Denmark is a Scandinavian country in Northern Europe bordering the Baltic and the North Sea. The country consists of a large peninsula and many islands referred to as the Danish Archipelago. Neighboring countries include Germany, Norway, and Sweden. Denmark has a strategic location controlling the Danish Straits that link the Baltic and North Seas. The government system is a constitutional monarchy; the chief of state is the queen, and the head of government is the prime minister. Denmark boasts a modern market economy in which the prices of goods and services are determined in a free price system. Denmark is a member of the European Union (EU).