Coronavirus DK: Full summer stimulus package unveiled

The government and most of the other parliamentary parties reached an agreement on the next stimulus package (DK) Monday evening. The new program is intended to replace the original rescue package, which will be phased out at the end of the summer. In addition to the release of vacation savings and the one-off disbursement to people on transfer payments described earlier, it contains several features intended to support the Danish economy. 

The wage compensation for the self-employed (DK) will be extended one month and then stop on August 8, as will compensation for cultural enterprises. The period of unemployment benefits will be extended two months in order to give the jobless better opportunities to seek work and to give employers time to reestablish positions after layoffs made during the lockdown.

Support for the private sector

A state fund is being established in order to recapitalize large companies that are important to the Danish economy. It will thus serve as “investor of last resort” for businesses that have exhausted normal financing options. Some DKK 10 billion ($1.5 billion) will be placed in the fund. An export package will consist of DKK 500 million ($75 million) that will be used to ensure the solvency of otherwise healthy export companies that need a sure source of capital.

Denmark depends on exports

Exports account for half of the Danish economy (DK), and some 80,000 jobs in the sector were lost during the coronavirus crisis. Representatives of industrial employers and employees warn that the crisis is not over. “The situation is very serious, and I also think it has been a blind spot for ordinary Danes and also perhaps politicians,” says Claus Jensen of the Danske Metal trade union. Exports have not suffered as much as had been expected, but the industry leaders warn that if other countries’ economies do not recover quickly, Danish firms will not get orders and will need to make another round of layoffs.

“If we can afford to rescue hairdressers and restaurants,” continues Jensen, “we must ensure that what we live off of in Denmark also exists on the other side of the crisis.”

Salvaging the summer

Some DKK 700 million ($100 million) will be used in a so-called “summer package” (DK) that will support recreational and cultural activities for various groups during the summer. It will give children and young people opportunities to participate in summer camps, football leagues, swimming classes and the like. A certain amount is earmarked for children from disadvantaged backgrounds who have been hurt the worst by the closing of schools and recreational activities during the lockdown. In her New Year’s Day speech, Prime Minister Mette Frederiksen promised to give special attention to foster children and other disadvantaged youths. 

The package will also include support for activities in natural surroundings for the elderly and other features that have not yet been settled. The government is working on a proposal to help the airline industry as well.