One of the strangest effects of the current strike involving more than one in 10 Danes has been the incredible demand for yeast. Yeast has become the Danish gold. For some reason, known only to a select few, the scares about bread shortages have led to a run in yeast purchasing.

On Monday, enough yeast was sold to bake six million loaves. More was sold in one day last week than is normally sold over three weeks. Since then it's been virtually impossible to get your hands on this prized bread-riser.

One shopkeeper from Jutland drove to Germany and bought more than one ton. He had not even put it on the shelves before it was sold out. And one of the national newspapers is offering two packets of yeast as a prize for the best story about the strike.

On a more serious note, as workers gathered yesterday to mark Labour Day, the effects of the strike - over pay and holiday entitlements - were worsening.

An increasing number of hospitals are now taking only emergency cases. On the island of Zealand, where Copenhagen is situated, petrol will run out by the end of the weekend.

Already in the city centre petrol stations have closed and this will become more commonplace as the strike continues. Then the only way to get fuel is to seek a dispensation from the union.

Food shortages in many areas have left supermarket shelves bare. Soon many shops will have to close. The airport is closed and flights are being diverted to Malmo in southern Sweden. From there passengers must get a ferry across the Oresund to Copenhagen.

Due to striking cleaners many of the nation's schools have been ordered shut by health inspectors. In Jutland there has even been talk of a rationing of change as the national bank has been unable to deliver to some of the regional banks.

Perhaps most serious of all for this large beer-drinking country is the possibility that bars will have to shut unless agreement is reached and deliveries are made. For many Danes the thought of a beer shortage is too unpalatable to imagine.

All this in a country which only last month was placed second in a league table of relative wealth within the EU. According to Eurostat, the EU statistics office, only Luxembourg has a higher GDP per head.

On an international scale the damage to the economy will take time to calculate. However, in a country which has twice as many pigs as people, the strike has had a detrimental effect on bacon exports. Earlier in the week, farmers were running out of feed and their lobby groups had to seek a dispensation for animal feed or begin a mass cull.

As for exports, Danish farmers fear that as the strike drags on foreign markets will look to the neighbouring Netherlands for bacon supply.

The events of the last week have left many surprised that as we approach the 21st century, industrial action could have such a devastating effect on a developed society like Denmark.

The current situation sees two strong Danish characteristics go head to head. The first is organisation, of which the Danes are truly proud. Few countries have managed to create such a successful social and economic structure as Denmark.

Yet it is this talent which has led to the current predicament. The whole of Danish business life is marked by the residual spirit of the guild system. Every trade is organised. No one who is not a properly qualified bookseller can open a bookshop, and no publisher will sell his books except through an accredited bookshop. This modern-day feudalism has resulted in a strong and powerful unionised workforce.

The second Danish characteristic in play at present is their expectation of high standards in goods and services. They expect the trains to run on time, the streets to be clean and the tradespeople to know their business.

Danes are not afraid to complain and do not accept bad service or shoddy goods uncomplainingly. However, this week these high standards have given way to the power of organisation.

Despite the economic mayhem and relative suffering, Danes remain supportive of the strikers. In an independent poll carried out for Jyllands-Posten, one of Denmark's national papers, 50 per cent expressed sympathy with the strikers' cause, with 39 per cent calling for them to accept the employers' offer of an 8.5 per cent pay increase and one day's extra holiday.

AND yesterday, as temperatures reached 20C, there remained a carnival atmosphere as people gathered for the May 1st events. One cannot but feel sympathy for the leader of the Socialist Party, Poul Nyrup Rasmussen.

In March everything was going his way. Re-election as Prime Minister and a third term in office. Spirits were high. Even the approaching referendum on the Amsterdam Treaty seemed to be going his way. The anti-treaty forces were in disarray.

Two months on and it's all going wrong. He finds himself caught in the middle of a crippling national strike not of his making.

There is, however, a faint glimmer of light at the end of the tunnel. On Thursday a small group of Copenhagen bus drivers was able to reach agreement with management over a package under which they receive an extra three days' paid holidays a year.

No one knows what is currently on offer in the negotiations but union and management continue to meet and the refusal by negotiators to talk to the media is being seen by many as a sign that progress is being made. However, even the most optimistic observers see no end in sight before next Friday, which is also a public holiday.

If agreement is reached the settlement must be put to a vote by the workers. They already rejected the first deal which led to the current strike. And as the Danish people have demonstrated before on the Maastricht Treaty, they have no fear of saying no.

There is also one last hope for Denmark. In the basement of Kronborg Castle, the setting for Shakespeare's Hamlet, resides the statue of the mythical warrior Holger Danske sleeping on a chair. Legend has it that if Denmark's sovereignty is threatened Holger will awake and do battle for Denmark.

If nothing else works, they can always try to wake him up.