Faroe Islands. A dispute over the Faroe Islands'
relationship with Denmark threatened during the year to lead
to new elections. The Social Democrats left the government
coalition in June because of budget disagreement, cuts in
the public sector and decision-making issues. An underlying
conflict was that the Social Democrats wanted to see a more
independent Faroese relationship with Denmark. At the end of
November, the Social Democrats, together with the other
opposition, pushed through a constitutional commission,
assisted by a political committee, to revise the law
governing relations with Denmark. The government coalition
with the Conservative Party's Edmund Joensen at the
forefront opposed legislative changes. The economic crisis
in the Faroe Islands was somewhat mitigated during the year,
with about one percentage point reduction in unemployment
and a slight increase in fish exports.