“We are a small country,” explains Steen Hommel, “but we are very international in the way that we work.” Hommel, who heads up Invest in Denmark, a “fully integrated part of the Ministry of Foreign Affairs”, would say that, wouldn’t he? After all, it is his job to attract outside investors to spend money in Denmark. But there is something in what he says. This is a country that is highly digitalized and that spends a great deal on research and development (R&D). And its capital, Copenhagen, is arguably the most environmentally friendly city in the world. You can’t get more international than trying to save the planet.
Copenhagen has done much to earn Denmark its highly regarded outward-looking reputation. It has for decades engaged with environmental issues much more profoundly than more glamorous European capitals, such as London, Paris or Rome. By 2009, it had been named the greenest city in Europe in the Siemens/Economist Green City Index; it received a green boost when named 2014’s European Green Capital; and it now aims to be the first city on the planet to be carbon neutral (by 2025).
Best for bikes
Characteristically, it’s the humble bike that is the most visually arresting of Copenhagen’s sustainability efforts. The online eco-magazine YaleEnvironment360 reported in 2013 that “36 per cent of trips to work or school in the Danish capital are made by bike, and more than 20,000 cyclists enter the city centre at peak hours”. With around 400 kilometres of cycle lanes, “Copenhagen simply isn’t designed for cars,” explains Copenhagen-based journalist Peter Stanners. “Instead, bicycles, trains, buses and the metro offer a quick and reliable means of transport around the city, at any time of day or night.”
Bikes and an excellent public transport system complement a number of other green initiatives. An impressive 98 per cent of the city’s heating is supplied by waste heat from electricity production, which is channelled through pipes into people’s homes. According to C40 Cities (a network of cities collaborating to address climate change), the system reduces household bills by €1,400 a year. It’s “saved the Copenhagen district the equivalent of 203,000 tons of oil every year”. That’s 665,000 tons of CO2. One of the most interesting green developments is Amager Bakke. Set to open in December 2018, it’s not only a cutting-edge “waste-to-energy plant” that will boost the city’s 2025 carbon-neutral ambitions. It will also have skiers on its external artificial ski slope, which leads directly to a hiking area.
Of course, it’s not just the capital that is environmentally ambitious. The island of Samsø is already 100 per cent reliant on renewable energy, through wind, solar energy and biomass. A huge offshore wind farm in the Baltic Sea will provide enough electricity for 600,000 households when it opens in 2022. By 2015, more than 40 per cent of Denmark’s energy was from wind power, and the aim is that it will reach 50 per cent by 2020. Moreover, it aims to be the first country in the world to be completely free of fossil fuels by 2050.
The local government has done much to attract businesses involved in sustainability, which explains why Copenhagen is home to a major cleantech cluster, with around 170 members. The city is spending around €360 million on its carbon-neutral ambitions. It is also a bastion of the Social Democratic party (which has provided every lord mayor since 1938), and in the 2017 local elections, the Social Democrats again came first (with 27.6 per cent). They were followed by two environmental parties: the Red−Green Alliance (18.4 per cent) and a new party, The Alternative (10.5 per cent).
Best for business
Denmark, a country of just 5.6 million people, is considered to be one of the world’s best places to do business, with the World Bank placing it third in its Ease of Doing Business rankings. Hommel emphasizes the country’s transparency, its political and economic stability, and its flexibility. Denmark comes a creditable 12th in the World Economic Forum’s Global Competitiveness Report, which measures indicators such as infrastructure, education, innovation and market size. It also has a growing reputation for hosting data centres — Facebook is building one in Odense, says Hommel. And with it, he adds, “they’ve signed a contract for 6,900 households” to receive “surplus heat from the data centre”, replacing coal.
In the EU’s 2018 Innovation Scoreboard, only Sweden is ahead of Denmark, and in both 2017 and 2018, Denmark led the EU’s Digital Economy and Society Index (followed by Sweden, Finland and the Netherlands). The country’s spending on R&D is also consistently high, at around 2.9 per cent of GDP from 2009 to 2015 (in the same period, the UK’s R&D spending was around 1.7 per cent and Germany’s rose from 1.7 per cent to 3 per cent).
For decades, Denmark’s concept of “flexicurity” has attracted praise. This is a system broadly supported by employers and unions that makes hiring and firing easy, on the one hand, while on the other, the welfare state is very strong. High job turnover is a feature of the labour market. But for people without work, there is income security in the form of a strong safety net and active policies to ensure that people find work and/or training quickly.
Challenges to the Danish model
Recently, however, the efficacy of flexicurity has been questioned in an age of austerity. Denmark was hit hard by the financial crisis of 2007–08, reflected in high unemployment, a 6 percent or more contraction of GDP by 2009 (the eurozone averaged a 4.5 per cent contraction) and jobs much harder to come by. Nevertheless, the economy, slowly recovered and, in 2017, it recorded its strongest growth in a decade.
