From 1978 to 1979 he was Minister of Foreign Affairs of Denmark and from 1982 to 1984 Minister of Finance and Deputy Prime Minister. From 1978 to 1984 he was chairman of the Danish liberal Venstre party.
In 1985 he was European Commissioner for Budget, financial control and for Personnel and Administration. In 1989, he gave these offices and became Vice President of the Commission and Commissioner for Economic and Monetary Affairs. In 1995 he resigned from these positions.
He was a member of the European convent. From December 1998 to 1 January 2007, he was chairman of the Energy Charter Treaty.