Denmark finalises 2022 budget agreement

A one-off investment in the health service, free dental services for young people and the end of a tax subsidy for home improvement are among prominent details of Denmark’s 2022 budget.

Government and party representatives present Denmark's 2022 budget agreement in Copenhagen on December 6th.
Government and party representatives present Denmark's 2022 budget agreement in Copenhagen on December 6th. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Denmark’s 2022 budget agreement was presented on Monday morning after a short delay on finalising next year’s finance law.

The government, along with its left wing allies Red Green Alliance, Social Liberals and Socialist People’s Party; and minor parties Alternative and the Christian Democrats, presented the budget on Monday.

“We are protecting our welfare. Money has been set aside for our schools, children and elderly,” Finance Minister Nicolai Wammen said according to broadcaster DR.

Young people aged 18-21 years will receive free dental care under the new budget, while a popular tax subsidy for home improvements, the håndværkerfradrag, is to be scrapped.

Red Green Alliance (Enhedslisten) lead political spokesperson Mai Villadsen called free dental care for young people “a strong right of welfare”.

Sofie Carsten Nielsen, leader of the Social Liberals, said “we are dropping the building subsidy that has ignited the already overheated housing and construction market”.

Meanwhile, a limit is to be set on the number of children per class in grades 0-2 at state elementary schools.

No more than 26 children will be allowed in a class.

Following weekend negotiations, the parties behind the deal earlier revealed that it would include a significant one-off investment in the public health service, which has come under increasing strain due to factors including the Covid-19 pandemic and industrial disputes, notably between nurses and the government.

The deal means a billion kroner has been set aside for additional spending in extraordinary circumstances, and will be used to retain health sector staff and boost hospital capacity.

The money is to be distributed to the regional authorities who can decide how to spend it, DR writes. As such, it is currently unclear how the spending will resolve issues such as treatment backlogs and staff shortages.

In the budget, the parties also pledge to double energy production from wind farms by 2030, compared to current levels.

Parliament usually votes through the next year’s budget in December, but proposals are normally tabled in early autumn – the original proposal for 2022 was presented at the end of August

This is because Denmark is ruled by minority governments or coalitions, which must seek and negotiate support from other parties to pass laws.

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Danish election: What happens next after narrow win for left bloc?

The ‘red bloc’ faction of left-wing, centre-left and green parties took the narrowest of majorities in Denmark’s election on Tuesday night. What happens next and what might the next government look like?

Danish election: What happens next after narrow win for left bloc?

Current prime minister Mette Frederiksen is in a strong position to stay in her job after as the ‘red bloc’ traditionally led by her Social Democratic party, was able to scrape together a hairline, one-seat majority in parliament with 90 of the 179 mandates, or seats, on Tuesday night.

It was the North Atlantic mandates that ultimately pushed the red bloc over the edge — one of the Faroe Islands’ two seats and both of Greenland’s.  

Frederiksen’s own party returned a strong performance, taking a 27.5 percent vote share and gaining two seats to take its total to 50. It is the best election result for the Social Democrats for 20 years and makes them comfortably the largest party.

READ ALSO: Denmark’s red bloc takes knife-edge victory 

Although Frederiksen now looks in a position to secure enough backing from the left to form a government, she may still push through with her plan to attempt to form a government across the centre, giving centre-right parties a place in power.

What happens next?  

At 11 am, PM Frederiksen will meet with Queen Margrethe to formally tender the current government’s resignation and recommend a dronningerunde or “Queen’s round.” 

Each party head must pay a visit to the queen at Amalienborg to ceremonially tell the queen their pick for the “Queen’s investigator” to form a new government. That title, though not necessarily PM, will almost certainly go to Frederiksen.  

Frederiksen has reiterated her desire for a broad centrist government, suggesting she’ll be courting blue bloc parties in the coming days. 

In comments reported by broadcaster DR, Frederiksen said “it is certain there is no longer a majority behind the government in its current form,” meaning a minority government consisting only of the Social Democrats.

“The Social Democrats campaigned on the basis of a broad government [centre coalition, ed.]. If a majority of parties nominate me as Queen’s investigator, I will see whether this is possible,” she said.

The left wing Red Green Alliance and centre-left Socialist People’s Party (SF) have already stated that they oppose a centre coalition, calling for Frederiksen to form a centre-left government based on the parties that will nominate her to lead the Queen’s round.

What is certain is that Frederiksen is now in the driving seat in upcoming talks to form a government.

Despite his newly-formed party grabbing 16 seats, Lars Løkke Rasmussen’s position has been significantly depleted at the last moment.

As leader of the centrist Moderates, which he founded only last year, Rasmussen was expected to wake up a kingmaker — exit polls had suggested neither bloc would be able to reach a majority without the support of Rasmussen and the Moderates.

With the red bloc’s 90 seats, however, Rasmussen is left in a much weaker position than the exit polls projected.

Such was the last-minute nature of the red bloc majority, Rasmussen was still written up as the “breakout king” (udbryderkongen) on newspaper Politiken’s cover on Wednesday morning, while tabloid Ekstra Bladet described him as “the battering man” (smadremanden).