Political life in Denmark is orderly and democratic. Political changes occur gradually through a process of consensus, and political methods and attitudes are generally moderate. Growing numbers of immigrants and refugees throughout the 1990s, and less than successful integration policies, however, have in recent years led to growing support for populist anti-immigrant sentiments in addition to several revisions of already tight immigration laws, with the latest revision taking effect July 1, 2002.

The Social Democratic Party, historically identified with well-organized labor movement but today appealing more broadly to the middle class, held power either alone or in coalition for most of the postwar period except from 1982 to 1993. From February 1993 to November 2001, Social Democratic Party chairman Poul Nyrup Rasmussen led a series of different minority coalition governments, which all included the centrist Social Liberal Party. However, with immigration high on the November 2001 election campaign agenda, the Danish People's doubled its number of parliamentary seats; this was a key factor in bringing a new minority right-of-center coalition government into power. The coalition consists of the Liberal Party ("Venstre") and the Konservative Party, with the parliamentary support of the Christian People's Party and the Danish People's Party, and holds 72 of the 179 seats in the Folketing.

The vulnerability implicit in a minority coalition has been evidenced on occasion, but the tradition for broadly based budget agreements has been the rule rather than the exception. However, since last November, the new government has carried through most of its agenda on narrowly based agreements with the Danish People's Party. Consensus decisionmaking is the most prominent feature of Danish politics. It has often allowed the small centrist parties to play a larger role than their size suggests but not so after the November 2001 election.

Since the 1988 elections, which led to a domestic truce on North Atlantic Treaty Organization (NATO) and security questions, Denmark's role in the European Union (EU) has come to be a key political issue. Denmark emerged from two referenda (June 2, 1992, and May 18, 1993) to the Maastricht Treaty on the European Union (May 28, 1998) with four exemptions (or "opt-outs"): common defense, common currency, EU citizenship, and certain aspects of legal cooperation, including law enforcement. However, the Amsterdam Treaty was approved in a Referendum May 28, 1998, by a 55% majority. Still, the electorate's fear of losing national identity in an integrated Europe and lack of confidence in long-term stability of European economies run deep. These concerns were at the forefront of the September 28, 2000 referendum on Denmark's participation in the third phase of the Economic and Monetary Union, particularly the common currency, the euro; more than 53% voted "no," and Denmark retained its "crown" currency unit.