Economy an Important Issue in Upcoming Danish Elections

In a race that grows tighter, Prime Minister Helle Thorning-Schmidt of the Social Democratic party touts her success in getting the economy back on track. Opposition leader Lars Lokke Rasmussen from the Venstre party, a center-right party, claims the same success because of his governance from 2009 to 2011.

In a race that grows tighter, Prime Minister Helle Thorning-Schmidt of the Social Democratic party touts her success in getting the economy back on track. Opposition leader Lars Lokke Rasmussen from the Venstre party, a center-right party, claims the same success because of his governance from 2009 to 2011.

Both parties have reason to celebrate Denmark’s road to recovery since a 2008 housing crash where housing prices plummeted by 20 percent. Homeowners amassed the highest relative debt load in the world, and private consumption dropped. The economy seemed to have been in a tailspin until Thorning-Schmidt claims to have steered the country out of troubled waters. She also fears her rival would interfere with policies that have benefitted the economy. However, Rasmussen sings a different tune, claiming that the economy was recovering before his opponent’s tenure in office.

Thorning-Schmidt took in office in 2011 and promptly disappointed her voter base in the beginning by maintaining some old policies of her predecessor, including capping employment insurance and lowering taxes, but the economic recovery has boosted her credibility with the public. The government raised growth outlook to 1.7 percent for 2015 while declaring an official end to the turmoil on May 27. Unemployment remains at 4.8 percent, as of April, and Denmark has undergone its seventh consecutive growth rate in the first quarter.

However, analysts say that rising demand in exports is the primary reason behind the recovery. Chief analyst of a think tank in Denmark, Frank Skov, believes the rise in global demand is a primary reason why Denmark is recovering, especially since the country relies on an exporting economy to flourish. Over half of the nation’s GDP comprises of exports. Germany, Britain and Sweden make up Denmark’s largest demand markets.

In the labor market, more businesses are hiring, but the business community is concerned about high unemployment benefits. Some claim that Denmark cannot afford to support such a generous system, and some companies are contending with an older population and a low unemployment rate. Rasmussen and his ilk believe that such high benefits give some workers a disincentive to find work, as some of the unemployed would lose money by taking a job that pays $18 an hour. Opposing analysts believe that cutting employment benefits would lead to employers slashing wages for people on the lowest salary bracket, and they counter that more people would choose to work, even though they would get more from unemployment. Roughly, 16,000 people participate in the labor market, even though they would benefit more by accepting benefits.

Some in the business community are also calling for less stringent standards to bring in more foreign labor. Rasmussen has called for lowering the minimum wage requirement for attaining a work permit, but only for countries that have cultural and economic similarities to Denmark. This stance has angered those on the opposing side. Immigration is considered a hot-button issue in Denmark, and it could be a determining factor in who wins office. Currently, the opposition party is gaining a slight lead, according to AFP. Elections take place on Thursday.