Denmark warned on government finances

Denmark needs to undertake significant efforts to reverse the deterioration of the government's structural financial position, Moody's said Tuesday in a credit analysis on the Scandinavian country.

While Moody's noted that Denmark's Aaa rating, with stable outlook, reflects relatively healthy public finances and proactive official policy making, it also emphasized the Danish government's financial position has been weakened by the effects of a lengthy economic slowdown and official policy responses to it.

"The country's banks are also undergoing continued stress now that the government's guarantees and other support programs have been phased out," the credit rating agency said.

Several Danish banks have collapsed in the wake of the financial crisis, and Denmark has taken a harder line than other European countries in ensuring that taxpayers won't have to bail out banks in any future crises.

Source: Wall Street Journal