After a cool and windy June, the weather has now changed in the first days of July. The Danish Meteorological Institute forecasts bright sunshine and temperatures that may creep above 30 degrees. While Danish summer weather is famously unpredictable, the quality of life for Danes remains consistently high. The Economist has just named Copenhagen the world’s best city to live in, and according to the Numbeo database, Denmark holds an impressive third place globally in quality of life.
But it’s not only in terms of quality of life and lifestyle that we stand out. The Danish economy is exceptionally strong. Growth has been solid since the pandemic, employment reaches new records month after month, inflation is under control and the current account and public finances are among the strongest in the world. Few countries can boast of their government regularly announcing extra financial flexibility.
Building on this strong position, Denmark began its six-month EU presidency on 1 July – during a period of global political tensions, a new world order and major green and digital transitions. The presidency takes place under the slogan “A strong Europe in a changing world,” and the main Danish priorities fall under the headings: a more secure Europe and a more competitive and green Europe.
The Danish presidency is coordinated with Poland and Cyprus as part of the so-called trio programme, which ensures continuity in the EU’s overall political direction at a time when Europe faces massive challenges – particularly in the security area. Russia's war of aggression in Ukraine continues, while the situation in the Middle East remains volatile. This has highlighted the need for strengthened European defence cooperation.
After decades of underprioritising defence spending, many member states now need to rebuild their military capabilities substantially. While the Stability and Growth Pact’s exception clause offers some short-term budget flexibility, the jump in defence spending from 2% now to 5% of GDP in 2030 agreed at last week’s NATO meeting will strain public finances for years to come. Without major productivity gains across the EU, this massive spending increase will likely drive up both inflation and interest rates.
And with this, we arrive at the second pillar of the presidency’s priorities: the EU’s economic competitiveness, which has long been under pressure. Growth has, to put it mildly, been subdued since the pandemic, and the Draghi report, published last year, points to major structural weaknesses – particularly regarding productivity and investments. According to the report, the EU needs annual investments of EUR 750-800 billion – approximately double Denmark’s GDP – to compete with the US and China while also meeting the climate goals.
That’s why it’s encouraging that there finally seems to be genuine political will to take the report’s recommendations seriously. During its EU presidency, Denmark will focus on advancing key initiatives like the Capital Markets Union and establishing a Savings and Investment Union to help direct substantial European savings into productive investments. Additionally, Denmark will prioritise deregulation, simplifying EU legislation and strengthening the internal market as essential components in revitalising Europe’s economic growth.
A third central theme will be the EU’s trade policy. Both the US and China are challenging international rules, but Denmark will push for the EU to remain a defender of free, rules-based global trade. However, this commitment could face an early challenge on 9 July if (provisional) US-EU trade negotiations fall short of President Trump’s expectations. Among other issues, digital service taxes, which several EU countries, including Denmark, have implemented, could significantly impact relations between the EU and US.
In short, Denmark faces an exciting presidency ahead, culminating in the Copenhagen EU summit in early October. But it won’t just be a Copenhagen event. The opening ceremony is held tomorrow 3rd July in Aarhus with the Danish government, the royal family and the full EU Commission in attendance, while informal ministerial meetings are spread across Denmark – from Aalborg and Herning to Horsens and Frederiksberg.
And thus, beyond making a clear Danish imprint on the EU’s future, the presidency may also offer a chance to showcase all of Denmark to the global media.
Have a great summer – and good luck to the Danish presidency.