The Danes' counter-example

Additional stimulus hasn't caused bond yields to rise in Denmark. They're in the EU and have their o

Denmark's new three-party coalition government has announced that the primary aim of its economic policy is to secure a balance between revenues and spending and create growth by bringing forward public investment. The new Danish prime minister, Helle Thorning-Schmidt, who is Neil Kinnock's daughter-in-law, unveiled her coalition cabinet on Monday and indicated that her government would take a radically different approach from the austerity measures being adopted by other European countries. The new Danish government apparently intends to spend ten billion Danish kroner to upgrade roads, railways and bicycle paths. The stimulus agenda also includes plans to provide temporary tax credits for companies that invest in R&D and machineries along with new technologies. It said it also aimed to carry out a tax reform that would significantly reduce taxes on wage incomes.

This is a very interesting counter-example to George Osborne's and David Cameron's claims that austerity is crucial to keep bond yields low. This is what Cameron said in the rapidly revised part of his party conference speech yesterday, that in a draft version that was circulated told people to save -- when he really meant he wanted them to spend.

When you're in a debt crisis, some of the normal things that government can do, to deal with a normal recession, like borrowing to cut taxes or increase spending -- these things won't work because they lead to more debt, which would make the crisis worse. Why? Because it risks higher interest rates, less confidence and the threat of even higher taxes in future. The only way out of a debt crisis is to deal with your debts. That's why households are paying down their credit card and store card bills. It means banks getting their books in order. And it means governments -- all over the world -- cutting spending and living within their means.

Cameron's speech -- even the corrected final version -- gets it precisely the wrong way round. The only way out of a debt crisis -- if by debt crisis we mean, as he says, a situation where households are desperately trying to pay down debt because on an individual level this is rational -- is for the government to step in and spend more, at least temporarily. For the government to join in and try to save more too, which he argues is logical, is disastrous. A first-year undergraduate course in macro-economics should have taught him that!

What has happened in Denmark -- which, just like the UK, is not in the euro but is a member of the European Union? It is a nice test case, because if Dave is right -- which he isn't -- then bond yields should have soared in Denmark, even on talk of injecting stimulus. They haven't. Here is a selection of yields on ten-year government bonds for Denmark and the UK over the past couple of months or so.

  Denmark UK
05/10/2011 2.005 2.354
30/09/2011 2.069 2.427
23/09/2011 1.932 2.363
09/09/2011 1.975 2.456
02/09/2011 2.204 2.641
19/08/2011 2.362 2.606
12/08/2011 2.573 2.753


One argument the coalition has made is that the US has lower yields because the dollar is a reserve currency, so their data isn't relevant: currently their yield is 1.888 per cent. But that does present the government with a further problem, because bond yields in Sweden, which is also in the EU but not in the euro, are 1.695 per cent. They are 2.135 per cent in Canada, which is also not a reserve currency, and a paltry 0.879 in Switzerland, which really does look like a place of safety.

Based on the evidence from Denmark, putting additional stimulus into the economy has not caused bond yields to rise and they remain below those in the UK. The Danes are a much better comparison country than the Greeks, the Portuguese, the Italians or the Spanish that don't have their own central bank and currency as the Danes do; just as we do.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Are you ready to comply with the EU GDPR?

Alan Calder, the founder and executive chairman of IT Governance, discusses the EU General Data Protection Regulation (GDPR) and how your organisation can achieve compliance.

The EU General Data Protection Regulation (GDPR) will supersede the UK Data Protection Act 1998 on 25 May 2018, introducing new obligations for all organisations that process the personal data of EU residents.

The GDPR introduces significant changes in the areas of data subject and child consent, privacy by design, data breach notification, international data transfers and data protection officers, among others.

With the prospect of multi-million pound fines for non-compliance, and less than two years until the Regulation is enforced, organisations in the UK should urgently be considering what they need to do to comply.

The skills and resources required under the GDPR

The GDPR requires certain organisations to appoint a data protection officer (DPO). The role of a DPO includes informing and advising the controller and processor of their data protection obligations, monitoring the organisation’s compliance and performance, providing advice on data protection impact assessments, and giving due regard to risks associated with data processing operations. DPOs must have the legal and information security knowledge and skills necessary to help organisations achieve compliance with the Regulation.

As an expert in information security and data protection compliance, IT Governance has developed Europe’s first certified EU General Data Protection Regulation Foundation and Practitioner training courses to help individuals who are involved in data protection or who are looking to fulfil the role of data protection officer in order to achieve compliance with the Regulation. The certified training programme is designed to equip individuals with a comprehensive understanding of the GDPR requirements and a practical guide to planning, implementing and maintaining compliance with the GDPR.  

Inform GDPR transition planning through data flow mapping and gap analysis

An important first step in achieving compliance with the GDPR is to review your organisation’s data flows. A data flow audit will allow your organisation to map the locations of all personally identifiable information (PII), gain visibility over your data flows, develop effective strategies to protect PII, improve data lifecycle management and introduce efficiencies into your processes, and reduce privacy-related risks. 

Organisations that plan to comply with the GDPR but that lack visibility over their data flows are encouraged to conduct a data flow audit. The process involves mapping out the organisation’s data flows to get a comprehensive understanding of the sources from which the data flows. IT Governance can help organisations prepare for the GDPR with an extensive data flow audit that will enable you to identify the measures, policies and procedures needed to reduce the risk of a data breach.

Implement technical and organisational measures with ISO 27001

ISO 27001 is the international best-practice standard for information security management and encompasses three essentials aspects: people, processes and technology. The Standard is designed not only to defend your company against technology-based risks but also to prevent common security issues such as those caused by lack of staff awareness around current threats or ineffective information security procedures.  

Moreover, the GDPR clearly states that “the controller and the processor shall implement appropriate technical and organisational measures to ensure a level of security appropriate to the risk”. These measures relate to personal data encryption and pseudonymisation; access and availability of data; the confidentiality, integrity and availability of processing systems and services; and regular assessment and evaluation of technical and organisational measures to ensure the security of processing.

An ISO 27001-compliant information security management system (ISMS) is founded on an enterprise-wide a culture of information security, led by the board. It necessitates that your organisation’s information security strategy be constantly monitored, updated and reviewed, and this process is amenable to helping you implement the technical and organisational measures of the GDPR.   

ISO 27001 can help you meet parallel GDPR and NIS Directive requirements

The NIS Directive, which is set to come into force at the same time as the GDPR, is designed to help organisations within the EU achieve a common level of security across their networks and information systems. The Directive applies to organisations providing essential services in sectors such as finance, energy and transport, as well as digital service providers.

Similar to the GDPR, the NIS Directive requires a robust ISMS and encourages a security culture. As a result, more and more organisations preparing to comply with both the GDPR and the NIS Directive are also seeking certification to ISO 27001. The Standard contains information security requirements that, when met, can allow your organisation to centralise and simplify your compliance efforts for the NIS Directive and the GDPR.

IT Governance’s ISO 27001 packaged solutions can help you tackle your organisation’s GDPR and NIS Directive compliance requirements as well as implement a robust  ISMS. The ISO 27001 packaged solutions provide a unique blend of expertly developed tools and resources that complement your organisation’s skills and resources at a fixed price and in a timely manner.

To find out more about GDPR compliance or ISO 27001 packaged solutions please visit (, email, or call us on +44 (0)845 070 1750.

Alan Calder is the founder and executive chairman of IT Governance.