what happened in the oil crisis in 1973 in Denmark??

Question

and what was denmark's view on it..what did the government do in that time

Answer 1

The 1973 oil crisis led to a serious international recession, which also had a negative impact on Danish production and employment. Again, both the Liberal government in 1974 and the new Social Democratic government in 1975 attempted to counteract this downturn through fiscal policy adjustments.

As a temporary measure, VAT was lowered from 15% to 9.25% in 1975-1976, for example, but an improvement in international trade conditions remained elusive, and the result was a further deterioration in the current account, which had shown a deficit since 1963. This led to a new change in economic policy.

Fiscal policy was tightened slightly, while an attempt was made to reduce the demand for imports through measures such as energy savings in the construction sector and increased public service, which brought about strong growth in employment, but a corresponding deterioration in public finances.

The second oil crisis
The second oil crisis came in 1979. Among the consequences were rising inflation and interest rates. The current account deficit grew further and employment fell, which led to a change in the exchange rate policy.

Consequently, the DKK was devalued twice in the autumn of 1979 within the framework of the EMS, but economic activity nevertheless fell in both 1980 and 1981. The decade from 1973 to 1982, known as the period of stagflation, was thus characterised by low economic growth, averaging less than 2% a year and a relatively high wage inflation of over 13% a year on average.