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Denmark - 1920-1929 - Liberalism to Intervention

The election in April 1920 brought in a Liberal government supported by the Conservative People’s Party. The new government faced difficulties as a result of the post-war crisis which affected both agriculture and industry and created almost chaotic conditions within the banking sector; several banks collapsed, including Scandinavia’s largest bank, the Landmandsbank, which had to be bailed out by the government in 1922. The crisis was aggravated by a premature revaluation of the krone. The 1920s were plagued by high unemployment which peaked between 1922-1923 and 1925-1928, and by large-scale labour disputes.

In 1924, the Liberal government was succeeded by the country’s first Social Democratic government with the strong and gifted tactician Th. Stauning as Prime Minister. Stauning’s government also ran into problems, especially as regards the currency. During the big industrial conflict in 1925, the government prepared state intervention; in the event, however, no action was taken. A comprehensive crisis programme regrettably failed the following year and the government, which lost its majority at the next election, was succeeded by the Liberals.

The new Prime Minister was the very liberalistic Th. Madsen-Mygdal, who planned to tackle the crisis by cutting down on public expenditure, introducing tax reductions and intervening in the labour market. Both agriculture and industry were greatly modernised despite the economic problems; amongst other things, the Ford Motor Company set up Europe’s first assembly plant for cars in Denmark.

The 1920s were also characterised by ideological differences. The farmers and the Liberals were in favour of liberalism, whilst the workers and the Social Democrats called for greater power to the State, a wish which was to some extent shared by the Conservative People’s Party. At times, these differences seemed to turn into a confrontation between town and country.

In matters of foreign policy, the 1920s were a quiet decade. The country was not threatened by any of the big powers. Denmark participated in the sanctions by the West against the Soviet Union until 1924 when it recognised the Communist government. In 1920, Denmark became a member of the League of Nations. Like the other Nordic countries, Denmark’s policy of neutrality did not accord with the League of Nations’ collective security system which would involve the country in a conflict with an aggressor.

The League’s disarmament plans, however, were welcomed by a majority of the Danish population. Even so, it was still a defence issue which toppled the government in 1929, when the Conservatives, led by John Christmas Møller, abstained from voting on the Budget because of their objections to the defence appropriations. The Conservatives were joined by the Social Liberals who equally abstained from voting, whilst the Social Democrats actually voted against.

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Page last modified: 22-07-2013 18:53:40 ZULU