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2022 DANISH ELECTION

Denmark poised to present new coalition government

Danish party leaders will on Wednesday present the agreement between the Social Democrats, Moderates and Liberals that forms the basis for a new three-party government.

Denmark poised to present new coalition government
The Danish prime minister's residence, Marienborg, from where the new government will be presented on Wednesday. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Denmark will finally have a new government six weeks after inconclusive elections with a left-right alliance forged after tortuous negotiations, prime minister Mette Frederiksen said Tuesday evening.

Frederiksen told reporters that the political alliance was “what our country needs”, following a narrow election victory for her Social Democrats in legislative elections on November 1st.

“Both because of the crises we face — inflation, war in Europe — but also because we have to make decisions that force us to look at things differently,” she said.

The new government team will be announced on Thursday, she said, “made up of the Social Democrats, the Liberals and the Moderates”.

She spoke to the press after informing Queen Margrethe of the alliance.

Frederiksen said the new government would have “a lot of compromises, but above all, a lot of ambitions”.

Earlier on Tuesday, the centre-left Social Liberal (Radikale Venstre) party, which was strongly tipped to be part of the new coalition government, quit negotiations at the final hurdle, citing policy differences over climate and children’s welfare.

READ ALSO: Denmark’s Social Democrats to be only ‘red bloc’ party in new centrist government

“We are in totally new and unchartered territory,” Robert Klemmensen, professor of political science at Lund University, told AFP.

“It’s extremely surprising — no one thought it would be possible to form this government.”

The last coalition government between the Social Democrats and the Liberals lasted just nine months, between 1978 and 1979.

But the Social Democrats — used to leading minority governments — are by far the largest party with 50 seats out of the 179 in Parliament.

While her government was largely hailed for handling the Covid-19 pandemic, the November election was triggered by the country’s so-called mink crisis.

The affair erupted after the government decided in November 2020 to cull the country’s 15 million minks over fears of a mutated strain of the novel coronavirus.

The decision turned out to be illegal, and the Social Liberal party propping up Frederiksen’s minority government threatened to topple it unless she called early elections to regain voters’ confidence.

The Social Liberals paid a price for the gamble, losing nine of their 16 seats.

In contrast it was the Social Democrats’ best election outcome in two decades, and allowed Frederiksen to enter negotiations from a position of strength.

Frederiksen and her Social Democrats had said even before the vote that they wanted to govern beyond traditional divisions.

They had to negotiate with the main Danish party on the political right, the Liberal Party, and the newly-formed centrist party, the Moderates, created by former prime minister Lars Løkke Rasmussen.

The Moderates won more than nine percent of votes and Rasmussen insisted he wanted to be “the bridge” between the left and right.

The far-right has heavily influenced Danish politics in recent decades — but three populist parties together won just 14.4 percent of votes and have had little influence on the negotiations.

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ECONOMY

KEY POINTS: What is in Denmark’s 2023 budget proposal?

Denmark’s coalition government presented on Thursday a new budget proposal in which it said it was “stepping on the brakes” on state spending.

KEY POINTS: What is in Denmark’s 2023 budget proposal?

Danish budgets are usually tabled and eventually adopted during the autumn, but last year’s election disrupted the normal timetable.

The proposed budget, given the title “A Responsible Way Forward” (En ansvarlig vej frem) was presented by ministers from the three coalition parties on Thursday: Finance Minister Nicolai Wammen, acting Defence Minister Troels Lund Poulsen and Culture Minister Jakob Engel-Schmidt.

A cautious economic approach to spending is needed given global circumstances including the war in Ukraine, inflation and last year’s energy crisis, Wammen said.

“Even though a lot of things look good when we look at the Danish economy, that doesn’t change where we are. Uncertain times,” he said.

Engel-Schmidt added that some might describe the proposed budget as “boring”, given that it “doesn’t bring a shower of presents”.

Key points from the proposed budget are outlined below. The proposal will go into negotiations with other parties in parliament before being voted through in its final form.

Inflation assistance to lower income groups 

Last year saw the highest inflation rate for 40 years in Denmark, and the effects will still be felt in 2023 even if the inflation percentages themselves are less severe.

Although the government wants to “step on the brakes”, it has still set aside 2.4 billion kroner for financial assistance to people vulnerable to rising prices.

Some 1.1 billion kroner will be spent on 5,000 kroner “cheques” for elderly persons who receive social welfare. People who have high medicine costs and students who receive subsidies because they must provide for others, such as single parents (SU-forsørgertillæg) are also among groups to be assisted with the inflation spending.

READ ALSO: Danish government agrees inflation package for vulnerable families 

‘Acute plan’ for hospitals

An agreement with regional health authorities on an “acute” spending plan to address the most serious challenges faced by the health services has already been agreed, providing 2 billion kroner by the end of 2024.

The agreement was announced by the government along with regional and municipal officials in February.

READ ALSO: What exactly is wrong with the Danish health system?

‘Lower than ever’ reserve fund

A so-called “negotiation reserve” (forhandlingsreserve), a pool of money in the budget that can be allocated at a later date based on agreements between parties, has been significantly cut to 200 million kroner.

A 2023 budget proposal from August last year, which was not adopted due to the election, had the fund at 600 million kroner. The reserve has been as high as 1.5 billion kroner in the past, according to broadcaster DR’s report on Thursday’s proposal.

The previous, single-party Social Democratic government was reported to favour mental health services and the elderly as areas which could benefit from the fund in 2023.

The lower amount is partly due to the shorter timescale of this year’s budget. The 2024 budget will be proposed and passed in late 2023 under the regular timetable.

“There are still things we can prioritise but we are asking you to take responsibility to get Denmark through while inflation is still a major challenge,” Wammen said.

Spending on courts system

Some 32.2 million kroner has been put aside to specifically target a reduction in waiting times for court dates, DR writes. The money is part of a larger amount, 185 million kroner, to be spent on the courts.

Denmark’s courts system has in recent years seen a rising number of criminal cases and lengthy processing times.

Broadband internet to get boost in rural spending

The “broadband fund” or bredbåndspulje will get an additional 100 million kroner to improve coverage in areas that still have patchy connection.

Another 100 million kroner will go into the landsbypulje or “Village Fund”, giving rural municipalities funding for demolition or renovation of deteriorated buildings.

Ukraine

A majority in parliament has already voted in favour of a seven-billion kroner fund in 2023 to help Ukraine defend itself against the Russian invasion.

The fund will be spent on Danish military, civilian and commercial assistance to Ukraine.

Part of the spending is funded by Denmark’s international development budget, while over 5 billion comes from spending an increased portion of the national GDP on the 2023 budget.

READ ALSO: Denmark announces seven-billion kroner Ukraine fund

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