The ratings on the Kingdom of Denmark are underpinned by policymakers' longstanding commitment to fiscal discipline, a track record of prudent macroeconomic policies and structural reforms, and the country's rich and diversified economy. The government's fiscal flexibility is constrained, however, by a large general government sector and a relatively high level of expenditure as a proportion of GDP. To support growth and employment, the government loosened its fiscal policy in 2009 and 2010. This resulted in a deficit of 2.8% in 2009, and we expect further deterioration in 2010 with a deficit of around 5%. Denmark has historically posted general government surpluses, reaching 3% of GDP between 2005 and 2008. In contrast, we do not expect Denmark's deficit to reduce
