Denmark's National Reform Programme

31-10-2006

This progress report is a follow-up on the National Reform Programme presented in the fall of 2005. Progress reports must be prepared in the intervening years within the defined three-year cycle for the Reform Programmes. This report describes the initiatives taken since the preparation of the Reform Programme in 2005, with the inclusion of the Commission’s assessment of the Reform Programme and the European Council’s conclusions from the March 2006 spring summit.

This progress report is a follow-up on the National Reform Programme presented in the fall of 2005. Progress reports must be prepared in the intervening years within the defined three-year cycle for the Reform Programmes. This report describes the initiatives taken since the preparation of the Reform Programme in 2005, with the inclusion of the Commission’s assessment of the Reform Programme and the European Council’s conclusions from the March 2006 spring summit. In order to ensure a cohesive and independent progress report a general presentation of reforms that have already been implemented or planned is given in line with the 2005 Reform Programme, while focusing mainly on changes and initiatives undertaken in the last 12 months .   

The Danish Reform Strategy builds on two decades of comprehensive structural reforms, particularly of the monetary policy, the fiscal policy and the labour market. Those reforms have ensured a robust financial balance in the public and private sectors after major imbalances in the previous decades. The unemployment rate has been brought down to a structurally low level and the overall employment rate is high compared to other countries. At the same time low income dispersion has been maintained. The Danish “flexicurity model” for the labour market is characterised by flexible rules for hiring and dismissal, a relatively high level of unemployment benefits and social security and a comprehensive active labour market policy.

The 2005 Reform Programme identified four major economic and social challenges in the years to come:


• Prepare for the ageing of the population through a continued reduction of public debt and ensuring a permanently higher employment rate, including through improved employment and integration of disadvantaged groups.  

• Reap the full benefits of globalisation through flexible markets, an extensive improvement of the quality of education, an increase in the share of young people completing an upper secondary or tertiary education, and an effective strengthening of the quality and quantity of research.

• Strengthen the framework for productivity improvement in the private sector through strong competition, better cooperation between public education and research, promotion of innovation and entrepreneurs as well as improved regulation and infrastructure.

• Get as much value as possible for the users of the public sector, in which modern management, in the absence of direct market tests, shall be supported by institutional incentives, fast utilisation of new technology, free choice and competition exposure.  

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