 people worked in the general government sector, corresponding to 29.9% of all employees. In 2017, total government expenditure amounted to 50.9% of GDP. Government consumption took up precisely 25% of GDP (e.g. education and health care expenditure), and government investment (infrastructure etc.) expenditure another 3.4% of GDP. Personal income transfers (for e.g. elderly or unemployed people) amounted to 16.8% of GDP.

Denmark has an unemployment insurance system called the A-kasse (arbejdsløshedskasse). This system requires a paying membership of a state-recognized unemployment fund. Most of these funds are managed by trade unions, and part of their expenses are financed through the tax system. Members of an A-kasse are not obliged to be members of a trade union. Not every Danish citizen or employee qualifies for a membership of an unemployment fund, and membership benefits will be terminated after 2 years of unemployment. A person that is not a member of an A-kasse cannot receive unemployment benefits. Unemployment funds do not pay benefits to sick members, who will be transferred to a municipal social support system instead. Denmark has a countrywide, but municipally administered social support system against poverty, securing that qualified citizens have a minimum living income. All Danish citizens above 18 years of age can apply for some financial support if they cannot support themselves or their family. Approval is not automatic, and the extent of this system has generally been diminished since the 1980s. Sick people can receive some financial support throughout the extent of their illness. Their ability to work will be re-evaluated by the municipality after 5 months of illness.

The welfare system related to the labor market has experienced several reforms and financial cuts since the late 1990s due to political agendas for increasing the labor supply. Several reforms of the rights of the unemployed have followed up, partially inspired by the Danish Economic Council. Halving the time unemployment benefits can be received from four to two years, and making it twice as hard to regain this right, was implemented in 2010 for example.

Disabled people can apply for permanent social pensions. The extent of the support depends on the ability to work, and people below 40 can not receive social pension unless they are deemed incapable of any kind of work.

Agriculture
Agriculture was once the most important industry in Denmark. Nowadays, it is of minor economic importance. In 2016, 62,000 people, or 2.5% of all employed people worked in agriculture and horticulture. Another 2,000 people worked in fishing. As value added per person is relatively low, the share of national value added is somewhat lower. Total gross value added in agriculture, forestry and fishing amounted to 1.6% of total output in Denmark (in 2017). Despite this, Denmark is still home to various types of agricultural production. Within animal husbandry, it includes dairy and beef cattle, pigs, poultry and fur animals (primarily mink) – all sectors that produce mainly for export. Regarding vegetable production, Denmark is a leading producer of grass-, clover- and horticultural seeds. The agriculture and food sector as a whole represented 25% of total Danish commodity exports in 2015.

63% of the land area of Denmark is used for agricultural production – the highest share in the world according to a report from University of Copenhagen in 2017. The Danish agricultural industry is historically characterized by freehold and family ownership, but due to structural development farms have become fewer and larger. In 2020 the number of farms was approximately 33,000, of which approximately 10,000 were owned by full-time farmers.

Animal production
The tendency toward fewer and larger farms has been accompanied by an increase in animal production, using fewer resources per produced unit.

The number of dairy farmers has reduced to about 3,800 with an average herd size of 150 cows. The milk quota is 1,142 tonnes. More than half of the cows live in new loose-housing systems. Export of dairy products accounts for more than 20 percent of the total Danish agricultural export. The total number of cattle in 2011 was approximately 1.5 million. Of these, 565,000 were dairy cows and 99,000 were suckler cows. The yearly number of slaughtering of beef cattle is around 550,000.

For more than 100 years the production of pigs and pig meat was a major source of income in Denmark. Approximately 90 percent of the production is exported. This accounts for almost half of all agricultural exports and for around 5 percent of Denmark's total exports. About 4,200 farmers produce 28 million pigs annually. Of these, 20.9 million are slaughtered in Denmark.

Fur animal production on an industrial scale started in the 1930s in Denmark. Prior to a government-mandated culling during the COVID-19 pandemic, Denmark was the world's largest producer of mink furs, with 1,400 mink farmers fostering 17.2 million mink and producing around 14 million furs of the highest quality every year (see mink industry in Denmark). Approximately 98 percent of the skins sold at Kopenhagen Fur Auction were exported. Fur ranked as Danish agriculture's third largest export article, at more than DKK 7 billion annually. The number of farms peaked in the late 1980s at more than 5,000 farms, but the number has declined steadily since, as individual farms grew in size. Danish mink farmers claim their business to be sustainable, feeding the mink food industry waste and using all parts of the dead animal as meat, bone meal and biofuel. Special attention is given to the welfare of the mink, and regular "Open Farm" arrangements are made for the general public. Mink thrive in, but are not a native to Denmark, and it is considered an invasive species. American Mink are now widespread in Denmark and continues to cause problems for the native wildlife, in particular waterfowl. Denmark also has a small production of fox, chinchilla and rabbit furs.

Two hundred professional producers are responsible for the Danish egg production, which was 66 million kg in 2011. Chickens for slaughter are often produced in units with 40,000 broilers. In 2012, 100 million chickens were slaughtered. In the minor productions of poultry, 13 million ducks, 1.4 million geese and 5.0 million turkeys were slaughtered in 2012.

