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BUSINESS

Danish government advised to cut 58 business support schemes

Some 58 of 200 existing state support arrangements for businesses should be partly or fully cut, an expert advisory group has recommended to the government.

Danish government advised to cut 58 business support schemes
Denmark's business minister Morten Bødskov will discuss proposed cuts to funding schemes with parliament. Photo: Ida Marie Odgaard/Ritzau Scanpix

The cuts would save 2.3 billion kroner by 2030, according to estimations by the expert group, which handed over its recommendations to the government on Monday.

The coalition government pledged in its policy paper when it took office in late 2022 to save two billion kroner on business support money or erhvervsstøtte.

It subsequently appointed an expert group to look into the matter. That group has now recommended measures including revoking a tax exemption for work on board ships registered on the Danish Maritime Authority’s international ships register.

A number of subsidies can also be removed from export and investment schemes, it said.

Organisations including tourist board Wonderful Copenhagen as well as a foundation supporting vegan food, Plantebaserede Fødevarer, should also lose state support, the recommendations state.

Schemes which benefit climate goals are targeted to a lower degree in the recommendations.

The expert board’s report will now be discussed by the government and other parties in parliament, Business Minister Morten Bødskov said in a statement.

“The government is yet to form an opinion on the expert group’s recommendations. We will now read the report thoroughly and will in the near future summon the parliamentary parties for talks on the recommendations,” he said.

The Confederation of Danish Industry (DI) said the government should be cautious about cutting support for businesses but said a review of existing schemes was sensible.

“Bit it is important to stress that business subsidies are not a container from which you can pull unlimited resources and that consideration is needed when making adjustments, especially in relation to international competitiveness,” DI’s political director Emil Fannikke said in a comment to news wire Ritzau.

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BUSINESS

Maersk profits plummet as Yemeni attacks close off Red Sea route

Danish shipping giant Maersk posted a huge drop in net profit for the first quarter on Thursday as Yemeni rebel attacks are forcing it to avoid the vital Red Sea route.

Maersk profits plummet as Yemeni attacks close off Red Sea route

Maersk reported a net profit of $177 million in the first three months of the year, a 13-fold drop from the same period last year. Turnover fell 13 percent to $12.4 billion, slightly lower than forecast by analysts surveyed by financial data firm FactSet.

The company, however, raised its outlook for the full year, citing higher demand and increased rates and costs due to the supply chain disruptions in the Red Sea.

It now expects an underlying core profit ranging between $4 billion and $6 billion, up from $1 billion-$6 billion previously.

“We had a positive start to the year with a first quarter developing precisely as we expected,” Maersk chief executive Vincent Clerc said in a statement.

“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” he said.

“This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.”

Iran-backed Huthi rebels, who control the Yemeni capital Sanaa and much of the country’s Red Sea coast, have launched dozens of attacks on ships since November, claiming solidarity with Palestinians caught up in the Israel-Hamas war.

The United States in December announced a maritime security initiative to protect Red Sea shipping from the attacks, which have forced commercial vessels to divert from the route that normally carries 12 percent of global trade.

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