Saturday, 13 May 2017

European Semester: Country Report Denmark 2017

We started looking at the Danish economy at the beginning of the European Semester 2017 in the blog entry European Semester 2017 start: Denmark.

I hope that the European Commission manages to inspire, and that politicians, civil servants, interest groups and activists with the right priorities use benchmarking exercises, such as the European Semester, in order to profit from an outside view and clear suggestions for reform steps and corrections.

Assessment of progress

In February 2017 the European Commission published the overview communication:
2017 European Semester: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances, and results of in-depth reviews under Regulation (EU) No 1176/2011; Brussels, 22.2.2017 COM(2017) 90 final (27 pages)

Amidst a generally improving outlook, the communication summarises the progress in implementing reforms and in addressing the imbalances in member states’ economies (p. 2), initially in broad terms, later selectively highlighting promising reforms in individual countries and finally reporting country by country on findings from in-depth-reviews (p. 24-27).

In 2017 Denmark is one of 14 EU member states not selected for and in-depth review (IDR) (p.8).

Country Report Denmark

The communication was accompanied by a detailed Commission staff working document (SWD) providing a wealth of information concerning each member state, such as for Denmark:

Country Report Denmark 2017; Brussels, 22.2.2017 SWD(2017) 70 final (52 pages)  

A summary of main findings and policy challenges (p. 2-3) spurs the reader on to the detailed analysis of how to boost investment, pursue structural reforms and ensure  responsible fiscal policies.

Denmark’s economic policy challenges include surging house prices in urban areas, large household debt, groups at the margins of labour markets, vocational and ICT skills shortages, integrating refugees into labour markets, improving school performance of pupils with first and second generation migrant background, reigniting productivity growth, inadequate start-up and scale-up performance and enhancing competition in services markets.

Those most interested in a quick general view are rewarded by the one page Table 1.1 on key economic, financial and social indicators (p. 11).

Box 3.3.1 on page 28 highlights the flexicurity theme, including how the system has been tweaked in order to encourage employment.     
With regard to entrepreneurship and the lack of start-up and scale-up performance mentioned earlier, I want to highlight Scale-Up Denmark (quote from page 32):

Scale-up Denmark is currently the largest Scandinavian accelerator programme. The objectives of this programme are (1) to increase the number of high-growth startups; (2) to provide established companies with innovation opportunities; (3) to build next-generation serial innovators; and (4) to develop self-sustaining ecosystems that persist without public funding.

The overview table (from page 41) offers a clear picture of progress on 2016 country-specific recommendations (CSRs) and towards Europe 2020 targets.

Ralf Grahn