DENMARK passed a milestone yesterday when it cleared its foreign currency loans for the first time in at least 183 years.
This does not mean the country is without debt, but rather that its debt is denominated in Danish currency, the krone.
From our perspective, this should provoke head-scratching and, in time, maybe influence how we order our affairs. Ireland owes around €185bn — America owes $20 trillion — but for a country with a little more than two million people in work, an over-dependence on tax from foreign companies and significant pension commitments, this is a substantial figure.
Denmark and Ireland have a lot in common. Neither country is overburdened with natural resources; there are 5.6m people living in Denmark, 4.6m in this Republic. They have their own currency and live under a high-tax regime. We tick neither of those boxes. Denmark’s overall debt-to-GDP ratio is 38%, ours is 65%. These figures suggest that no Irish person alive today will do what all Danes did yesterday — live in a country with no foreign currency debt obligations. Why? What do Danes do that we cannot?
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