REV: OCTOBER 14, 2010
ARTHUR A. DAEMMRICH BENJAMIN KRAMARZ
De enmark Globa k: alizatio and the We on elfare S State
On April 5, 200 Lars Løkk Rasmussen was named prime mini n 09, ke n d ister of Denm mark followin the ng appoi intment of An nders Fogh R Rasmussen, p prime ministe since 2001, as secretary general of N er NATO. Thoug not related Lars Løkke had worked in Anders Fo gh d, e ogh’s governm ment, first as interior and h health minis ster and then as minister of finance. A he formed a new gove As d ernment, Lars Løkke soug to s ght develop a set of long-term economic and social plans that would keep Denma internatio l ark onally competitive, despite its large pu ublic sector an costly welf nd fare spending However, s g. short-term rea action to the worldwide economic do e ownturn dom minated policy discussions. A long-stan y . nding debate about joinin the Eurozo was given new saliency when the European Ce ng one n entral Bank lowered its ra on ate “refin nancing opera ations,” which provided liq h quidity to the Eurozone, ju days befor Lars Løkke took e ust re e office. Denmark was a member of the Europ w r pean Union but had retain its own cu ned urrency, the k krone. Likew wise, plans for rmulated a year ago to ex xpand the Dan nish workforc by looseni labor rule and ce ing es reduc cing welfare benefits had b b become unpop pular as unem mployment in ncreased. An nders Fogh Rasmussen had left a mixed legacy. Denm d d mark benefite from a balanced govern ed nment budge little publi debt, and lo unemploy et, ic ow yment. But its internationa reputation had suffered from s al d contro oversies over immigration. As the lo r ongest ruling Liberal Part (Venstre) prime minist in g ty ter mode Danish hi ern istory, Ander Fogh had led a centerrs -right coalitio governme that developed on ent strict immigration policies. The policies m ese made it relativ vely easy for f foreigners to work in Denm mark, but d difficult for th hem to stay in the country and benefit from world-class educat n y t tion, skills tra aining and j job transfer programs; g generous un nemployment disability and sick lea t, ave benefits; and ; gover rnment-suppo orted pension A ruling by the European Court of Justice in mid-2008 held th EU ns. hat memb states had to grant residency permi to non-EU spouses and immediate f ber d its U d family memb bers of EU citizens.1 Denm mark had dela ayed impleme enting the rule, but opting out would o g only further is solate the co ountry from its EU trading partners, who had no forgotten t ot that Danes n nearly scuttle the ed Maast tricht Treaty in 1992. At on point cons ne sidered a cand didate for the EU presiden e ncy, Anders F Fogh’s eventual appointm ment as NATO secretary g O general becam controvers in early 2 me sial 2009 when Tu urkey threat tened to veto the choice, c citing concern over the Da ns anish govern nment’s suppo of a newsp ort paper that h published satirical depictions of th Prophet M had d he Mohammed. O Only high-lev interventio by vel on U.S. P President Bara Obama sm ack moothed the w for Ande Fogh to as way ers ssume the new role.2 w Re estive unions also played into Lars L s d Løkke Rasmu ussen’s plann ning for his new govern nment. Denm mark had the world’s lea e ading union membership rate, with m more than 80 of all wo 0% orkers belon nging to a union. Unlike ot ther heavily u unionized cou untries, Denm mark had a his story of arriving at nation nal agreeme ents between unions a n and employ yers through cordial, c h consensus-ori iented negot tiations. Dani ish unions h had long welcomed new immigrants into their o organizations and s, offere members benefits that i ed b included lang guage educat tion, skills tra aining, and cu ultural couns seling. Never rtheless, unions were an nxious about the scale of immigrat tion in the 2000s. Empl loyers _______ _______________ _______________ _______________ ________________ _______________ _______________...
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