PM’s policies financially sound, say economists

The head of a left-leaning government, Thorning-Schmidt judged more economically responsible than her right-of-centre predecessor

December 28th, 2012 6:23 am| by admin

PM Helle Thorning-Schmidt’s (Socialdemokraterne) economic policies such as cutting early retirement pensions and unemployment benefits have angered her party’s traditionally left-leaning voter base but earned her high praise from economists.

Nine out of ten economists surveyed believe that Thorning-Schmidt is at least as economically responsible as former PM Lars Løkke Rasmussen and his centre-right government.

The results cast doubt on the conventional wisdom that governments to the right have a better handle on the economy than do those with left-of-centre leadership.

Jes Asmussen, an economist at Handelsbanken, said that policies carried out during Rasmussen’s tenure actually damaged the economy.

“They did not engage in sustainable reforms,” Asmussen told Jyllands-Posten newspaper. “They overheated the housing market and the economy in general.”

Mads Lundby Hansen, chief economist at the libertarian think tank Cepos, said the reforms put in place by Ramussen’s government were a case of too little, too late.

“There were a wide range of great reforms, including early retirement and benefit reform, but they should have come before the crisis hit,” he told Jyllands-Posten.

Hansen had high praise for what he saw as Thorning-Schmidt’s continuation of Rasmussen’s tight-fisted policies.

The prime minister’s embracement of financial austerity has strained her relationship with some traditional allies.

The nation’s labour unions, usually staunch Socialdemokraterne supporters, are shaking their collective heads over policies that they say offer no hope for the unemployed.

“I am not sure what planet the prime minister is living on,” 3F union president Poul Erik Christensen told Jyllands-Posten.

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