This thoroughly modern services market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, a stable currency, and high dependence on foreign trade. Denmark is a net exporter of food and energy and has a comfortable balance of payments surplus and zero net foreign debt. Also of importance is the sea territory of more than 105,000 km² (40,000+ sq mi).

The Danish economy is highly unionised; 75% of its labour force are members of a trade union.[21] Most trade unions take part in the organised umbrella system of trade unions, the biggest umbrella organisation being the so-called LO, the Danish Confederation of Trade Unions. However, an increasingly larger part of the labour force choose not to become members of a trade union or to become members of one of the trade unions outside the organised system (often referred to as the yellow, in Danish gule, trade unions).

Relationships between unions and employers are cooperative: unions have a day-to-day role in managing the workplace, and their representatives sit on most companies’ board of directors. Rules on work schedules and pay are negotiated between unions and employers, with minimal government involvement. The unemployment rate March 2007 was 3.9%, for a total of 106,600 persons. The number of unemployed is forecast at 65,000 in 2015. The number of people in the working age group, less disability pensioners etc., will grow by 10,000 to 2,860,000, and jobs by 70,000 to 2,790,000.[22] Parttime jobs included. Because of the present high demand for but lacking supply of skilled labour, especially regarding factory, transport, building and construction jobs, in addition to hospital nurses and physicians, the annual average working hours have risen, especially compared with the economic downturn 1987 – 1993.

Danish notes and coinsDenmark’s national currency, the krone (plural: kroner), is de facto linked to the Euro through ERMII. Currently (March 2007) exchanges with American dollars at a rate of about USD 0.18 per krone (about 5.60 kroner per dollar).

The government has been very successful in meeting, and even exceeding, the economic convergence criteria for participating in the third phase (a common European currency) of the Economic and Monetary Union of the European Union (EMU), but Denmark, in a September 2000 referendum, reconfirmed its decision not to join the then 12 of the 15 other EU members in the euro (UK and Sweden being the others of the EU not to do so).

The welfare model is the general term for Denmark to organise and finance their social security systems, health services and education. The principle behind the welfare model is that benefits should be given to all citizens who fulfil the conditions, without regard to employment or family situation. The system covers everyone; it is universal. And the benefits are given to the individual, so that e.g. married women have rights independently of their husbands.

In the area of sickness and unemployment, the right to benefit is, however, always dependent on former employment and at times also on membership of an unemployment fund, which is almost always -but need not be- administered by a trade union, and the payment of contributions; however the largest share of the financial burden is still carried by the central government and financed from general taxation, not in the main from earmarked contributions.

The State is involved in financing and organising the welfare benefits available to the citizens to a far greater extent than in other European countries. For that reason the welfare model is accompanied by a taxation system which is both broadly based (25% VAT and excise) and with high income tax rates (minimum tax rate for adults is 38%, and 60% if you fail to provide your tax card to your employer). The tax freeze introduced by the Anders Fogh Rasmussen government has ended the upward drift in municipal income tax rates, but the number of people in the top income tax bracket still grows. This of course is also true for the number of people in the lowest income tax bracket.

The benefits given are more generous than in the British Beveridge model — and in combination with the taxation system this brings about a greater redistribution than in the Bismarck model, which is aimed rather at maintaining the present status. For the past three years Denmark has ranked first on the Economist Intelligence Unit’s “e-readiness” list. “A country’s ‘e-readiness’ is a measure of its e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities.”