The Socialist Party Threatens Government

Enhedslisten, the party that represents the strict socialist movement in Denmark, has threatened to vote against its own budget if the sitting government does not change the bill to the support party's liking. Enhedslisten, translated as The Unity Party, has also warned the government not to go to the more conservative or European Liberal parties for their votes to pass the proposed budget, underlining the party would be a thorn in the side of the government, which is social democratic, in future negotiations.

Enhedslisten is complaining over tax cuts which it claims will be at the expense of welfare recipients and retirees and has stated it will hold the sitting government to promises it had made in the last electoral cycle. Enhedslisten role in parliament is as a support party in a coalition. The previous coalition government consisted of the largest conservative party with two support parties, where a single support party had the greatest influence and had negotiated for concessions in immigration. The influence help by Dansk Folkeparti came from the party's willingness to form a coalition government with the minority parties if the conservative Venstre did not make the desired concessions. Enhedslisten however lacks any commonality or even friendliness with the minority group.

Economists, referred to in Denmark as Wise-men (Vismænd), have both praised and criticized the finance reform. While criticizing the omission of reforms in property tax, pointing out the government could have received a few billion kroner in tax money, they have praised moving tax brackets so fewer pay the top tax and increasing the employment deduction, which is given to those in gainful employment and not those who are receiving income insurance or pensions. The Wise-men have also praised the intent of allowing wages to increase a little faster than pension or income insurance.

Enhedslisten criticized the reforms, pointing out taxes will cost those on income insurance 13,000 Kr a year. Tax cuts, according to the reform plans, will in part be financed by cuts to income insurance payment periods, reducing the current period from four years down to two years from 2013 and forward. Verner Kirk, director for AK-Samvirke, which organizes income insurance organizations in Denmark, has noted it will not be as easy as it was before to convince people to buy unemployment insurance. Ældre Sagen, the pensioner advocacy group for Denmark, has also criticized the reform, noting while the Elder Check may be raised by 4,500 a year, the base payment in public pension will be cut by over 13,000 a year.

-Servus

Coalition agreement on Wind Energy; The Poor Pay

With a coalition consisting of all but one party, Liberal Alliance, Denmark's parliament had reached an agreement through 2050 to develop wind energy production, so 50% of electricity is produced by wind farms in Denmark by 2050 and financed through 2020 with excise taxes on central heating. This sets the stage for a transformation of Denmark's industries, providing a huge boost for companies like Vestas, who produce windmills and fulfill a large portion of the worlds demand in wind energy, but face competition from companies in China and India. Denmark will become a world leader, not in production of the windmills, but in taking the leap from coal and oil to renewable and independence from foreign energy. That last 50% will not seem like a major hurdle afterward. This article is however critical of the agreement and will cover two points; how this agreement will be financed and the mystic influence the Red-Green Party, Enheds Listen (Literal translation: The Unity Party).

While this seems like an ambitious plan for Denmark and should benefit everyone, the burden of finance is carried by the lower class, because the transport sector, cars and trucks, and furnaces, typically of the wood burning variety found in upper middle class and on the way up homes, are exempt. Central heating is more common in apartments, small town homes in the incorporated part of a city and the public sector. Collective energy production is more often used, and financed, by the lower class in Denmark. In effect, exempting private energy from any taxes, including cars, taxes specifically the people who already are economically stressed.

There are two dangers in financing such a reformation with revenue solely from the lower class. If unemployment goes up again, capital to finance this energy reformation will dry up and work will come to a halt. While everyone needs to heat their homes, people will turn down the radiator to save a little money here and there. The effects on local economies can also be traced directly back to funding short falls.

Wind farms are a collection of windmills in an area considered prime for wind energy production and put to the side specifically for that purpose. Wind farms can be found out at sea or on land and sometimes on agricultural farms. Projects to construct windmill installations can create hundreds of jobs in the local economy for years. This breath of life in the local economy can lift the standard of living for the area and continued growth after the project is completed can be expected. However, if funding for a project is cut before it is complete and people are suddenly and unexpectedly out of a job, investments made in the local economy can be lost. This lost investment, which could have gone to other projects that return the investment, adds insult to injury. Along with the lost jobs, further funding for the transformation evaporates and other projects will come to a halt. It is called an economic bubble.

The second point of this post is a question. What did the Red-Green party do exactly? They have participated in the negotiations, but kept their contribution behind closed doors. Why?