Organic production
Organic farming and production has increased considerably and continuously in Denmark since 1987 when the first official regulations of this particular agricultural method came into effect. In 2017, the export of organic products reached DK 2.95 billion, a 153% increase from 2012 five years earlier, and a 21% increase from 2016. The import of organic products has always been higher than the exports though and reached DK 3.86 billion in 2017. After some years of stagnation, close to 10% of the cultivated land is now categorized as organically farmed, and 13.6% for the dairy industry, as of 2017.

Denmark has the highest retail consumption share for organic products in the world. In 2017, the share was at 13.3%, accounting for a total of DKK 12.1 billion.

Natural resource extraction
Denmark has large proven reserves of oil and natural gas in the North Sea with Esbjerg being the main city for the oil and gas industry. Denmark is the largest producer of oil and natural gas in the EU. Production has decreased in recent years, though. Whereas in 2006 output (measured as gross value added or GVA) in mining and quarrying industries made up more than 4% of Denmark's total GVA, in 2017 it amounted to 1.2%. The sector is very capital-intensive, so the share of employment is much lower: About 2,000 persons worked in the oil and gas extraction sector in 2016, and another 1,000 persons in extraction of gravel and stone, or in total about 0.1% of total employment in Denmark.

Engineering and high-tech
Denmark houses a number of significant engineering and high-technology firms, within the sectors of industrial equipment, aerospace, robotics, pharmaceutical and electronics.

Electronics and industrial equipment
Danfoss, headquartered in Nordborg, designs and manufactures industrial electronics, heating and cooling equipment, as well as drivetrains and power solutions.

Denmark is also a large exporter of pumps, with the company Grundfos holding 50% of the market share, manufacturing circulation pumps.

Manufacturing
In 2017 total output (gross value added) in manufacturing industries amounted to 14.4% of total output in Denmark. 325,000 people or a little less than 12% of all employed persons worked in manufacturing (including utilities, mining and quarrying) in 2016. Main sub-industries are manufacture of pharmaceuticals, machinery, and food products.

Service industry
In 2017 total output (gross value added) in service industries amounted to 75.2% of total output in Denmark, and 79.9% of all employed people worked here (in 2016). Apart from public administration, education and health services, main service sub-industries were trade and transport services, and business services.

Transport

Significant investment has been made in building road and rail links between Copenhagen and Malmö, Sweden (the Øresund Bridge), and between Zealand and Funen (the Great Belt Fixed Link). The Copenhagen Malmö Port was also formed between the two cities as the common port for the cities of both nations.

The main railway operator is Danske Statsbaner (Danish State Railways) for passenger services and DB Schenker Rail for freight trains. The railway tracks are maintained by Banedanmark. Copenhagen has a small Metro system, the Copenhagen Metro and the greater Copenhagen area has an extensive electrified suburban railway network, the S-train. Private vehicles are increasingly used as a means of transport. New cars are taxed by means of a registration tax (85% to 150%) and VAT (25%). The motorway network now covers 1,300 km.

Denmark is in a strong position in terms of integrating fluctuating and unpredictable energy sources such as wind power in the grid. It is this knowledge that Denmark now aims to exploit in the transport sector by focusing on intelligent battery systems (V2G) and plug-in vehicles.

Energy

Denmark has changed its energy consumption from 99% fossil fuels (92% oil (all imported) and 7% coal) and 1% biofuels in 1972 to 73% fossil fuels (37% oil (all domestic), 18% coal and 18% natural gas (all domestic)) and 27% renewables (largely biofuels) in 2015. The goal is a full independence of fossil fuels by 2050. This drastic change was initially inspired largely by the discovery of Danish oil and gas reserves in the North Sea in 1972 and the 1973 oil crisis. The course took a giant leap forward in 1984, when the Danish North Sea oil and gas fields, developed by native industry in close cooperation with the state, started major productions. In 1997, Denmark became self-sufficient with energy and the overall emission from the energy sector began to fall by 1996. Wind energy contribution to the total energy consumption has risen from 1% in 1997 to 5% in 2015.

Since 2000, Denmark has increased gross domestic product (GDP) and at the same time decreased energy consumption. Since 1972, the overall energy consumption has dropped by 6%, even though the GDP has doubled in the same period. Denmark had the 6th best energy security in the world in 2014. Denmark has had relatively high energy taxation to encourage careful use of energy since the oil crises in the 1970s, and Danish industry has adapted to this and gained a competitive edge. The so-called "green taxes" have been broadly criticised partly for being higher than in other countries, but also for being more of a tool for gathering government revenue than a method of promoting "greener" behaviour.

Denmark has low electricity costs (including costs for cleaner energy) in EU, but general taxes (11.7 billion DKK in 2015) make the electricity price for households the highest in Europe. , Denmark has no environment tax on electricity.

Denmark is a long-time leader in wind energy and a prominent exporter of Vestas and Siemens wind turbines, and in 2019 Denmark's exports of wind-turbine technology and services amounted to €8.9 billion. It has integrated fluctuating and less predictable energy sources such as wind power into the grid. Wind produced the equivalent of 43% of Denmark's total electricity consumption in 2017. The share of total energy production is smaller: In 2015, wind accounted for 5% of total Danish energy production.

