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Danish prices could leave ‘thousands’ of homeowners unable to pay bills

An analysis by an organisation representing Danish banks has concluded that the effects of inflation and high energy prices could leave thousands of people in Denmark struggling to pay bills in 2023.

Published: 5 December 2022 16:17 CET
Danish prices could leave 'thousands' of homeowners unable to pay bills
An interest organisation for banks in Denmark has concluded that many homeowners and others with high overheads could struggle to pay bills in 2023. Photo: Kristian Djurhuus/Ritzau Scanpix

Increasing interest rates are a third factor that could makes bills harder to pay for many households next year, according to the analysis by banks’ interest organisation Finans Danmark, reported by broadcaster TV2.

Higher monthly overheads are set to continue in the foreseeable future, according to the analysis, in which Finans Danmark calculated expected disposable incomes for people living in Denmark in 2023.

According to the organisation, two in three families who own their own homes face extra costs of between 1,500 and 5,000 kroner per month.

Families with expensive heating systems – such as those in homes heated by individual gas heaters – could face paying between 2,500 and 6,000 kroner more each month.

READ ALSO: Danish Energy Agency advises homes with gas heating to conserve

Families most vulnerable to high energy bills and interest rates on their loans could pay as much as 4,500 to 9,500 kroner more per month. Around 120,000 families fit with this description, according to Finans Danmark.

“We are concerned. I don’t ever recall previously seeing a change to an outside circumstance, such as gas prices, which has eaten up so much money from Danish households,” the organisation’s CEO Ulrik Nødgaard told TV2.

Analysts have recently predicted that economic conditions will result in a higher number of people being out of work in Denmark next year.

“It’s obvious that when people are spending money on interest and gas that there is less money for other things, and demand in society will therefore fall, and subsequently something will happen to employment,” Nødgaard said.

Many families in Denmark will be able to cope with increased costs, however, he also said. That is because households will be able to fall back on savings in some cases.

The Finans Danmark CEO also told TV2 that there is a “need to consider targeted solutions in relation to helping the weakest,” in reference to the impact of high costs on people with the lowest incomes.

Banks are ready to help customers who are struggling, he said.

“We would basically like to help people through this. Banks have already reached out to their customers and said: ‘If you think things are looking difficult, pick up the phone and contact us, and we’ll find solutions,” he said.

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COST OF LIVING

Will Danish farming emissions tax mean more expensive meat?

Denmark’s government has reached an agreement with the agricultural and conservation sectors that is likely to see an emissions tax on farming. Will it affect the price of meat?

Published: 25 June 2024 16:26 CEST
Will Danish farming emissions tax mean more expensive meat?

Why is Denmark introducing an emissions tax on agriculture? 

The government has announced an agreement with interest organisations for both agriculture and nature conservation, which is likely to see the introduction of a world-first CO2 emissions tax on farming.

The agreement, which has been months in the making, would make Denmark the first country in the world to impose an emissions tax on its agriculture sector.

Various groups have agreed that the agriculture industry will, from 2030, pay a tax of 300 kroner per ton on its CO2 emissions. The tax will rise to 750 kroner in 2035.

A Danish CO2 agriculture tax has long been the goal of the coalition government but has faced resistance from farmers and from some opposition parties, as well as from interest organisations for the sector.

With the agreement, Denmark can meet its target of a 70 percent reduction in emissions by 2030, Tax Minister Jeppe Bruus said at the briefing.

“This is the last political agreement needed for us to reach our 70 percent target in 2030. It’s a landmark,” he said.

A combination of a tax on livestock, reduction of fertiliser use, reforestation and extraction of carbon-rich low-lying soils will reduce emissions, the government says.

Its implementation is likely but not certain: Parliament has begun its summer recess, meaning the government, which has a wafer-thin majority, must wait until autumn to table the necessary bill to pass the agreement into law. It is expected to try to persuade opposition parties to back the deal to give it a stronger majority.

READ ALSO: Denmark announces agreement on landmark CO2 tax for agriculture

Will it affect the price of meat? 

The short answer is ‘yes’, going by comments given by Minister for Economic Affairs Stephanie Lose to national broadcaster DR.

A price rise of 1 krone per packet of minced beef can be expected as a consequence of the agreement, Lose said.

That comes despite Prime Minister Mette Frederiksen saying during the 2022 general election campaign – when the CO2 tax was a prominent topic – that Danes should not pay extra for their shopping as a result of such a tax.

“A single mother with three children who play football makes spaghetti bolognese. I don’t want to place extra taxes on what I consider completely normal food products,” Frederiksen said at the time.

Lose said she was aware of the PM’s comments from two years ago but that the cost increase was a small price to pay for the landmark deal.

“In 2030, a packet of minced beef will cost 1 krone more for 500 grams in the supermarket,” the minister said to DR.

“I think that 1 krone reflects that we are now taking some huge decisions that will make a difference for Danish climate, for our nature and for our aquatic environments,” she said.

She also referred to tax cuts implemented by the current government which gave “completely normal Danes more cash in hand”.

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