Denmark's election: is the Left clawing its way back?

The centre-left Social Democratic Party scored a victory in yesterday's closely-watched general election in Denmark, ending the 10-year reign of a conservative coalition that had been moving steadily further and further to the right.

The campaign of the centre-left coalition, called the 'Red Bloc', was centred around a promise to raise taxes on the country's investment banks and wealthiest citizens, reversing a trend of decreasing corporate taxes led by the previous government. The victory for this message is a stinging rebuke to the current austerity crusade dominating the governments of Europe. The Social Democrats, led by Helle Thorning-Schmidt (pictured above), promised to actually expand Denmark's welfare system, which is already one of Europe's largest. They have also promised to use the proceeds from increasing taxes on investment banks and the wealthy to improve roads, schools and hospitals.

So is this a sign that Europe's hobbled left may be on it's way back? Are voters across Europe growing tired with the messages of the right and ready to turn to a new direction? Or are the circumstances of this change in direction limited to Denmark?

US tells Europe 'we won't protect you forever'

Defence departments across Europe are bristling this week following the stern tongue-lashing delivered by outgoing US Defense Secretary Bob Gates last Friday. In a speech here in Brussels Gates lashed out at European nations for their weak military spending and their lack of troop commitments to the North American Treaty Organisation (NATO).

It was the clearest signal yet that the days of this military alliance, set up to defend Western Europe during the cold war, may be numbered. Gates implied the alliance may come to an end unless European countries agree to restructure it into an equal partnership rather than a US-led military fiefdom. Oddly enough, it is America that wants to see an end to the current state of US military dominance in Europe, and it is the Europeans who are resisting this.

"For the better part of six decades there has been relatively little doubt or debate in the United States about the value and necessity of the transatlantic alliance," he told the NATO dignitaries. "For most of the Cold War US governments could justify defense investments and costly forward bases that made up roughly 50 percent of all NATO military spending.  But some two decades after the collapse of the Berlin Wall, the US share of NATO defense spending has now risen to more than 75%"

A return to walls in Europe

There's something rotten in the state of Denmark, and the rot is spreading fast throughout the European Union. Brussels is in shock today following yesterday's announcement by Denmark that it will reintroduce border controls with neighbouring Sweden and Germany.

The move is a violation of the bloc's Schengen passport-free rules and a worrying sign as EU ministers meet in Brussels today to discuss possible changes to the Schengen rules. The plan would set up the first border control between Sweden and Denmark in more than 50 years.

The move is no doubt intended as a pre-emptive strike ahead of today's negotiations, a message to the EU that if the ban on internal border controls isn't loosened member states are going to ignore it and unilaterally re-impose passport checks. Denmark likely feels confident enough to take this bold unilateral move because of the letter sent to the European Commission by Nicolas Sarkozy and Silvio Berlusconi two weeks ago.

The letter demanded that member states be allowed to reimpose internal EU borders in "exceptional circumstances." They believe that the current increase in migrants trying to come to Europe from North Africa qualifies as one of these circumstances. Denmark clearly feels that this letter from two large member states gives them cover to unilaterally impose their own border control. It is the first country ever to reimpose permanent border checks in the history of the Schengen Zone, and there is now fear of a 'chain reaction' that would see the reintroduction of controls at all internal borders.

Denmark may join the euro before the summer

It might seem counter-intuitive given the ongoing tremors within Europe's common currency, but believe it or not Denmark is considering holding a referendum on joining the euro in the next few months. Though Danes rejected joining the common currency in 2000, the country's prime minister said yesterday that they may give it another shot. And poll numbers indicate that this time it could succeed.

All EU countries are required to join the euro eventually, but Denmark and the UK have an opt-out from this requirement. But, as is the case with so many EU opt-outs, Denmark is actually a pseudo-member of the eurozone. Because Denmark is in the European Exchange Rate Mechanism, its currency is pegged to the euro. So essentially, Denmark is already on the euro, it just uses different pieces of paper. But because it doesn't technically use the euro, it can't take part in eurozone decisions. And now that Angela Merkel and Nicolas Sarkozy are pushing for the creation of Eurozone decision-making body, the situation has become quite undesirable for Denmark. It will be affected by the decisions made in this new body, but it won't be able to join it. And that is why, despite the eurozone trouble, this might be exactly the right time for Denmark to join the euro.