Energinet.dk is the Danish national transmission system operator for electricity and natural gas. The electricity grids of western Denmark and eastern Denmark were not connected until 2010 when the 600MW Great Belt Power Link went into operation.

Cogeneration plants are the norm in Denmark, usually with district heating which serves 1.7 million households.

Waste-to-energy incinerators produce mostly heating and hot water. Vestforbrænding in Glostrup Municipality operates Denmark's largest incinerator, a cogeneration plant which supplies electricity to 80,000 households and heating equivalent to the consumption in 63,000 households (2016). Amager Bakke is an example of a new incinerator.

Greenland and the Faroe Islands
In addition to Denmark proper, the Kingdom of Denmark comprises two autonomous constituent countries in the North Atlantic Ocean: Greenland and the Faroe Islands. Both use the Danish krone as their currency, but form separate economies, having separate national accounts etc. Both countries receive an annual fiscal subsidy from Denmark which amounts to about 25% of Greenland's GDP and 11% of Faroese GDP. For both countries, fishing industry is a major economic activity.

Neither Greenland nor the Faroe Islands are members of the European Union. Greenland left the European Economic Community in 1986, and the Faroe Islands declined membership in 1973, when Denmark joined.

Data
The following table shows the main economic indicators in 1980–2023. Inflation under 2% is in green.

Major companies
Denmark has fostered and is home to many multi-national companies. Many of the largest are interdisciplinary with business – and sometimes research activities – in several fields. The most notable companies include:

 * Agribusiness
 * Arla Foods (dairy)
 * Dansk Landbrugs Grovvareselskab (DLG) (agricultural coop (Danish a.m.b.a.). Main focus is agricultural supply and trade)
 * Danish Crown (meat products)

 * Banking
 * Danske Bank (commercial banking and mortgage lending)
 * Nordea
 * Nykredit
 * Jyske Bank
 * Saxo Bank
 * Sydbank

 * Clothing and attire
 * ECCO (shoe and leather accessories manufacturer and retailer)
 * Bestseller

 * Construction
 * FLSmidth (global supplier of equipment and services to the cement and minerals industries)
 * Rockwool (mineral wool producer with production in 28 countries)
 * Velux (windows and skylights production, owned by Villum Foundation)
 * Rambøll
 * COWI

 * Energy technology
 * Vestas (wind turbines)
 * Siemens Wind Power (wind turbines)
 * Danfoss (climate and energy)
 * Grundfos (the world's largest pump manufacturer)
 * NKT Cables Group A/S (Power cables and subsea umbilicals, owner of subsidiary Nilfisk-Advance)
 * Ørsted (company) (Formerly known as DONG energy)

 * Electronics
 * Linak
 * Bang and Olufsen (hi-fi equipment)
 * Ortofon
 * Danfoss

 * Food and drink
 * Carlsberg (brewing company)
 * Daloon A/S (frozen food production in Denmark and England, mostly known for spring rolls)
 * Chr. Hansen (food ingredients and enzymes)
 * Danisco (enzymes, biotechnology and pharmaceutical supplier)

 * Medical equipment
 * Widex
 * William Demant

Many of the largest food producers are also engaged in biotechnology and research. Notable companies dedicated to the pharmaceutical and biotechnology sector, includes:
 * Pharmaceutical and biotechnology
 * H. Lundbeck
 * Novo Nordisk
 * LEO Pharma
 * Coloplast
 * Dansac (owner Hollister Inc)
 * Novozymes
 * Pharma Nord
 * Pharmacosmos
 * ALK-Abelló
 * Genmab
 * RosePharma
 * Santaris Pharma A/S
 * Veloxis Pharmaceuticals
 * Zealand Pharma

 * Retail
 * Salling Group (retail business)
 * Coop Danmark, (part of the multi-sector Coop amba, formerly known as FDB until 2013)

Software

 * Transport
 * DSV
 * A. P. Moller-Maersk Group (Maersk – conglomerate: shipping)
 * DFDS Seaways
 * USTC (conglomerate: shipping, trading)

 * Miscellaneous
 * ISS (facility services)
 * Danish Christmas Tree Growers Association representing Christmas tree production in Denmark
 * Lego (construction toys), as of 2014 the world's largest toy manufacturer by sales (1st half 2015:$2.1 billion (Mattel:$1.9 billion)).
 * Terma A/S, aerospace and defense

Cooperatives
Denmark has a long tradition for cooperative production and trade on a large scale. The most notable cooperative societies today includes the agricultural coop of Dansk Landbrugs Grovvareselskab (DLG), dairy producer Arla Foods and the retail cooperative Coop Danmark. Coop Danmark started out as "Fællesforeningen for Danmarks Brugsforeninger" (FDB) in 1896 and now has around 1.4 million members in Denmark as of 2017. It is part of the larger multi-sector cooperative Coop amba which has 1.7 million members in that same year.