A closer look, however, reveals a one-off patent payment showing underlying challenges, as seen by fluctuations in quarterly and year-on-year economic performance. Indeed, 2017 also saw Denmark’s biggest quarterly GDP contraction since 2011, and it has been reported that without the one-off patent windfall, growth would have been just 0.4 per cent.
The Danish central bank has warned of an overheated housing market and the European Commission forecasts that growth will drop to 1.2 per cent this year. And, worryingly, climate-related issues offer a glimpse of future challenges: a warm summer and drought in 2018 resulted in agricultural losses of around €1 billion, with a negative effect on Danish exports and GDP growth.
Moreover, the country’s hard-won reputation for propriety has been hit (at least in the financial media) by a scandal surrounding €200 billion in possible laundered money connected to the once respected Danske Bank — the country’s largest lender. The bank’s CEO resigned in September 2018.
Nonetheless, despite a challenging post-2008 period, Denmark can still boast that education in the country is free, with university paid for by direct taxation. And the country has been self-sufficient in many agricultural products (such as pork, poultry, cereals and dairy products) for decades, and is a major exporter of food.
The populists become … popular
Denmark joined the EEC (today the EU) in 1973, in the same year as the UK. In the past few years, as in many other EU states, a number of populists have caught the mood within parts of the population. Far-right populist parties made large gains in the Folketing, the Danish parliament, and they have become emboldened since the migrant crisis of 2015.
Led by Prime Minister Lars Løkke Rasmussen of the centre-right Venstre party, Denmark continues to construct some of the most prohibitive immigration policies in Europe, says Michala Clante Bendixen, founder of Refugees.dk — an NGO and Danish–English website focusing on refugees in Denmark. Bendixen is scathing about the treatment of migrants: “It’s a deliberate policy that Denmark should not be attractive for asylum seekers in any way. The goal is for the government to make refugees or asylum seekers choose another country instead of Denmark.”
As the 2015 general election neared, the increasing popularity of the anti-immigrant and anti-Muslim Danish People’s Party (DPP) pushed not only various “liberal” parties to the right, but also the Social Democrats. The Financial Times reported that Denmark was experiencing “how a populist party could change a country’s political landscape”. It is “remarkable”, a prominent Danish CEO is quoted as saying. “The Danish People’s Party once seemed quite extreme but now they’re mainstream.” Openly anti-immigrant rhetoric by leading politicians has, critics say, in turn legitimized racism.
In the 2015 general election, the Social Democrats took 26.3 per cent of the votes, with Venstre at 19.5 per cent. The Alternative, a newly constituted party, along with the Red–Green Alliance, gave eco-focused parties 12.6 per cent between them. As expected, however, the Danish People’s Party made the biggest waves — an increase of 8.8 per cent gave it 21.1 per cent.
Rasmussen’s minority government has relied on allies, including the DPP, and sometimes the opposition, to push through legislation. It is further narrowing rules on refugee applications and citizenship criteria. Laws and proposals range from reducing integration payments to making family reunions more difficult.
Steen Hommel sidesteps questions about the impact of anti-immigrant rhetoric on a country that sees itself as modern and internationally focused. He does, however, accept that the country needs skilled labour. He discusses “insufficient master’s graduates” in IT and how foreign specialists need to come not only from the EU but also from “third countries” to “satisfy our needs”.
Michala Clante Bendixen has her own ideas on how to reduce Denmark’s skills gap: “We should focus on trying to make asylum seekers and refugees part of society — see them as the resources they are in the long term instead of seeing them as an economic burden.”
What is Denmark?
In the summer of 2018, Denmark followed France and Austria in introducing a “burka ban”. This in a country in which around 0.1 per cent of the population (between 150 and 200 women) wear either a niqab or a burka. DPP immigration spokesman Martin Henriksen said: “The parliament says very clearly that the burka and niqab do not belong in Denmark. They are incompatible with Danish culture.”
Despite some politicians’ rhetoric of intolerance and the clear constituency for anti-immigrant policies, many Danes are opposed to right-wing politics. Many Social Democratic and Green voters are bewildered by the obsession with immigration and Islam. If Copenhagen’s voters in 2017 are any indication, it hasn’t impressed the capital. Copenhagen is an open, tolerant city and a world leader in sustainability. Would it be a caricature to suggest that Denmark has a green heart and a populist body?
It’s difficult to predict how these two contrasting images of Denmark will play out. Despite the country’s (partially) populist turn — providing the economy remains robust — Denmark’s reputation as an affluent Scandinavian country, with a capital leading the world in sustainability, will be maintained. But should the worldwide economy suffer another economic crisis, acceptance of the populist discourse in recent years could present Denmark with major challenges from an emboldened right.