Economy in Denmark

Country Data Denmark

Denmark is a Northern European country with Copenhagen as its capital and Danish as its official language within the European Union. It has been a member of the EU since 1 January 1973. The national currency is the Danish krone (DKK); Denmark has negotiated a formal opt-out from adopting the euro and is therefore not obliged to join the euro area. The country has been part of the Schengen area since March 2001, allowing for passport-free travel across participating European states. Key indicators such as geographic size, population, and GDP per capita measured in purchasing power standards highlight Denmark’s strong economic performance and high standard of living within the EU.

Politically, Denmark is a constitutional monarchy with a representative parliamentary system. Executive authority is exercised by the government, led by the prime minister, while the monarch serves as head of state in a largely ceremonial and symbolic role. Denmark’s parliamentary democracy is well established and characterized by political stability and consensus-driven governance. The Kingdom of Denmark also includes two autonomous territories in the North Atlantic—the Faroe Islands and Greenland—which are self-governing and not part of the European Union.

Denmark’s economy is highly developed and service-oriented, with a strong public sector and a competitive private economy. In 2020, the largest contribution to economic output came from public administration, defence, education, healthcare, and social services, followed by wholesale and retail trade, transport, accommodation, and food services. Industry also plays an important role, particularly in areas such as pharmaceuticals, food processing, renewable energy, and advanced manufacturing. Trade is closely integrated with the European Union, which accounts for just over half of Danish exports. Germany and Sweden are Denmark’s most important export destinations within the EU, while the United States and Norway are key markets outside the Union. Imports are likewise dominated by EU partners—especially Germany, Sweden, and the Netherlands—alongside significant inflows from China and Norway.

Within the European Union, Denmark is represented by 14 Members of the European Parliament and actively participates in EU decision-making processes. Danish government representatives take part in the Council of the EU, where they contribute to the adoption of EU legislation and the coordination of policies across a wide range of sectors. Denmark has held the rotating Presidency of the Council of the EU on multiple occasions, most recently in the first half of 2012, reflecting its long-standing engagement in European governance.

At the European Commission level, Denmark is represented by its nominated Commissioner, Margrethe Vestager, who serves as Executive Vice-President for a Europe fit for the Digital Age. The European Commission maintains an official representation in Denmark, supporting dialogue between EU institutions, national authorities, and the public. Denmark is also represented in key advisory bodies, with nine members each on the European Economic and Social Committee and the European Committee of the Regions, ensuring that social, economic, and regional perspectives are reflected in EU policymaking.

Denmark maintains a permanent representation to the European Union in Brussels, which acts as the main interface with EU institutions and plays a central role in advancing Danish interests within the EU framework. As a relatively prosperous member state, Denmark contributes to the EU budget in line with its economic capacity. These contributions support EU-wide programmes and projects, including infrastructure development, research and innovation, environmental protection, and regional cohesion. EU-funded initiatives in Denmark, in turn, benefit from this shared budget by supporting sustainable development, scientific research, and environmental and social projects both nationally and across the Union.