He is the leader of the Liberal Party (Venstre), and heads a centre-right coalition of his Liberal Party and the Conservative People's Party which took office in 2001, and won its second and third terms in February 2005 and in November 2007. Like most Danish governments, this is a minority government which relies on the Danish People's Party for support. His government has introduced tougher limits on non-ECA immigration and froze tax rates before he took office (the "tax freeze", or "skattestoppet" in Danish). He has authored several books about taxation and government structure.
Under Fogh, certain taxes have been lowered, but the Conservatives repeatedly argue for more tax cuts and a flat tax rate at no higher than 50%. Fogh implemented an administrative reform reducing the number of municipalities (kommuner) and replacing the thirteen counties (amter) with five regions. Rasmussen has referred to this as "the biggest reform in thirty years". Furthermore, a reform of the police and judiciary systems is being implemented, changing the numbers of police districts and city courts from 54 to 12 and 82 to 22, respectively.
European political analysts have suggested that he could become the first president of European Union, "European George Washington".
He has held numerous positions in government and opposition throughout his career, first winning a seat in the Folketing (Danish parliament) in 1978. From 1987-1990 he was Minister for Taxation and from 1990 Minister for Economy and Taxation in the Conservative-led Poul Schlüter government. In 1992 Rasmussen resigned from his ministerial posts after a court of inquiry had decided that he had deliberately provided the Folketing with inaccurate and incomplete information. Rasmussen disagreed with the findings of the commission, but faced with the threat of a non-confidence motion, he decided to leave his posts voluntarily.
Rasmussen held the rotating presidency of the European Union from July to December 2002 during which period he proved his dedication to a pro-EU agenda and the guiding principles of the Ellemann-Jensen doctrine. He even pursued it to its logical conclusion by publicly denouncing the Danish collaboration policy during its second World War occupation, being the first Danish prime minister ever to do this. While his predecessors may not have been in favour of it, they had all implicitly maintained that it was 'a good thing', because it had saved Danish lives.
During the EU presidency he was involved in a curious episode with then Italian Premier Silvio Berlusconi. In a joint press conference on 4 October 2002 Silvio Berlusconi said: "Rasmussen is the most handsome prime minister in Europe. I think I will introduce him to my wife because he is even more handsome than Cacciari". Massimo Cacciari is an Italian philosopher and centrist politician opposing Berlusconi, and some gossip tabloids had alleged an affair between him and Berlusconi's second wife Veronica Lario. Rasmussen was puzzled by this remark and Berlusconi quickly told him he'd explain later.
Rasmussen wrote the book Fra socialstat til minimalstat (literally: From social state to minimal state) in 1993, in which he advocated an extensive reform of the Danish welfare system along classic liberal lines. In particular, he favors lower taxes and less government interference in corporate and individual matters etc. In 1993 he was awarded the Adam Smith award by the libertarian society Libertas, partly due to his having written Fra socialstat til minimalstat. However, after becoming Prime Minister, Rasmussen has distanced himself from his earlier writings and has announced the death of liberalism during the national elections of 2005. Commonly regarded as being inspired by the previous success of Tony Blair, Rasmussen now seems more in favour of the theories of Anthony Giddens and his third way. There was talk in Libertas of revoking Fogh Rasmussen's award as a result of this, though this never happened.
As Prime Minister, Rasmussen strongly supported the 2003 Iraq War. As in most European countries he faced considerable opposition, both in the parliament and in the general population. Subsequent opinion polls suggested the Danish population's opinion was split on the issue. One vocal protester managed to get into the Danish parliament during the period before the war, where he poured red paint on the prime minister while yelling "Du har blod på dine hænder" (literally: "You have blood on your hands"). In the months after the initial phase of the war, Danish troops participated in the multi-national force stationed in Iraq. Approximately 550 Danish troops were stationed in Iraq from 2004 and into 2007, first at "Camp Dannevang" and later at "Camp Einherjer", both near Basra. When the contingent of troops left around August 2007, it was not replaced and Denmark has shifted its focus to non-military support around Baghdad. The official reason being provided is that the Iraqi government should now be able to handle the security in the Basra area. Critics of Fogh Rasmussen argue that the withdrawal was motivated by a decreasing domestic support for the war.
