Tight fiscal policy strangling growth, economic advisors warn

Government, OECD and business reject calls to slacken economic discipline

The government's independent panel of economic advisors is calling on the administration to relax its economic discipline in order to help stimulate economic growth.

“The tight fiscal policy that has been followed since 2011 and is scheduled to continue for the next few years is slowing growth,” Det Økonomiske Råd stated in its latest report, published yesterday. 

The report concludes that the economy has made modest gains and that the timing is right for less restrictive policies that would give it a boost.

The economy minister, Margrethe Vestager (Radikale), said at a press conference on Monday in advance of the report that current policies are unlikely to change.

“Further concessions are a risk we are not willing to take,” she said.

University of Aarhus economics professor Bo Sandmann Rasmussen said he doubted the government would follow the council’s recommendations to do things like cut interest rates on loans and make changes in the retirement system.

“That would be too much of a break from their current strategy,” Rasmussen told DR News.

Rasmussen expected the government would wait until the international economic recovery begins in earnest and then get onboard.

The OECD recommended today that the government should maintain its current course, while business lobby group Dansk Industri (DI) also rejected the report’s conclusions.

“Compared with Germany, Europe's largest economy and our largest trading partner, we are not competitive enough,” said DI head Karsten Dybvad. “Danish wages have risen 10 percent more than the countries around us since 2001, putting huge restrictions on our ability to be productive and innovative.”

The Økonomiske Råd report, however, contended that Danish wage increases have levelled off in recent years while exporters have improved their market share, putting the economy in a good position against neighbouring countries. It argued that lowering corporate taxes and reducing energy surcharges would help companies become even more competitive.

“It is important to realise that we can do more and that creating growth at home makes us even more competitive in the marketplace,” council president Hans Jørgen Whitta-Jacobsen told DR News. 

TOP STORIES

  • Bestselling author of ‘The Year of Living Danishly’ Helen Russell on why she moved back to the UK after 12 years

    Bestselling author of ‘The Year of Living Danishly’ Helen Russell on why she moved back to the UK after 12 years

    After more than a decade living in Denmark, Russell shares why she made the move, how she’s coping, what she already misses, and the exciting new projects she’s working on. “It’s been a very tough decision. I love Denmark, and it will always hold a special place in my heart,” she says.

  • Denmark launches first AI supercomputer

    Denmark launches first AI supercomputer

    The new Gefion AI supercomputer is one of the world’s fastest and will accelerate research and provide new opportunities in Danish academia and industry.

  • Navigating big love, big moves and big feelings

    Navigating big love, big moves and big feelings

    Experts believe it takes seven years to move into a new culture, according to leading Danish psychologist Jette Simon and therapist Vibeke Hartkorn. For expat couples, the challenges of starting a new life together in Denmark can put pressure on relationships, but emotions-focused therapy can help.

  • More and more Danes are working after retirement age

    More and more Danes are working after retirement age

    Politicians debate a lot these days about when you can retire. The reality shows that an increasing number of Danes like to work, even if they can withdraw from the labor market. Financial incentives help.

  • Environmental activist fears death in prison if extradited to Japan

    Environmental activist fears death in prison if extradited to Japan

    Canadian-born environmental activist Paul Watson has been in prison in Greenland for almost 100 days awaiting an extradition decision for a 14-year-old offence against a Japanese whaling vessel that he calls a “minor misdemeanor”. The 73-year-old had previously passed through Ireland, Switzerland, Monaco, France and the USA without trouble, before Greenlandic police arrested him in July.

  • Denmark too slow to ease recruitment rules for non-EU service workers, say industry associations

    Denmark too slow to ease recruitment rules for non-EU service workers, say industry associations

    When the Danish government in January presented the first of its schemes to make it easier to recruit foreign labour from outside the EU, it was hailed by the healthcare and service sectors as a timely and important policy shift. But while healthcare changes have been forthcoming, the service sector is still struggling, say the directors of the industry association Dansk Industri and one of the country’s largest private employers ISS.

Connect club

Connect Club is your gateway to a vibrant programme of events and an international community in Denmark.

Sign up here

Career

  • Come and join us at Citizens Days!

    Come and join us at Citizens Days!

    On Friday 27 and Saturday 28 of September, The Copenhagen Post will be at International Citizen Days in Øksnehallen on Vesterbro, Copenhagen. Admission is free and thousands of internationals are expected to attend

  • Diversifying the Nordics: How a Nigerian economist became a beacon for inclusivity in Scandinavia

    Diversifying the Nordics: How a Nigerian economist became a beacon for inclusivity in Scandinavia

    Chisom Udeze, the founder of Diversify – a global organization that works at the intersection of inclusion, democracy, freedom, climate sustainability, justice, and belonging – shares how struggling to find a community in Norway motivated her to build a Nordic-wide professional network. We also hear from Dr. Poornima Luthra, Associate Professor at CBS, about how to address bias in the workplace.

  • Lolland Municipality launches support package for accompanying spouses

    Lolland Municipality launches support package for accompanying spouses

    Lolland Municipality, home to Denmark’s largest infrastructure project – the Fehmarnbelt tunnel connection to Germany – has launched a new jobseeker support package for the accompanying partners of international employees in the area. The job-to-partner package offers free tailored sessions on finding a job and starting a personal business.

Want to advertise your job with CPH Post?

Contact us

Jobs