The cooperative structure also extends to both the housing and banking sector. Arbejdernes Landsbank, founded in 1919, is the largest bank cooperative and it is currently the 6th largest bank in the country as of 2018. The municipality of Copenhagen alone holds a total of 153 housing cooperatives and "Arbejdernes Andelsboligforening Århus" (AAB Århus) is the largest individual housing cooperative in Denmark, with 23,000 homes in Aarhus.

Statistics
In 2022, the sector with the highest number of companies registered in Denmark is Finance, Insurance, and Real Estate with 204,853 companies followed by Services and Retail Trade with 204,050 and 30,563 companies respectively.

title: Economy of Denmark


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Transport in Denmark

Transport in Denmark is developed and modern. The motorway network covers 1,111 km while the railway network totals 2,667 km of operational track. The Great Belt Fixed Link (opened in 1997) connecting the islands of Zealand and Funen and the New Little Belt Bridge (opened in 1970) connecting Funen and Jutland greatly improved the traffic flow across the country on both motorways and rail. The two largest airports of Copenhagen and Billund provide a variety of domestic and international connections, while ferries provide services to the Faroe Islands, Greenland, Iceland, Germany, Sweden, and Norway, as well as domestic routes servicing most Danish islands.

Air
In 2011, a total of appr. 28 million passengers used Danish airports.

Copenhagen Airport is the largest airport in Scandinavia, handling approximately 29m passengers per year (2016). It is located at Kastrup, 8 km south-east of central Copenhagen. It is connected by train to Copenhagen Central Station and beyond as well as to Malmö and other towns in Sweden.

For the west of the country, the major airport is Billund (3m passengers in 2016) although both Aalborg (1.4m passengers in 2011) and Aarhus (591.000 passengers in 2011) have smaller airports with regular connections to Copenhagen.

List of airports
Denmark's main airports are:

 * Copenhagen Airport (CPH), Scandinavia's busiest passenger airport located at Kastrup to the south-east of Copenhagen city and handling over 29 million passengers a year.
 * Billund Airport (BLL), in central Jutland, one of Denmark's busiest cargo centres as well as a popular charter airline destination and an airport for regular flights serving 3 million passengers a year, mainly from the western part of the country.
 * Aalborg Airport (AAL), located 5 km northwest of Aalborg, is Denmark's third busiest airport serving around 1,4 million passengers a year in connections with 25 European destinations and one of Europes busiest domestic lines to Copenhagen.
 * Aarhus Airport (AAR), located 39 km northeast of Århus, serves some 540,000 passengers a year.

Other airports include:
 * Karup Airport (KRP) near Viborg in the west of Jutland, mainly serving Copenhagen with some 200,000 passengers a year.
 * Bornholm Airport (RNN) 5 km from the centre of Rønne in the southwest of the island of Bornholm, with several regular flights to Copenhagen a day.
 * Esbjerg Airport (EBJ), a small airport in the west of Jutland with regular flights to Aberdeen and Stavanger (although primarily serving North Sea Oilrigs).
 * Sønderborg Airport (SGD), in the very south of Jutland with connections to Copenhagen.
 * Roskilde Airport (RKE), 7 km southeast of Roskilde and some 38 km southwest of Copenhagen, serves mainly airtaxi and private business traffic.

Sea
Being an island state with a long coastline and always close to the sea, maritime transport has always been important in Denmark. From the primitive dugouts of the Stone Age to the complex designs of the Viking ships in the Viking Age, often built to exactly facilitate large scale cargo and passenger transportation. Denmark also engaged in the large scale cargo freights and slave transports of the European colonization endeavours in the Middle Ages and operated several smaller colonies of its own across the globe by the means of seafaring.

Today Denmark's ports handle some 48 million passengers and 109 million tonnes of cargo per year.

Passenger traffic
Passenger traffic is made up partly of ferry crossings within Denmark, partly of international ferry crossings and partly of cruise ship passengers. Some short ferry routes are being electrified and several more may be eligible, as in Norway.

Among the most important ports for passenger traffic (thousands of passengers per year in 2007) are:
 * Helsingør 10,967
 * Rødbyhavn 7,058
 * Frederikshavn 2,894
 * Sjællands Odde 2,233
 * Esbjerg 1,827
 * Gedser 1,612
 * Aarhus 1,583
 * Rønne 1,522
 * Ebeltoft 962
 * Copenhagen 872

In 2007, 288 cruise ships visited Copenhagen, rising to 376 in 2011 before returning to around 300 the following years. Around 800,000 cruise passengers and 200,000 crew visit Copenhagen each year.

Cargo traffic
Among the most important ports for cargo traffic (millions of tonnes per year in 2007) are:
 * Fredericia 15,327
 * Aarhus 12,189
 * Copenhagen 7,379
 * Helsingør 4,480
 * Esbjerg 4,476
 * Kalundborg 3,714
 * Frederikshavn 3,200
 * Aalborg Portland 2,999
 * Aalborg 2,749
 * Odense 2,616

Waterways
Waterways have historically and traditionally been crucial to local transportation in Denmark proper. Especially the Gudenå river-system in central Jutland, has played an important role. The waterways were navigated by wooden barges and later on steamboats. A few historical steamboats are still in operation, like the SS Hjejlen from 1861 at Silkeborg.

