Tuesday, August 16, 2005

Spectacularly wrong

The Danish newspaper Berlingske Tidende is in a buoyant mood today, chortling that, while most of Europe is stagnating, Danish business life is going at full speed.

The companies make much money and consumption continues steadily in spite of the high oil prices, it writes, gleefully adding that Danish companies’ export is really working at full throttle.

The twelve countries in the euro exchange have a collective growth rate of 1.2 percent over the last years, and while growth is decreasing, it is quite the reverse in Denmark. Here annual growth is 2.3 percent, estimates Danske Bank. "Denmark does well compared with most of Europe", states David Rae, an economist in the OECD.

Moreover, the largest Danish companies are roaring ahead. Among other things, this is because things are fine on the home market. "The Danish economy is at the top in Europe, which has a flat growth rate and considerable unemployment. We have a trade surplus and we have a surplus on the government's budget so we do not need to bring in all sorts of brake blocks in our economy," says spokesman and general manager Peter Straarup, of Danske Bank.

What price Prime minister Poul Nyrup Rasmussen, who in May 2000 in the run-up to the Danish euro referendum, warned that remaining outside Euroland threatened a financial crisis and would represent a great danger to social spending?

"The greatest threat against our welfare system are the speculators on the world's money markets who will throw themselves at us if we reject the euro. Our best insurance against this is adopting the common currency," he said.

There can be few better examples of a politician having got something so spectacularly wrong. If he had any decency, Rasmussen would be hanging his head in shame.

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