Н I S Т о R Yl 53 In keeping with the prevailing political climate over the rest of Europe, the prescription for Denmark's economic malaise was seen in spending cuts, not sparing the social services, and an extension of taxation into previously untapped areas such as pension funds. A four percent ceiling was set on wage increases. The government failed to win a sufficient majority in the folketing ami an early election was called for January 1984. The goverment was returned, and felt the public had given it a mandate to continue its policies, which it did until the call for a snap election in 1987.? The result was a significant swing to the left. The centreright coalition lost seven seats and the Social Democrats, despite losing two seats, became by far the largest party in the folketing. The People's Socialists fared extremely well, finishing with 27 MPs. Schliiter resigned as prime minister but was then asked to form a new government after being nominated to do so by six of the nine party leaders within the folketing. His failure to consult nongovernment parties in seeking a majority was regarded as highly irregular but not unconstitutional. He made an informal agreement with the Progress Party in order to gain a singleseat working majority in the folketing. Three of the four seats lost by the Conservatives had gone to the Progress Party, who espoused tax cuts and immigration curbs. Their former leader, Mogens Glistrup, was returned to the folketing and announced his intention to be prime minister in "five to ten years". The main surprise was the emergence of a new party, the Common Course, led by a former leader of the Seamen's Union, Prabber Hansen. The Common Course gained four seats with policies claimed to be leftist but actually encompassing a strange leftright mix. While opposing membership of NATO, they are also pledged to taxcuts and "keeping Denmark for the Danes". A further election, in May 1988, largely served to affirm the new Schliiterled government, if only, perhaps, because of the apparent lack of any workable alternative. ¦ The current political scene Though traditionally a reluctant member of the EC, Denmark was carried into the European Exchange Rate Mechanism (or ERM, widely viewed as the first step towards a single European currency) by Prime Minister Schliiter at the start of the 1990s, a move that transformed the Danish economy into one of the strongest in Europe and made its inflation rate the lowest of any EC member. The price for this, however was soaring unemployment and further cuts in publi' spending. The outcome of the referendum on the Maastricht treaty (the blueprint for Europee political and monetaty union) in June 1991 however, provided an unexpected upset to the Schliiter apple cart. Despite calls for a "Yes" vote not only from the government but also from the opposition Social Democrats, 50.7 percent of Danes rejected the treaty severely embarrassing the prime minister and sending shivers dc.