There is a 160 km natural canal through the shallow Limfjorden in northern Jutland, linking the North Sea to the Kattegat.

Many waterways has formerly been redirected and led through manmade canals in the 1900s, but mainly for agricultural purposes and not to facilitate transportation on any major scale. Several cities have manmade canals used for transportation and traffic purposes. Of special mention are the canals of Copenhagen and the Odense Canal, ferrying large numbers of both tourists and local citizens.

Merchant marine
Denmark has a large merchant fleet relative to its size. In 2018, the fleet surpassed 20 million gt as the government sought to repatriate Danish-owned tonnage registered abroad, with measures including removal of the registration fee.

Denmark has created its own international register, called the Danish International Ship register (DIS), open to commercial vessels only. DIS ships do not have to meet Danish manning regulations.

Railways

The largest railway operator in Denmark is Danske Statsbaner (DSB) — Danish State Railways. Arriva operates some routes in Jutland, and several other smaller operators provide local services.

The total length of operational track is 3,476 km standard gauge, with 1,756 km electrified.

The railway system is connected to Sweden by bridge in Copenhagen and ferry in Helsingør and Frederikshavn, by land to Germany in Padborg and ferry in Rødby and to Norway by ferry in Hirtshals.

Roads
The road network in 2017 totalled 74,558 km of paved road. Motorways are toll-free except for the Great Belt Bridge joining Zealand and Funen and the Øresund Bridge linking Copenhagen to Malmö in Sweden.

Cycling
Bicycling in Denmark is a common and popular utilitarian and recreational activity. Bicycling infrastructure is a dominant feature of both city and countryside infrastructure, with bicycle paths and bicycle ways in many places and an extensive network of bicycle routes, extending more than 12000 km nationwide. In comparison, Denmark's coastline is 7314 km. As a unique feature, Denmark has a VIN-system for bicycles which is mandatory by law. Often bicycling and bicycle culture in Denmark is compared to the Netherlands as a bicycle-nation.

Pipelines
Figures in 2015:
 * Crude oil: 330 km
 * Petroleum products: 578 km (2007)
 * Natural gas: 1536 km

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Transport in Denmark


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Danish Defence

The Danish Defence (Forsvaret; Danska verjan; Illersuisut; lit. 'the Defence') is the unified armed forces of the Kingdom of Denmark charged with the defence of Denmark and its self-governing territories Greenland and the Faroe Islands. The military also promote Denmark's wider interests, support international peacekeeping efforts and provide humanitarian aid.

Since the creation of a standing military in 1510, the armed forces have seen action in many wars, most involving Sweden, but also involving the world's great powers, including the Thirty Years' War, the Great Northern War, and the Napoleonic Wars.

Today, the armed forces consists of: the Royal Danish Army, Denmark's principal land warfare branch; the Royal Danish Navy, a blue-water navy with a fleet of 20 commissioned ships; and the Royal Danish Air Force, an air force with an operational fleet consisting of both fixed-wing and rotary aircraft. The Defence also includes the Home Guard. Under the Danish Defence Law the Minister of Defence serves as the commander of Danish Defence (through the Chief of Defence and the Defence Command) and the Danish Home Guard (through the Home Guard Command). De facto the Danish Cabinet is the commanding authority of the Defence, though it cannot mobilize the armed forces, for purposes that are not strictly defence oriented, without the consent of parliament.

Origins

The modern Danish military can be traced back to 1510, with the creation of the permanent Royal Danish Navy. During this time, the Danish Kingdom held considerable territories, including Schleswig-Holstein, Norway, and colonies in Africa and the Americas.

Following the defeat in the Second Schleswig War, the military became a political hot-button issue. Denmark managed to maintain its neutrality during the First World War, with a relative strong military force. However, following the Interwar period, a more pacifistic government came to power, decreasing the size of the military. This resulted in Denmark having a limited military, when Denmark was invaded in 1940.

Since the establishment of the Danish military, the two branches operated independently, without much cooperation. They both had their own ministry, and their own air force. The first proposal for a unified command came in 1928, when Hjalmar Rechnitzer suggested an independent air force, with all three branches collected under a central Rigsværn. It was however only after the lessons of joint operations in World War II, the branches were reorganized and collected under the newly created Danish Defence.

Cold War and international engagements
Denmark tried to remain neutral after World War II, with the proposed Scandinavian defence union. However, Norway resigned from the talks, and with Cold War tensions on the rise and the 1948 Easter Crisis, Denmark was forced to join the North Atlantic Treaty. During the Cold War, Denmark began to rebuild its military and to prepare for possible attacks by the Soviet Union and its Warsaw Pact allies. During this time Denmark participated in a number of UN peacekeeping missions including UNEF and UNFICYP.

