Prime Minister 1993–2001
Rasmussen came to power in early 1993 when then-Prime Minister Poul Schlüter resigned after an inquiry found that he had misinformed the Folketing about the so-called Tamil Case. A coalition of Social Democrats, Social Liberals, Centre Democrats and Christian Democrats, Rasmussen's first cabinet made use of limited classical Keynesianism in connection with the so-called kick-start of 1993–94 as its economic policy. The Christian Democrats left the coalition after their defeat in the 1994 Folketing election, as did the Centre Democrats in late 1996. Key ministers were Economy and Deputy Prime Minister, Social Liberal leader Marianne Jelved, Finance Minister Mogens Lykketoft (Social Democrats) and Foreign Minister Niels Helveg Petersen (Social Liberals).
The centre-left coalition only narrowly held on to its parliamentary majority in the 1998 Folketing election. After the election Prime Minister Rasmussen stated that the government's first order of business was to secure a "yes" vote in the upcoming referendum on ratification of the Amsterdam Treaty between the member states of the European Union. Eventually there were 55% "yes" votes in the Danish Amsterdam Treaty referendum. Rasmussen's government later presided over the 2000 referendum on Danish participation in the euro, in which participation was rejected by 53.2% of the vote. A 1998 initiative, dubbed the Whitsun Packet (Danish: Pinsepakken) from the season it was issued, increased taxes, limiting private consumption. It was not universally popular with the electorate, which may have been a factor in the Social Democrats' defeat in the 2001 parliamentary election.
Rasmussen called an early election in 2001, saying this would give the next prime minister time to prepare for Denmark's upcoming presidency of the European Union in 2002. The patriarchal role Rasmussen had built for himself since the 11 September attacks had gained him and the Social Liberals their highest poll ratings in years, a lead that would be eroded in the buildup to the election.
He was up against Liberal leader Anders Fogh Rasmussen. The campaign focused mainly on immigration and refugees, which worked to the benefit of the anti-immigration Danish People's Party. Two in every three Danes now supported tighter immigration restrictions, compared to only one in two before 11 September. In the last few days of the campaign a number of predominantly left-leaning artists and intellectuals urged the Danish electorate not to vote for a rightwing government, warning that the Danish People's Party would then be likely to wield great influence on government policy.
Other campaign focuses were on welfare and health care. Poul Nyrup Rasmussen stated the aim of creating a more robust economy to deal with the economic downturn. There was little debate about the European Union as the two leaders' opinions on that subject were largely the same. The loss of power in the 2001 election to Anders Fogh Rasmussen's Venstre meant that the Social Democrats lost their position as the largest party in the Folketing, a position they had held without interruption since the 1924 Folketing election. On election night Rasmussen vowed to stay on as party leader, famously declaring, "I will not run away with my tail between my legs." He announced an effort of "renewal" within the Social Democrats, urging the promotion of centrist party members to leadership positions. Influential factions opposed Rasmussen's efforts, calling his leadership into question, and in late 2002 he announced that he would be stepping down as chairman.
