New figures from the European Commission put Denmark near the top of the list for propping up its banks with state support – a policy proscribed by the EU. The comparative numbers paint a picture of the nation’s banks as being among the worst in the EU at weathering the economic crisis on their own, without bailouts from taxpayers, reports Ugebrevet A4.

Since the financial crisis began in summer 2008, Denmark has received 18 separate exemptions to circumvent EU rules banning state support for the banking sector. Only Germany and Ireland, with 22 and 21 exemptions respectively, have skirted the rules more times than Denmark has, according to the European Commission report.

The government has given the banks nearly 4,500 billion kroner in taxpayer provided support since 2008 – more than two and a half times the GDP. Of the 27 EU countries only Ireland has surpassed Denmark in terms of per capita state spending to prop up vulnerable banks.

The 18 exemptions to the EU rules were made in connection with parliamentÂ’s four bank guarantee plans, Bankpakker 1-4, which were implemented by the Venstre-Konservative government (VK). The guarantees were intended to shore up undercapitalised banks and absorb the losses of the ten banks that have gone bankrupt since 2008.

Bankpakke 4, the product of the most recent dispensation, came into effect in October, just after the new Socialdemokraterne-led government came into power. However, it was enabled by legislation passed in the eleventh hour by the out-going VK government.

Under that deal, the state absorbed the bad debts of Max Bank, and brokered its sale to a competitor bank, in order to ensure that Max Bank would not become the eleventh Danish bank in three years to file for bankruptcy.

Financial expert Sune Troels Poulsen, an assistant professor at the University of Copenhagen, explained that the high level of state support for Danish banks was necessary precisely because of their small size.

We have “needed to ensure our banking sector more than the bigger countries have had to do”, Poulsen told Ugebrevet A4. “The little Danish banking sector has undoubtedly been under greater pressure of collapsing, so the government has had to provide a proportionately large security.”

Birgitte Bundgaard Madsen, the department head at FinansrÃ¥det, the Danish bankers’ association, underscored that other countries started the censured trend of backing up their banks with state funds; then little Denmark had no choice but to follow suit, according to Madsen.

“The numbers just show the consequences of the spread of the financial crisis. You have to remember that Denmark wasn’t the first country to give out state guarantees. Once other countries starting to put up state guarantees for their banks, it became necessary for Denmark to put up state guarantees for the whole sector in order to stay competitive.”