Following the end of the Cold War, Denmark began a more active foreign policy, deciding to participate in international operations. This began with the participation in the Bosnian War, where the Royal Danish Army served as part of the United Nations Protection Force and were in two skirmishes. This was the first time the Danish Army was a part of a combat operation since World War 2. On April 29, 1994, the Royal Danish Army, while on an operation to relieve an observation post as part of the United Nations Protection Force, the Jutland Dragoon Regiment came under artillery fire from the town of Kalesija. The United Nations Protection Force quickly returned fire and eliminated the artillery positions. On October 24, 1994, the Royal Danish Army, while on an operation to reinforce an observation post in the town of Gradačac, were fired upon by a T-55 Bosnian Serb tank. One of the three Danish Leopard 1 tanks experienced slight damage, but all returned fired and put the T-55 tank out of action.

With the September 11 attacks, Denmark joined US forces in the War on terror, participating in both the War in Afghanistan and the Iraq War. In Afghanistan, 37 soldiers have been killed in various hostile engagements or as a result of friendly fire, and 6 have been killed in non-combat related incidents, bringing the number of Danish fatalities to 43, being the highest loss per capita within the coalition forces. Denmark has since participated in Operation Ocean Shield, the 2011 military intervention in Libya and the American-led intervention in the Syrian Civil War.

Purpose and task
The purpose of the Danish Defence is to prevent conflicts and war, preserve the sovereignty of Denmark, secure the continuing existence and integrity of the independent Kingdom of Denmark and further a peaceful development in the world with respect to human rights. This is defined in Law no. 122 of 27 February 2001 which took effect 1 March 2001.

Its primary tasks are: NATO participation in accordance with the strategy of the alliance, detect and repel any sovereignty violation of Danish territory (including Greenland and the Faroe Islands), defence cooperation with non-NATO members, especially Central and East European countries, international missions in the area of conflict prevention, crisis-control, humanitarian, peacemaking, peacekeeping, participation in Total Defence in cooperation with civilian resources and finally maintenance of a sizable force to execute these tasks at all times.

Total defence
Total Defence (Totalforsvaret) is "the use of all resources in order to maintain an organized and functional society, and to protect the population and values of society". This is achieved by combining the military, Home Guard, Danish Emergency Management Agency and elements of the police. The concept of total defence was created following World War II, where it was clear that the defence of the country could not only rely on the military, but there also need to be other measures to ensure a continuation of society. As a part of the Total Defence, all former conscripts can be recalled to duty, in order to serve in cases of emergency.

Defence budget
Since 1988, Danish defence budgets and security policy have been set by multi-year white paper agreements supported by a wide parliamentary majority including government and opposition parties. However, public opposition to increases in defence spending—during periods of economic constraints require reduced spending for social welfare — has created differences among the political parties regarding a broadly acceptable level of new defence expenditure.

The latest Defence agreement ("Defence Agreement 2018–23") was signed 28 January 2018, and calls for an increase in spending, cyber security and capabilities to act in international operations and international stabilization efforts. The reaction speed is increased, with an entire brigade on standby readiness; the military retains the capability to continually deploy 2,000 soldiers in international service or 5,000 over a short time span. The standard mandatory conscription is expanded to include 500 more, with some of these having a longer service time, with more focus on national challenges.

Expenditures
In 2006 the Danish military budget was the fifth largest single portion of the Danish Government's total budget, significantly less than that of the Ministry of Social Affairs (≈110 billion DKK), Ministry of Employment (≈67 billion DKK), Ministry of the Interior and Health (≈66 billion DKK) and Ministry of Education (≈30 billion DKK) and only slightly larger than that of the Ministry of Science, Technology and Innovation (≈14 billion DKK). This list lists the complete expenditures for the Danish Ministry of Defence.

The Danish Defence Force, counting all branches and all departments, itself has an income equal to about 1–5% of its expenditures, depending on the year. They are not deducted in this listing.

Approximately 95% of the budget goes directly to running the Danish military including the Home guard. Depending on year, 50–53% accounts for payment to personnel, roughly 14–21% on acquiring new material, 2–8% for larger ships, building projects or infrastructure and about 24–27% on other items, including purchasing of goods, renting, maintenance, services and taxes.

The remaining 5% is special expenditures to NATO, branch shared expenditures, special services and civil structures, here in including running the Danish Maritime Safety Administration, Danish Emergency Management Agency and the Administration of Conscientious Objectors (Militærnægteradministrationen ).

Because Denmark has a small and highly specialized military industry, the vast majority of Danish Defence's equipment is imported from NATO and the Nordic countries.

Danish Defence expenditures (1949–1989)

Danish Defence expenditures (1990–)

Royal Danish Army

The Danish Royal Army (Hæren) consists of 2 brigades, organised into 3 regiments, and a number of support centres, all commanded through the Army Staff. The army is a mixture of Mechanized infantry and Armoured cavalry with a limited capabilities in Armoured warfare.

The army also provides protection for the Danish royal family, in the form of the Royal Guard Company and the Guard Hussar Regiment Mounted Squadron.

Royal Danish Navy

The Royal Danish Navy (Søværnet) consists of frigates, patrol vessels, mine-countermeasure vessels, and other miscellaneous vessels, many of which are issued with the modular mission payload system StanFlex. The navy's chief responsibility is maritime defence and maintaining the sovereignty of Danish, Greenlandic and Faroese territorial waters.

