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February 19, 2014 at 08:20 PM
Denmark’s prime minister got a shock after winning parliamentary approval for a consortium made up, in part, of Danish pension funds and led by Goldman Sachs to purchase 18% of government-owned Dong Energy. Six of her cabinet ministers abruptly resigned and the Danish population is flocking to sign a petition against the action.
The country’s strong independent streak has made it a euro-skeptic. While it is a member of the European Union, Denmark is no carbon copy of its fellows. In 2000, its population voted against adopting the euro to replace the krone, although its currency’s value is pegged to the euro. The country’s attitude is longstanding; Danes also voted against ratification of the Maastricht Treaty because of its articles proposing monetary union and a common European defense force. Denmark had to be granted exemptions from both provisions before the treaty was finally approved.
The country has taken exception to Europe’s way of doing other things, as well. Its policies on immigration have tightened over the last several years, to the point that some say they exceed accepted requirements elsewhere in Europe. Apparently, the criticism has taken its toll; currently looser regulations are set to take effect later this year.
But a strong economy that weathered the global turndown relatively well, coupled with a strong social safety net, has kept unemployment low—although higher than usual for Denmark, at 6% it compares favorably with the rates in other EU countries—and provided a degree of comfort to its citizens regarding health care and education that have made it the envy of other nations and a popular destination for immigrants seeking a better life.
Denmark’s energy policy, too, is progressive, geared toward making the country 100% reliant on renewable energy by 2050—a goal it’s well on its way to meeting. Its wind power generation capability is increasingly exceeding 100% of the country’s needs as tracked on its real-time power sector overview website. In fact, it’s able to export wind energy to its neighbors when more than 100% capacity is reached.
Perhaps that’s why the population got so stirred up at the thought of an outside agency taking control of its power utility. Prime Minister Helle Thorning-Schmidt was unprepared for the reaction to the sale. One party left her coalition government over the issue, leaving the strength of her remaining allies in doubt.
The vision of Goldman Sachs controlling the country’s energy grid, in however small a degree, has not sat well with Danes, despite the firm’s declaration that it regards the $1.5 billion purchase as a long-term investment and that it will support current management’s strategies. Dong was in need of an infusion of cash and was in fact in the process of restructuring. And, should Goldman’s declaration be true, the flap over energy production may turn out to be a tempest in a teapot.
