The scandal has been costly for Denmark and the international dimension of the incident has begun to increase.
EU authorities handled the issue at the General Affairs Council Monday and focused on "respect for beliefs".
After Libya closed down its representative office in the Danish capital Copenhagen, Palestinians protesting the cartoons raided an EU office in Gaza and an Iraqi group demanded attacks be instigated against Danish targets.
Saudi Arabia recalled its ambassadors to Copenhagen and the boycott against Danish products quickly spread to other Gulf countries and Egypt as well.
The boycott negatively affected the Danish economy from the very first day.
The dairy company, Arla Foods, has halted all exports to the Middle East and is considering laying off employees as it is losing around 1.3 million euros a day in lost sales.
Arla, unable to sell goods in the country, was forced to close its factory in Riyadh yesterday and halted the construction of its new factory. The pharmaceutical products of Novo Nordisk, selling 30 million euros annually, were removed from pharmacy shelves. Danish goods were also removed from stands in Kuwaiti markets, and the United Arab Emirates joined the boycott chain yesterday.
The organization of Muslim Brothers, the main opposition in Egypt, called for a boycott against Danish goods.
Marianne Carstenskiold from the Danish Industrialists Association said they are helpless, "We want to conduct dialogue with the region, but even if the problem is solved, it will take time to return to the old days."
The boycott also negatively affects Muslims living in Denmark. Some Danes have demanded via messages sent the local SMS network, "Do not buy anything from the restaurants and shops belonging to Muslims.".
The developments have caused many unwanted incidents.
Two Arla workers were beaten in Saudi Arabia and the EU office in Palestine was over taken by an armed group. The supporters of al-Fatah who raided the office demanded an apology from Denmark and Norway. The armed group called, Jaish al-Mujaheeden, called on its supporters to attack Danish and Norwegian targets. The Norwegian government had apologized when the Norwegian newspaper, Magazinet, reprinted the cartoons from Jyllands Posten. Scandinavian countries have asked their citizens not to travel to the Middle East.
The EU Commissioner for Commerce, Peter Mandelson, emphasized they will seek action from the World Trade Organization (WTO) if Saudi Arabia supports the boycott.
Austrian Foreign Minister Ursula Plassnik stated after the EU General Affairs Council gathering yesterday, "With the help of freedom of expression and the press, some basic religious values should not be humiliated in order to find a solution."
The EU High Representative, Javier Solana, stressed religious values should be respected and no religion should be humiliated."
Danish Prime Minister Anders Fogh Rasmussen, backing the insulting cartoons published in Jyllands Posten on the grounds of "freedom of expression," said he did not approve of the cartoons adding, "I would never approve of the portrayal of Prophet Mohammed, Jesus or any other person in a humiliating way."
Rasmussen remarked that the government "will try its best to deal with the unfortunate events," while he continued to avoid making an official apology.
Danish companies make 2 billion euro turnover
The Islamic world produces an income of two billion euros for Denmark.
The country's leading cheese and butter producer, Arla's annual exports to Gulf countries reaches 400 million euros.
The Danish pharmaceutical firm, Novo Nordisk, and Danpo Chick and Grundfoss Water Pump companies export large amounts of goods to the region. Denmark's most fundamental trade partners among Muslim countries include the United Arab Emirates, Saudi Arabia, Iran, Malaysia, Turkey, Egypt, and Indonesia. Saudi Arabia tops the list with 300 million euros in exports; while Turkey imports 280 million euros annually from Denmark.