IV.  POLITICAL ENVIRONMENT

Nature of the Bilateral Relationship with the United States:
Although US-Danish relations were strained in the early 1980s
over security issues, bilateral relations are now excellent.
NATO, the keystone of the American national security
relationship with Denmark, is popular in Denmark, perhaps more
so than in any other country in Europe. More than 70 percent
of the Danes favor Danish membership of NATO, and the Danes
are also adamant that progress toward European integration
should not come at the expense of transatlantic ties.  Concern
for retaining NATO is one of the arguments consistently
invoked by opponents of Danish membership in the Western
European Union.

Major Political Issues Affecting the Business Climate:  There
are no political issues affecting the business climate in
Denmark.

Brief Synopsis of Political System, Schedule for Elections,
and Orientation of Major Political Parties:  Denmark is a
constitutional monarchy.  The Parliament, known as the
Folketing, is elected for a four-year term, but usually
elections are held before the four years are up,  either
because the Government is toppled in a vote of confidence, or
because the Prime Minister calls an election (which he can do
at any time) in an attempt to increase the government
coalition's parliamentary position.  Denmark has a history of
minority governments.  An election must be held before the
middle of December 1994.

With a few amendments (the latest and most comprehensive in
1953), the Constitution dates from 1849, when the King
renounced absolutism (the "royal dictatorship"). Today Denmark
is among the most politically stable democracies.  The Queen
nominally rules through the Prime Minister and his Cabinet. As
the Prime Minister is accountable to the Folketing (Denmark's
unicameral parliament), the Queen "chooses" him based on
recommendations from the leaders of the political parties.

The Prime Minister works through Cabinet Ministers and their
ministries. Cabinet Ministers need not be members of
Parliament, although all but seven of the current 22 ministers
are.  Ministers have no political Deputy Ministers or
Secretaries of State as in other parliamentary democracies.
Rather, they have one or more Permanent Under Secretaries, who
are the highest-ranking civil servants within the ministry.
There are no political appointees among the civil servants,
who remain unaffected by changes of government.

Parliament has 175 members, plus two each from Greenland and
the Faroes, which are autonomous parts of the Danish realm.

Judicial power rests solely with the courts, although the
Monarch on rare occasions grants pardons.

In 1994, eight political parties are represented in the
Folketing, four of which have a long parliamentary history.
Political parties play a much greater role in Danish politics
than in the United States, for two major reasons. The first is
the system of awarding seats on the basis of proportional
representation.  The second reason is the fact that Folketing
members do not have their own staffs (nor, for that matter, do
parliamentary committees). As a result, Danish
parliamentarians must rely on their parties for support and
technical expertise on legislative issues. Party discipline,
as a consequence, is very tight.

The government that took office on January 25, 1993, is a
minority coalition composed of four parties: The Social
Democrats, the Radicals, the Center Democrats, and the
Christian Peoples Party. Together, these parties control 88 of
the 179 seats in the Folketing.

The Social Democratic Party (SDP, with 69 seats), is the party
of Prime Minister Poul Nyrup Rasmussen and by far the largest
party in the Folketing. Founded in 1871, the left-of-center
SDP has been in government for most of the post-WWII era
except for the 1982-93 period. The SDP traditionally has
support from the Danish Confederation of Trade Unions (LO).
The SDP was the primary originator of the Danish welfare state
in the 1920s and 1930s, and today its policies include
expanding the public sector to fight unemployment and
supporting a powerful government role in the economy and
society. The party's members still harbor misgivings about
closer European integration.

The two major non-socialist opposition parties are the
Conservative People's Party (30 seats in the Folketing), and
the Venstre Party (also 30 seats). Venstre's platform very
much resembles that of the Konservatives, although Venstre is
generally more willing to reduce government power and budgets
than are the Konservatives.  Venstre also a very strongly
supports European integration, while the Konservatives are
much more hesitant and cautious.