t growth. The pro-business Civic Democratic
Party-led government approved reforms in 2007 designed to cut
spending on some social welfare benefits and reform the tax system
with the aim of eventually reducing the budget deficit to 2.3% of
GDP by 2010. Parliamentary approval for any additional reforms could
prove difficult, however, because of the parliament's even split.
The government withdrew a 2010 target date for euro adoption and
instead aims to meet the eurozone criteria around 2012.

Denmark
The Danish economy has in recent years undergone strong
expansion fueled primarily by private consumption growth, but also
supported by exports and investments. This thoroughly modern market
economy features high-tech agriculture, up-to-date small-scale and
corporate industry, extensive government welfare measures,
comfortable living standards, a stable currency, and high dependence
on foreign trade. Unemployment is low and capacity constraints are
limiting growth potential. Denmark is a net exporter of food and
energy and enjoys a comfortable balance of payments surplus.
Government objectives include streamlining the bureaucracy and
further privatization of state assets. The government has been
successful in meeting, and even exceeding, the economic convergence
criteria for participating in the third phase (a common European
currency) of the European Economic and Monetary Union (EMU), but so
far Denmark has decided not to join 15 other EU members in the euro.
Nonetheless, the Danish krone remains pegged to the euro. Economic
growth gained momentum in 2004 and the upturn continued through
2007. The controversy over caricatures of the Prophet Muhammad
printed in a Danish newspaper in September 2005 led to boycotts of
some Danish exports to the Muslim world, especially exports of dairy
products, but the boycotts did not have a significant impact on the
overall Danish economy. Because of high GDP per capita, welfare
benefits, a low Gini index, and political stability, the Danish
living standards are among the highest in the world. A major
long-term issue will be the sharp decline in the ratio of workers to
retirees.

Dhekelia
Economic activity is limited to providing services to the
military and their families located in Dhekelia. All food and
manufactured goods must be imported.

Djibouti
The economy is based on service activities connected with