However, being a satellite – and not the core – within the European exchange-rate cooperation, the fiscal policy in Denmark has to be at least as prudent – if not even more – if a credible fixed-exchangerate regime is to be maintained.
In a moment, I'll outline how this framework works to mitigate the effects of shocks, facilitate the adjustment process, and promote sound economic performance. But first, let me discuss some of the major global forces that have been affecting the Canadian economy.