European Commission
Europe 2020

Country-specific Recommendations

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 12 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Proposed recommendations for Denmark 2012

In 2012, the Danish economy is expected to pick up slightly as compared to 2011, with a foreseen GDP growth of 1.1%. Unemployment more than doubled from a record low of 3.4% in 2008 to 7.6% in 2011 and is expected to remain broadly stable in 2012 at 7.7%.

A reform of the voluntary early retirement pension scheme was adopted last year, establishing a good basis for raising the effective retirement age. In addition, an ambitious budget law was recently agreed. The government has announced a comprehensive set of reforms to raise labour supply further, improve competitiveness, and lower income taxes.

The budget deficit must be reduced to comply with the EDP recommendation and further reforms are warranted to increase the labour supply. The quality of compulsory and upper secondary education needs to be improved to tackle problems of future skills imbalances and low productivity growth. In this respect, further steps are also warranted to remove obstacles to competition. In addition, strengthening the medium-term stability of the housing market remains a challenge, partly on account of the rise in household debt and its composition on the back of the housing boom prior to the crisis.

Overview of recommendations

1. Implement the budgetary strategy as envisaged, to ensure a correction of the excessive deficit by 2013 and achieve the annual average structural adjustment effort specified in the Council recommendations under the Excessive Deficit Procedure. Thereafter, ensure an adequate structural adjustment effort to make sufficient progress towards the medium-term budgetary objective (MTO), including meeting the expenditure benchmark.
   More information on Denmark’s economy
2. Take further steps to enhance long-term labour supply by reforming the disability pension, better targeting subsidised employment schemes (the ‘flex-job’ system) towards people with reduced work capacity, and improving the employability of people with migrant background.
   More information on the European employment strategy
3. Implement announced measures, without delay, to improve the cost-effectiveness of the education system, reduce drop-out rates, in particular within vocational education, and increase the number of apprenticeships.
   More information on the European strategic framework on education and training
4. Continue efforts to remove obstacles to competition, in particular in local services, the retail and construction sector, including by further opening the municipal and regional procurement of services to competition and ensuring that competition law sanctions are sufficiently deterrent.
   More information on competition
5. Consider further preventive measures to strengthen the stability of the housing market and financial system in the medium-term, including by taking account of the results of the ongoing study by the Ministry of Business and Growth on the distribution of assets and liabilities across households and by reviewing the property value and municipal land value tax system.

See how Denmark compares with other EU Member States in key areas

European Semester Documents

National Reform Programme

All Member States have committed to the Europe 2020 strategy. However, each country has different economic circumstances and translates the overall EU objectives into national targets in its National Reform Programme – a document which presents the country's policies and measures to sustain growth and jobs and to reach the Europe 2020 targets. The National Reform Programme is presented in parallel with its Stability/Convergence Programme, which sets out the country's budgetary plans for the coming three or four years.

Macroeconomic indicators

Europe 2020 targets – State of play