Institutional setup and practices

The economic councils are presided by a joint chairmanship. The members of the chairmanship are independent economic experts, usually university professors. The chairmanship is formally appointed by the Minister for Economic Affairs. The chairmen are appointed for three-year periods that can be extended. The chairmanship is often referred to as the "economic wise men".

The other members of the councils represent different institutions in the Danish society (unions, employer organisations, the Government etc.). These members are nominated by the respective institutions and organisations and appointed by the Minister for Economic Affairs.

The institution is financed by the general budget. 

Reports and meetings at the councils

The chairmanship prepares a report for each meeting in the councils.

The Reports for the  Economic Council contain economic analyses and policy recommendations on general economic policy as well as a short- and medium-term forecasts on key figures on the Danish economy. On top of this, the reports also contain thorough analyses on issues such as labour market policies, distribution, the welfare state or the EMU. The reports for the Economic Council also includes the chairmanships evaluation of the objectives of the fiscal policy - eg. the compliance with the national budget law, compliance with the EU rules, and an evaluation of the long term fiscal sustainability.

The reports to the Environmental Economic Council contain analyses on issuses on environmental ecnomics - e.g. energy policy, climate policy, transport sector etc.

A preliminary version of the reports is presented to and discussed by the members at the meetings of the two councils. The Economic Council meets twice a year, and the Environmental Economic Council meets once a year. The reports are published right after the meeting has been held. In a final version of the reports comments by the members of the council are added.

The reports are in Danish, but include an English summary.

The chairmanships role

The chairmanship has sole responsibility for the reports. Thus, topics and methods are chosen by the chairmanship, and it is the chairmanship that concludes. By tradition, the chairmanship acts in consensus. 

In practice, the chairmanship represents the councils publicly, but the view of the chairmanship does not necessarily represent the individual members or the organisations they represent. Formally, it is the aim of the institution to "achieve consensus". However, in reality this is not an easy task given the issues taken up and given the diversity of interests represented in the council. However, the chairmanship aims at giving the policy makers the most realistic and objective picture of the relevant trade-offs, e.g. how much will inequality increase by imposing reforms that increase efficiency?

The chairmanship generally has no formal role to play in relation to economic policy, but aims at providing policy makers with the most economically well-founded basis for making decisions. By providing thorough economic analysis and policy relevant assessments, the chairmanship contributes to the Danish public debate on economic policy issues.

The independence of the chairmanship and the secretariat is not questioned in practice. The independence is however solely based on tradition. Formally, the chairmanship is appointed by the Minister for Economic Affairs, but by tradition new members is appointed after nomination by the incumbent chairmanship.

As a matter of tradition the chairmanship presents the reports to the relevant standing committees at the Danish parliament. These presentations are given at closed meetings.

Fiscal Watch Dog, National Productivity Board, and the Governments assessments

Besides presiding the two eonomic councils, the chairmanship has a couple of additional tasks.

One of these is acting as the "fiscal watch dog". The chairmanship is by law obliged to give an annual assessment of public finances, including assessing whether fiscal policy is on a long-term sustainable path or not.

The assessment of the chairmanship is usually published along with the reports for the Economic Council. The Government has (except in special cases) no legal obligation to react. However, in reality the Government has to comment and clarify if they have a different view - a kind of informal "comply-or-explain"-clause.

Another task of the chairmanship is the acting as a "national productivity board". The chairmanship is by law obliged to monitor and analyse productivity related issues. These analyses are presented in seperate reports, which are not presented directly to the councils.

Finally, the chairmanship has been given the task to assess the assumptions used by the Danish ministries in the preparation of ex-ante assessments of economic policy measures. These ex-ante assessements are a vital element in the basis for decision making in the design of economic policy.