Seven of parliament’s eight parties agreed this week to a 17 billion kroner growth stimulus plan. While on the surface the agreement is a shining example of a political system that works, more cynical observers will see it as manoeuvring ahead of a 2015 general election that will be dominated by the economy.
For the opposition, the deal couldn’t have been better had they drawn it up themselves. By agreeing to elements such as cuts in public spending in exchange for tax cuts for businesses, and a rollback of surcharges on soda and beer aimed at keeping shoppers in Danish supermarkets, it ensures the passage of classic centre-right policies, yet leaves the centre-left government with the hard work of selling it to the public.
The government, for its part, can claim that it was willing to bite the bullet and implement necessary reforms for the benefit of a limping economy, even if those reforms go against not only campaign promises – in the case of the soda surcharge – but also run counter to the heart and soul of the prime minister’s Socialdemokraterne and her allies in the Socialistisk Folkeparti.
Selling the plan to supporters already dissatisfied with the reform tack the two parties have taken since coming to power in 2011 will be no easy task. But it will be an easier pill to swallow if it can be served up with a helping of positive economic numbers.
Few doubt those numbers will come; much of the growth predicted by the government as a result of its stimulus package was already forecast to occur. The real question is whether the plan can spur the recovery along fast enough so that it can take hold in time for the government to be able to point to tangible results before the general election.
If the economy is slow to take off, the opposition will win twice: first by taking the election in a landslide, and then by watching its own policies – passed thanks to the leadership of a left-left leaning government – unfold. Should the plan fizzle out, it can – and likely will – blame the current government for mis-steps in implementing the plan.
PM Helle Thorning-Schmidt’s Socialdemokraterne deserve praise for brokering a near unanimous economic agreement. But with the party’s support setting a new historic low with each new poll, it will need more than just leadership at the negotiating table in order to win votes.
What it will need is a kick in the economy – the swifter the better.
