Denmark adrift on a sea of debt, but optimism -- and oil -- offer a buoy
The streets of Copenhagen are lined with shrines to disposable income. Every few doors along the narrow downtown side streets are small, pricey specialty shops selling antique furniture, ornate, continental china, and roll after roll of hand-woven Oriental rugs.Skip to next paragraph
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The devotees here pay homage less often these days. Disposable income in Denmark is in uncertain shape.
"Turnover dropped by 25 percent in the last year," begins Guy Basse in an abrupt outline of finances at Bjoern Wiinblad hus, a shop selling the high-priced decorative artistry of Bjoern Wiinblad.
"Nothing over 1,000 Danish Kroner [$167] is sold," he says. "Not to Danes."
Driving through the city, he points to one antique dealer after another going out of business. His wife, he says, with a doctoral degree in Orientology, has the largest collection of Oriental rugs in Scandinavia. "She's going broke as well."
The sales of expensive things are among the first to register the hard side of currency devaluations, 22 percent value-added taxes, adn shrinking real incomes.
In the face of financial uncertainty, the Danes retain their own distinctive brand of optimism. One shop manager, in a crystal arcade of fine Swedish and Finnish glassware, said he hadn't yet felt the pinch of shrinking consumption. "Let's hope it doesn't come," he smiled.
Some think his words echo Denmark's national mood itself during the past decade. Danes have been aware of their problems for years, they say, but can't get one another to take them seriously.
Foreign borrowing has snowballed into a debt worth over 25 percent of last year's gross domestic product. Made heavier every year by rising international interest rates, the national debt now sits center stage in the Danish economy.
But the Danes -- four-fifths of whose families make around $24,000 a year -- havent't wanted to give anything up, a longtime observer says. So Denmark drifts cheerfully on a sea of debt.
The attitude may be changing now, at least to some extent. After its members lost between 3 and 4 percent in real income last year, the central trade union confederation settled on wage guidelines a month ago that are expected to mean another 1 or 2 percent decline.
More important, unemployment is the highest in Scandinavia, 7.5 percent, and expected to climb to 8 percent by the end of this year.
The options are running thin. Danes say there has been a general sense in the country that there is nothing anyone --politicians especially -- can do about their problems.
"We all know that it is impossible to continue this way for long, but no one knows the alternatives," mourns Charles Schultz, director of the Gallup Institute, a conservative polling firm.
"No one knows what we can do. I don't know myself what we can do." He shrugs , throwing up his hands. "But we can't pass this burden on to our children; it's an impossible thing to consider."
There may yet be something of a reprieve on the Danish horizon -- oil and gas from the North Sea to the west of Jutland. Until now, Denmark has imported 100 percent of its energy. The cost is the biggest millstone around the country's economic neck.