many of those who have left the labour force are self - supporting, such as unemployed who are not members of an unemployment fund and who do not receive cash benefits. others have left the country, for instance some of the migrant workers who came to denmark from eastern europe during the boom. in addition, the number of commuters, especially from germany and sweden, has fallen. on the positive side, there is a well - founded hope of spare capacity in the labour market to use when economic growth gains real momentum. moreover, it is encouraging to see that the number of people on permanent benefits has not shown any significant increase. there are indications that the supply of labour is now reacting more strongly than previously to economic developments. this is a positive feature in so far as it reflects greater flexibility in the labour market. it is important that the current cyclical reduction in the labour force does not lead to a rise in the number of people on benefit schemes. this could produce a knockon effect in the form of a more permanent increase in the number of people on transfer payments, and denmark is already at the upper end of that scale. this development could mean that it may take longer before registered unemployment is reduced to any significant degree. companies have not yet adapted fully to the drop in output. this means that they can increase production without hiring more people. and there are more to be hired outside the registered unemployment category. it is interesting to observe how much these unemployed people outside the registered unemployment category will contribute to dampening wage inflation. if the contribution is substantial, our previous estimate of registered structural unemployment may be on the high side, but it is still too early to draw any conclusions. * * * normally, consumer issues are outside the scope of danmarks nationalbank ’ s tasks, important and interesting as they may be. today, however, i would like to comment on the latest development in the market for financing of cooperative housing. some cooperative housing associations seem to have resorted to very risky sources of finance in recent years. i ’ m thinking of uncallable fixed - rate loans subject to rising interest rates during the term of the loan. technically, these loans are structured as adjustable - rate loans combined with an interest - rate swap. these loans do not accord with danmarks nationalbank ’ s opinion on the par rule that provides for redemption of a loan at a price close to 100. in addition, the loans seem to be a far cry from the mortgage sector ’ s declared objective of

nils bernstein : global recovery and the danish economic outlook speech by mr nils bernstein, governor of the national bank of denmark, at the annual meeting of the association of danish mortgage banks, copenhagen, 22 april 2010. * * * the global economy is on the mend. the latest indicators point to a faster recovery than previously expected. there is considerable regional variation, and it is likely to be a bumpy ride. the emerging and developing economies show the strongest growth. countries like china, india and brazil are now less affected by the economic crisis, while growth is more subdued in the old oecd countries, especially europe. global gdp contracted by 0. 6 per cent in 2009, the strongest fall in output since world war ii. for comparison, global growth peaked at more than 5 per cent before the slowdown set in. the crisis originated in the usa, but europe experienced the most severe setback. indeed, the recovery now seems to be stronger in the usa than in europe. the us business sector has once again demonstrated its adaptability. however, the main driver of the global economic recovery is the very accommodative economic policy. many countries have historically low monetary - policy interest rates and very high budget deficits. budget deficits of such magnitude may only exist for a relatively short period of a few years. most countries are facing a consolidation challenge in the coming years, and some have to start already this year. optimism about the global economy is only moderate because it is still uncertain whether the recovery will be self - sustaining. this means whether private demand will be able to take over when fiscal policies are tightened again. the global recovery is illustrated by the rebound in world trade after the strong drop. before the crisis, the limelight was on international imbalances, especially the large us currentaccount deficit and china ’ s equally large surplus. the crisis has not eliminated these imbalances, and the discussion of the exchange rate of the chinese currency should be viewed against that backdrop. the market focus has shifted to fiscal imbalances – sovereign risk has taken centre stage. the imf expects the government debt of the old oecd countries taken as one to reach 110 per cent of gdp by 2014. this is an alarming figure, but it covers considerable variation across countries. greece is an example of how slippery the slope can be if a country is too complacent for too long. but greece ’ s tribulations have also highlighted the eurosyst