Danish government presents ‘corona war chest’ 2021 budget proposal

Danish government presents 'corona war chest' 2021 budget proposal
Danish finance minister Nicolai Wammen. Photo: Emil Helms/Ritzau Scanpix
The main aim of the 2021 budget in Denmark will be to get the country’s economy back on track following the coronavirus crisis, finance minister Nicolai Wammen has said.

Wammen presented the proposed budget at a press briefing on Monday.

“We want to get the Danish economy going after the coronavirus crisis and we want to ensure that the health service is equipped to cope with corona. As such, this is a very different budget than we are used to. There is less money for other initiative because of the coronavirus crisis,” he said.

“Fighting unemployment and protecting Danish businesses and Danish jobs is vital in this budget,” the minister added.

As part of the announcement, the government said it would earmark 9.2 billion kroner as a “war chest” to manage economic fallout of the pandemic.

The money will be available to fund a vaccination programme and to help export businesses amongst other needs, Wammen said.

Climate remains a priority for the government, Wammen also said. 750 million kroner has been budgeted for green research while 200 million kroner over four years will be spent on nature and biodiversity, according to the proposal.

Parliamentary allies the Social Liberals and Socialist People’s Party have criticised the proposal for not doing enough on climate, however.

“It’s sensible to set aside billions for the corona response. But the climate crisis is an equally big crisis, and we can kill two bird with one stone by investing in green reform, which can create new jobs and new opportunities,” the former party’s political spokesperson Sofie Carsten Nielsen said.

The government said it expects a decline in the Danish state’s spending power by 2025.

The financial room for manoeuvre, known in Danish as økonomisk råderum, is expected to stand at 19.5 billion kroner by 2025. That is a reduction downwards from an October 2019 estimate of 28.75 billion kroner by 2025.

The figure represents available money in state coffers once budget spending is accounted for, and also takes into account demographic changes and economic prognosis.

Climate agreements and expenses incurred by the response to the Covid-19 pandemic were cited by Wammen as factors pushing the figure down.

The government has also set aside a total of 2.4 billion kroner from the funds to finance an early retirement scheme, one of the core policies of the governing Social Democrats.

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