Council Recommendation on Denmark's economic, social and budgetary policies

The European Commission has recommended a Council Recommendation on Denmark’s economic, social, employment, structural and budgetary policies (COM(2026)204 final), based on the Commission’s 2026 country report published on 3 June 2026.

• Main action: The Commission requests the Council to adopt a Council Recommendation calling on Denmark to continue adhering to Council-set maximum growth rates of net expenditure (with flexibility under the national escape clause for higher defence expenditure), and sets out six specific recommendations for 2026-2027 including: (1) fiscal discipline while using escape clause for defence; (2) sustain RRF and cohesion policy implementation; (3) support SMEs’ innovation and scale-up financing; (4) accelerate electrification and upgrade the electricity network; (5) address skills shortages; (6) increase housing supply by simplifying planning and land-use rules.
• Background and key facts: The recommendation follows the 2026 country report (3 June 2026) and the Council decision allowing activation of the national escape clause for 2025-2028. Key figures cited include net expenditure growth of 7.3% in 2025, projected 6.7% growth in 2026, general government surplus 2.9% of GDP in 2025 (projected 0.9% in 2026), general government debt 27.9% of GDP in 2025, defence expenditure 2.2% of GDP in 2025 (projected 2.6% in 2026), renewables providing 92.4% of net electricity generation in 2025, and the electricity tax cut for households from 72.7 øre to 0.8 øre per kWh (temporary, two years). The report flags that grid capacity is under severe strain due to demand from data centers, Power-to-X projects and battery storage.