A submarine service existed within the Royal Danish Navy for 95 years.

Royal Danish Air Force

The Royal Danish Air Force (Flyvevåbnet) consists of both fixed-wing and rotary aircraft.

Danish Home Guard
The Home Guard is voluntary service responsible for defence of the country, but has since 2008 also supported the army, in Afghanistan and Kosovo.

Structure

 * Danish Defence
 * Defence Command
 * Army Command
 * Royal Danish Army
 * Naval Command
 * Royal Danish Navy
 * Air Command
 * Royal Danish Air Force
 * Special Operations Command (SOKOM)
 * Joint Arctic Command
 * Plans and Capability Staff
 * Joint Operations Staff
 * Royal Danish Defence College
 * Royal Danish Military Academy
 * Army NCO School
 * Royal Danish Naval Academy
 * Naval NCO School
 * Royal Danish Air Force Academy
 * Air Force NCO School
 * Royal Danish Defence Language Academy
 * Defence Medical Command
 * Defence Maintenance Service

Special forces

 * SOCOM
 * Jægerkorpset: Ground-based infiltration unit.
 * Frømandskorpset: Amphibious attack and infiltration unit.
 * Slædepatruljen Sirius: Arctic dog sled unit patrolling the eastern border of Greenland.

Operations
Current deployment of Danish forces, per 10-03-2016:

NATO

 * A Challenger CL-604 MMA for maritime patrol in the Baltic Sea as part of NATO Allied Maritime Command.
 * 35 soldiers in Kosovo participating in NATO's Kosovo Force, guarding the French Camp Marechal De Lattre de Tassigny.
 * 97 people in Afghanistan as part of Resolute Support Mission.
 * HDMS Absalon patrolling the Aegean Sea for human trafficking (September 2016).

UN

 * 20 people in Bamako and Gao, as part of MINUSMA.
 * 13 people in Juba, as part of UNMISS.
 * 11 people in Israel, as part of UNTSO.
 * 2 people in South Korea, as part of UNCMAC.

National Missions

 * 12 men on the Sirius Patrol of Eastern Greenland.
 * A Challenger CL-604 MMA to fly patrol over Greenland.
 * Rota between HDMS Lauge Koch, HDMS Knud Rasmussen, HDMS Triton and HDMS Thetis to enact sovereignty patrol in the seas of Greenland and Faroe Islands.
 * A Challenger CL-604 MMA to do maritime environmental monitoring missions in the North Sea.

Coalitions

 * 149 people at Al Asad Airbase in Iraq to train the local military as part of Operation Inherent Resolve.
 * 8 people operating radars as part of the radar element in Operation Inherent Resolve.
 * 20 people in UAE as part of the operator element in Operation Inherent Resolve.
 * Unknown number of Danish special forces in Senegal to train the local special forces as part of Flintlock 2016.

Women in the military

Women in the military can be traced back to 1946, with the creation of Lottekorpset. This corps allowed women to serve, however, without entering with the normal armed forces, and they were not allowed to carry weapons. In 1962, women were allowed in the military.

Currently 1,122 or 7.3% of all personnel in the armed forces are women. Women do not have to serve conscription in Denmark, since 1998, it is however possible to serve under conscription-like circumstances; 17% of those serving conscription or conscription-like are women. Between 1991 and 31 December 2017, 1,965 women have been deployed to different international missions. Of those 3 women have lost their lives. In 1998, Police Constable Gitte Larsen was killed in Hebron on the West Bank. In 2003, Overkonstabel Susanne Lauritzen was killed in a traffic accident in Kosovo. In 2010, the first woman was killed in a combat situation, when Konstabel Sophia Bruun was killed by an IED in Afghanistan.

In 2005, Line Bonde became the first female fighter pilot in Denmark. In 2016, Lone Træholt became the first female general. She was the only female general in the Danish armed forces until the army promoted Jette Albinus to the rank of brigadier general on 11 September 2017. In May 2018, the Royal Life Guards was forced to lower the height requirements for women, as the Danish Institute of Human Rights decided it was discrimination.

Conscription
Technically all Danish 18-year-old males are conscripts (37,897 in 2010, of whom 53% were considered suitable for duty). Due to the large number of volunteers, 96-99% of the number required in the past three years, the number of men actually called up is relatively low (4,200 in 2012). There were additionally 567 female volunteers in 2010, who pass training on "conscript-like" conditions.

Conscripts to Danish Defence (army, navy and air force) generally serve four months, except:
 * Conscripts of the Guard Hussar Regiment Mounted Squadron serve 12 months.
 * Conscripts with Cyber-conscription, who serve 10 months.
 * Conscripts aboard the Royal Yacht Dannebrog serve nine months.
 * Conscripts in the Danish Emergency Management Agency serve nine months.
 * Conscripts in the Royal Life Guards serve eight months.