In 2004 Rasmussen's government came under attack based on questions of how much intelligence it had with regard to Iraqi weapons of mass destruction. The government held hearings, and was forced to publish classified reports it had consulted about the likelihood of banned weapons existing in Iraq. While the Blair and Bush administrations have been the subject of criticism for extended periods because of their reliance on questionable intelligence, Rasmussen has managed to stay clear of this potential government crisis. This is probably largely because the motion passed by parliament (Folketinget) authorising the deployment of Danish troops states as the reason for the deployment Iraq's continued refusal to cooperate with UN inspectors in violation of the UN Security Council's resolution. The Danish deployment of troops was thus not formally based on a claim that Iraq had WMD's.
In a comment to the media Anders Fogh Rasmussen stated as one of the reasons to support a military intervention, “Irak har masseødelæggelsesvåben. Det er ikke noget vi tror. Vi ved det. Irak har selv indrømmet, at det har haft sennepsgas, nervegas, miltbrand, men Saddam vil ikke afregne. Han vil ikke fortælle os, hvor og hvordan de våben er blevet destrueret. Det ved vi fra FN's inspektører, så der er ingen tvivl i mit sind.” “Iraq has WMDs. It is not something we think, it is something we know. Iraq has itself admitted that it has had mustard gas, nerve gas, anthrax, but Saddam won't disclose. He won't tell us where and how these weapons have been destroyed. We know this from the UN inspectors, so there is no doubt in my mind.”
The Danish Defence Intelligence Service (FE) had produced a classified report stating that it had no absolute proof of WMDs in Iraq. Rasmussen had access to this report and used it in other parts of his decision making. Since the presence of WMDs in Iraq has now been refuted, Rasmussen has focused almost exclusively on the tyrannical nature of Saddam Hussein's regime.
A former FE analyst, Major Frank Grevil, was sentenced to four months in prison for leaking the information to the press. Grevil argues that Rasmussen has either lied about or misunderstood the content of the secret reports in his presentations to the parliament.
This tax stop has been under heavy fire from the parties on the left wing of Danish politics, allegedly for being "antisocial" and "only for the rich". Since the tax stop also freezes the tax of real property (da. ejendomsværdiskat, 1%), it is beneficial to the homeowners in the densely populated regions that have experienced an extraordinary increase in the prices of real estate. The tax of real estate is actually limited at a nominal level — not at a relative level. While the rate was one percent when the tax stop was enacted, the actual tax is much less today when the last few years' large increase in property value (+20%/p.a. in large cities) is taken into account. The Danish Economic Council has criticized this as unfairly benefiting current homeowners.
Even though the total tax burden is marginally higher in 2005 than it was in 2001, the tax stop is very popular among the voters. Thus, in January 2005, the Social Democrats announced that it accepts the principle of a tax stop until at least one right-wing party is willing to participate in a tax reform.
The tax stop has, however, been ineffective, judging by Venstre's own intentions. The goal of the tax stop was to halt the growth of public expenditures (and halt the growth of taxes), but even with their cuts in public spending (which has been considered aggressive by the political left wing), public spending has continued to rise by approximately one percentage point above inflation each year.
From 2004 and onwards, minor tax cuts came into effect, on two accounts:
Venstre has so far refrained from making statements on the future of the "top tax" (da: topskat) of 15%, and the VAT (da: moms) of 25%.
Although his party's support was reduced from the 2001 election, resulting in the loss of four seats, Venstre was able to maintain its coalition after the election through gains by other parties, and on February 18 Rasmussen formed the Cabinet of Anders Fogh Rasmussen II.
Rasmussen received the most "personal votes" ever of any politician in the Folketing (Denmark's Parliament) with 61,792.