June 06 2019 / by Andreas Birnstingl / MarketPro
Granular EU: The Danish vote
"The Dane is a skeptic, because Denmark’s history is the story of the downfall of a powerful tribe." (Johannes V Jensen, 1873-1950; cited in TV-series Borgen, S02E07)
The citation above is from Jensen, a major Danish author who won the Nobel Prize in Literature in 1944 and became famous for his novel "The Fall Of A King". His comment about the Danish people was described as an indictment of Danish indecision and a lack of vitality. However, when it comes to elections, this comment is anything but accurate when describing Danish people. Here are our thoughts on the recent Danish national elections in the land of the Dannebrog, as the Danish flag is called.
Denmark has a variety of different parties and is known for the surprising political maneuvers between them. The variety of parties and the necessary negotiations and compromises between them were prominently featured in the famous political TV-series Borgen, the Danish—if not to say European—equivalent to the American version of House Of Cards.
In the last national elections in Denmark in June 2015, for the first time since 2001, the Social Democrats came in first. But their informal party coalition, the "Red" bloc (Social Democrats, Red–Green Alliance, The Alternative, Social Liberals, and Socialist People's Party) could not gain a majority in parliament. Within an hour of the election result being declared, the “Reds” were outsmarted by the Venstre-leaded “Blue” bloc (Venstre, Liberal Alliance, Conservative People's Party, Christian Democrats, and the far-right-wing Danish People's Party) which was granted the ability to form a new government. However, after being unable to compromise on various issues between the parties forming the Blue bloc (mainly with the Danish People’s Party on migration issues), the leader of Venstre had to finally form a minority government.
In the elections yesterday (5 June), the "Red" bloc won a majority in parliament but things have changed since the previous election. This time, the Social-Democrats are proposing a controversial approach towards migration and it seems that another minority government—now led by the Social-Democrats instead of Venstre—is the most likely outcome.
What is interesting for us economists at World Data Lab, is that in the 2015 national elections, many municipalities in the regions Sydjylland and Zeeland voted in favour of the right-wing populist Danish People’s Party which is interesting because our tool MarketPro shows that it is these two regions (together with Nordjylland) where the spending power capabilities of people are lowest.
When comparing annual spending power per capita of Denmark with its closest neighbors (Germany and Sweden), Denmark lags behind. In 2019, the average Dane is capable of spending $20,455 (in 2011 USD PPP), a Swede $22,171 and an average German $24,849. Germans have the highest spending power in Europe in terms of national average. By 2035, the respective consumption power of these three countries will increase to $24,696, $27,041, and $30,705, representing an average annual growth rate of 1.11%, 1.17%, and 1.25% between 2019 and 2035.
The spending power outlook looks rather different on a more granular level (NUTS 2). When comparing the three countries’ capitals, Copenhagen (Hovedstaden region) is second in terms of spending power after Stockholm. In 2019, people living in Copenhagen have on average $23,693 per year to spend and this is expected to increase to $26,506 by 2035, representing an annual increase of 0.6%. People in Stockholm currently have $27,836 ($31,773 by 2035; 0.78% growth), and in Berlin $20,064 ($24,042; 1.07% growth).
In the other Danish regions, people in Sjælland (Zeeland), the region southwest of Denmark’s capital have on average $19,545 per year to spend ($21,871; 0.66%), Sydjylland (Southern Denmark) $18,408 ($24,073; 1.59%), Midtjylland $19,544 ($26,481; 1.80%), and Nordtjylland $17,192 ($19,197; 0.65%). The south of Denmark is expected to have relatively high annual growth rates while Zeeland lags behind.
As Zeeland is economically connected to the south of Sweden (Sydsverige) and since Sydjylland has the same relationship with the northernmost region of Germany (Schleswig-Holstein), a comparison of these regions is worthwhile. On average, people in Sydsverige have $20,466 to spend in 2019, which will increase annually by 1.11% to $24,678 by 2035; people in Schleswig-Holstein currently have $21,757, which is expected to increase annually by 1.02% to $25,854 by 2035.
The best performing Danish region according to our data, is Midtjylland. In 2019, it is on par with Zeeland, but will overtake Sydverige by 2025, Schleswig-Holstein by the end of 2033, and will be competing with the Danish capital by 2035. So, if potential consumption power is the only indication of where to move in Denmark, it’s the Central Denmark Region which includes the city of Århus, the second largest city after Copenhagen with a population of around 300,000.
May 25 2019 / by Andreas Birnstingl / MarketPro