There has been a right of conscientious objection since 1917.

title: Danish Defence


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Foreign relations of Denmark

The foreign policy of Denmark is based on its identity as a sovereign state in Europe, the Arctic and the North Atlantic. As such its primary foreign policy focus is on its relations with other nations as a sovereign state compromising the three constituent countries: Denmark, Greenland and the Faroe Islands. Denmark has long had good relations with other nations. It has been involved in coordinating Western assistance to the Baltic states (Estonia, Latvia, and Lithuania).

The country is a strong supporter of international peacekeeping. Danish forces were heavily engaged in the former Yugoslavia in the UN Protection Force (UNPROFOR), with IFOR, and now SFOR. Denmark also strongly supported American operations in Afghanistan and has contributed both monetarily and materially to the ISAF. These initiatives are a part of the "active foreign policy" of Denmark.

Instead of the traditional adaptative foreign policy of The unity of the Realm, Kingdom of Denmark is today pursuing an active foreign policy, where human rights, democracy and other crucial values are to be defended actively. In recent years, Greenland and the Faroe Islands have been guaranteed a say in foreign policy issues, such as fishing, whaling and geopolitical concerns.

Following World War II, Denmark ended its two-hundred-year-long policy of neutrality. Denmark has been a member of NATO since its founding in 1949, and membership in NATO remains highly popular. There were several serious confrontations between the U.S. and Denmark on security policy in the so-called "footnote era" (1982–88), when an alternative parliamentary majority forced the government to adopt specific national positions on nuclear and arms control issues.

The alternative majority in these issues was because the Social liberal Party (Radikale Venstre) supported the governing majority in economic policy issues, but was against certain NATO policies and voted with the left in these issues. The conservative led Centre-right government accepted this variety of "minority parliamentarism", that is, without making it a question of the government's parliamentary survival. With the end of the Cold War, Denmark has been supportive of U.S. policy objectives in the Alliance.

Danes have a reputation as "reluctant" Europeans. When they rejected ratification of the Maastricht Treaty on 2 June 1992, they put the EC's plans for the European Union on hold. In December 1992, the rest of the EC agreed to exempt Denmark from certain aspects of the European Union, including a common security and defense policy, a common currency, EU citizenship, and certain aspects of legal cooperation. The Amsterdam Treaty was approved in the referendum of 28 May 1998.

In the autumn of 2000, Danish citizens rejected membership of the Euro currency group in a referendum. The Lisbon treaty was ratified by the Danish parliament alone. It was not considered a surrendering of national sovereignty, which would have implied the holding of a referendum according to article 20 of the constitution.

History
In 1807 Denmark was neutral but Britain bombarded Copenhagen and seized the Danish Navy, Denmark became an ally of Napoleon. After Napoleon was profoundly defeated in Russia in 1812, the Allies repeatedly offered King Frederick VI a proposal to change sides and break with Napoleon. The king refused. Therefore, at the peace of Kiel in 1814, Denmark was forced to cede Norway to Sweden. Denmark thus became one of the chief losers of the Napoleonic Wars. Danish historiography portrayed King Frederick VI as stubborn and incompetent, and motivated by a blind loyalty to Napoleon. A more recent Danish historiographical approach emphasizes the Danish state was multi-territorial, and included the semi – separate Kingdom of Norway. It was dependent for food on grain imports controlled by Napoleon, and worried about Swedish ambitions. From the king's perspective, these factors called for an alliance with Napoleon. Furthermore, the king expected the war would end in a negotiated international conference, with Napoleon playing a powerful role that included saving Norway for Denmark.

1900–1945
The Danish government responded to the First World War by declaring neutrality 1914–1918. It maintained that status until 1945 and accordingly adjusted trade; humanitarianism; diplomacy; and attitudes. The war thus reshaped economic relations and shifting domestic power balances.

1990–
Since the end of the Cold War, Denmark has become more supportive of U.S. foreign policy. Denmark supported the U.S. invasion of Iraq in 2003 and contributed assets to the invasion. Denmark also participated in the Afghanistan War. Denmark increased its participation in military and peacekeeping operations compared to the pre-Cold War period. Whereas Denmark only participated in 13 military operations from 1945 to 1989, Denmark participated in 76 military operations between 1990 and 2018.

International disputes

 * North Pole. Denmark is trying to prove that the North Pole is geographically connected to Greenland. If such proof is established, the Kingdom will claim the North Pole.

Settled international disputes

 * Hans Island. An island located between Greenland and Canadian Arctic islands. Unresolved boundary disputed between Canada and Denmark (The state of Denmark is responsible for Greenland's foreign relations). This dispute flared up again in July 2005 following the visit of a Canadian minister to the disputed island. On 14 June 2022 both countries agreed to split the disputed island in half. In accordance with the Greenland home rule treaty, Denmark handles certain foreign affairs, such as border disputes, on behalf of the entire Danish Realm.

Diplomatic relations
List of countries which Denmark maintains diplomatic relations with:

Pre-1940

 * Feldbæk, Ole. "Eighteenth‐century Danish neutrality: Its diplomacy, economics and law." Scandinavian Journal of History 8.1–4 (1983): 3–21.
 * Feldbæk, Ole. "Denmark and the Treaty of Kiel 1814." Scandinavian Journal of History 15.3–4 (1990): 259–268.
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title: Foreign relations of Denmark