Denmark Free of Foreign-Currency Debt for the First Time in 183 Years

Eshe Nelson (Mar 20, 2017) - Today marks a milestone for Denmark, centuries in the making. The Danish government will repay a $1.5 billion loan (pdf), freeing it from foreign-currency debt for the first time in at least 183 years. This record probably stretches back even further, since Denmark first raised a loan in a foreign currency back in 1757, when it borrowed in Hamburg and Amsterdam, the central bank said. (The records are spotty, so it is unclear whether the country was ever foreign debt-free before 1834, when data collection became more robust.)

The last time Denmark was this close to ridding itself of foreign debt was the late 1890s, when these obligations were worth less than 1% of GDP. But low European interest rates at the time made financing projects like new railways more attractive with foreign debt, so the borrowing restarted. In recent history, issuing external debt has been a means to ensure sufficient foreign-exchange reserves. After Denmark pegged the krone to the deutsche mark, and later the euro, starting in the late 1970s, market interventions have been used to adjust the krone’s value, which require reserves of foreign currencies to buy and sell. 

Joining Norway and Germany in the ranks of
foreign-currency debt free nations.

Now, Denmark joins neighbors Norway and Germany in the ranks of countries with no foreign-currency government debt. Fellow Scandinavian nation Sweden, meanwhile, maintains about 30% of its government debt (pdf) in foreign currencies. It’s not unusual, nor undesirable, for countries to issue some foreign debt to build currency reserves; the US treasury owes about $1 trillion in foreign currency debt. Issuing debt in dollars will become less attractive as US interest rates rise, but many countries—especially in emerging markets—still find it more affordable than borrowing in local currency subject to much higher rates.

For its part, Denmark’s government still has some 465 billion kroner ($67 billion) in debt, which amounted to 23% of GDP at the end of last year, low by international standards. Around 40% of this debt is held by foreigners, who from now on will only get paid back in kroner.

Fertility Rate, Life Expectancy and the Solar Cycle

Source: Huffington Post

Scientists at the Norwegian University of Science and Technology in Trondheim looked at the age of death of individuals born in Norway between 1676 and 1878 and compared the data to solar activity data. In addition to showing that individuals born during a solar maximum tended to die younger, the comparison showed that fertility was reduced in certain women born in years with high solar activity. In an unusual study, Norwegian scientists claim people born during periods of solar calm may live around five years longer than those born when the sun is feisty. They argue peak solar activity brings higher levels of ultraviolet radiation to Earth, which may increase infant mortality by degrading folic acid, or vitamin B9. Both of these are key to rapid cell division and growth that happens during pregnancy. The lifespan of those born in periods of solar maximum was 5.2 years shorter on average than those born during a solar minimum. High solar activity at birth decreased the probability of survival to adulthood,' thus truncating average lifespan.  

Source: Gine Roll Skjærvø, Frode Fossøy and Eivin Røskaft (2015) - Solar activity at birth predicted infant survival and women’s fertility in historical Norway. In: Proceedings of the Royal Society, Biological Sciences 282.