Theory and practice

The productivity commission, produktivitetskommissionen (the word alone should rouse suspicion), has been asked to propose suggestions for stimulating growth. And last week the wise men did.

No surprise that the general advice was to implement competition where it was weak or completely absent.

The suggestion to allow mega markets, where planning restrictions have ruled them out, raised furious protests from small shopkeepers who said that downtown shopping malls would become ghost towns if more mega markets were to surface in and around the cities.

The government thinks that it can generate growth by talking and ignore the need for shifting funds to facilitate growth. Last year, reductions in energy taxes and corporate taxes at least gave rise for growing optimism among industry leaders.

However, today minister Margrethe Vestager (R) does not dare to challenge the political left with another financial lever.

The CEO of Danfoss, Niels Bjørn Christiansen, criticised the government for a lack of ambition and stated that more action was needed. 

The cost of energy is an especially crucial factor, according to the CEO of the nation’s cement giant Portland – it needs to come down significantly, not just be frozen.

Minister Vestager claimed that the state budget did not leave room for costly growth incentives, and all respect for that. But a change of priorities and planning could do a lot, and resulting growth could in itself generate funding for a more ambitious plan.

It is no go when everybody agrees on the need for more competition and competitiveness but, at the end of the day, nobody wants change.