Concert halls, theaters, clubs and other venues with live entertainment are warning that many of them will not survive (DK) unless the government changes its plans for reopening. These cultural organizations are still closed and are receiving compensation for fixed expenses and salaries. They are scheduled to reopen in phase 4 at the beginning of August. But the restrictions that they will need to operate under will make it impossible for many of them to make a profit or break even.
The guidelines state that there must be 4 square meters’ space for each guest. The club Stars in the town of Vordingborg, for example, has capacity for an audience of 430 standing guests, but according to the coronavirus rule, it can admit only 50 people. “If we can’t fill the room, we can’t pay the musicians for playing and we can’t pay our bills,” says Simon Sandfield, who runs the club.
Politicians will rescue disco
“We’re being asked to open, but also asked to die,” says Eben Marcher, the head of Danske Live, an organization that represents cultural venues with live entertainment. “If we can let only one out of ten guests in, it can’t be a viable business.” Marcher estimates that half of these venues could go bankrupt.
MPs from both the opposition and the government’s supporting parties are listening to the warnings and calling on the Minister of Culture to take action before phase 4 begins. “We need a government and a minister that take responsibility and show leadership,” says Zenia Stampe of the Social Liberal Party. Minister of Culture Joy Mogensen responded in an email that if the restrictions are still necessary after the summer, the Ministry will consider how it can help cultural life. It invited Dansk Live and Danske Theater to a meeting on Wednesday.
Amusement park operators are not amused
Another segment of the Danish leisure economy is already suffering financially after reopening. Sommerlande are amusement parks (DK) for children that open in the summer; they have lodging, swimming pools and other recreational activities for young families. They are found in every region of the country, and they are reporting that they had many fewer guests than normal last week, the beginning of summer vacation for the schools. They opened six weeks later than usual, and they have had no foreign tourists, which account for one-quarter of their 12 million visits annually.
They are also operating under other disadvantageous conditions, explains Søren Kragelund, the head of the amusement parks’ industry association. They have extra expenses for following hygienic requirements, and they are also subject to “unfair” competition. Under the government’s stimulus package, cultural institutions such as museums and zoos receive subsidies so that they can offer admission at half price. Amusement parks must demand full price and are losing customers to these other offerings.
“We’re talking about [organizations] that often already receive support and don’t risk going bankrupt,” says Kåre Dyvekær, the head of Sommerland Sjælland. There is some hope for improvement, though, as repeat customers with seasonal passes return. The weather was also very rainy last week. A sampling of museums and zoos revealed that they also had lower than usual attendance then.
As reported by the Copenhagen Post, in a survey of 21 European countries, Denmark ranked the highest in satisfaction with the government’s management of the coronavirus crisis. The survey, entitled “Uncertainty/EU/Hope: Public Opinion in Times of COVID-19,” was commissioned by the European Parliament. It took place in the week ending May 1 and had more than 21,000 respondents.
Some 85 percent of Danes said they were satisfied with the government’s response to the epidemic. Ireland showed the same level, while Spain, Poland and France registered the least satisfaction. The survey covered many parameters. Denmark also recorded the lowest concerns about unemployment (8 percent) and loss of income (14 percent). Spain, Hungary and Greece had the worst results in these categories.
Consistent with earlier economic findings
The results are similar to those from a Eurofound poll conducted earlier in the crisis. That poll indicated that Denmark had the lowest level of job losses in the EU, 9.5 percent versus an average of 28.5 percent in the EU. It also showed that Denmark had the fewest people struggling financially (6.8 percent) and behind on rent or mortgage payments (2.3 percent). Danes also registered the highest level of well-being and life satisfaction, along with trust in the national government.
Survey results for Europe
Here are some of the other main findings from the European Parliament survey (averages for the 21 EU countries as a whole, weighted according to population):
- 50 percent say “Uncertainty” describes their general emotional mood; 41 percent say Hope; the other emotions cited most often were Helplessness (29 percent), Frustration (27 percent), Fear (22 percent), and Confidence (21 percent).
- 58 percent report financial difficulty.
- 53 percent say the health benefits of restrictions outweigh the economic damage.
- 70 percent communicate more often with family and friends.
- 40 percent help others with groceries and other errands; 26 percent receive help from others.
- 57 percent feel dissatisfaction with the solidarity shown among EU member states
- 52 percent are dissatisfied with the measures taken by the EU in response to the crisis.
- 69 percent want the EU to have greater powers to deal with crises like the pandemic.
- 56 percent are satisfied with their national government’s response.
- 41 percent say scientists are the most trusted source of information, vs. 34 percent for national health authorities and 32 percent for the WHO.
- 58 percent say that lockdown restrictions on individual freedoms were justified, while 28 percent were opposed to them.
- 51 percent approved of public authorities using mobile phone apps to monitor the pandemic, while 39 percent were opposed.
The 83-page survey contains detailed results broken down by individual country as well as by other parameters such as age, gender and level of education.
Support for a bigger EU?
The survey concludes by underscoring the dissatisfaction with solidarity among EU member states and a desire for the EU to have greater competencies for dealing with such crises. Its release comes at a time when most EU member states are calling for emergency grants to be made to the countries suffering the worst from the pandemic crisis, while Denmark and three other northern European countries are resisting the measure and favor loans instead of grants.
(Coronavirus DK will take a few days off and return on Sunday.)
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.
The government has announced that it will release wage-earners’ forced vacation savings (DK) to stimulate the economy. This measure is possible because of a change in the timing of vacation savings that is taking place this year. Some background: 12.5 percent of Danes’ earnings are deposited in a vacation account and released when the person holds vacation. Previously, you accumulated the savings in one calendar year and they were released after May 1 in the following year. Everyone has a right to five weeks’ vacation after one year’s employment.
With the change, workers now earn their vacation days and accumulate vacation savings that they can withdraw in the same year. The transition to the new schedule ends in September 2020. The change means that the savings people accumulate in the transitional period will not be paid out for their vacation period in 2020 but rather are being placed in a collective fund, the Wage Earners’ Vacation Fund. The amount that workers are entitled to from this period will be paid out when the person reaches retirement age. It is intended to constitute a sort of forced savings that the Danish state has implemented previously.
Gauging the dosage
So now the government has reached an agreement to release some of these funds this year in order to stimulate the economy, which is undergoing a recession because of the lockdown. There is some DKK 100 billion ($15 billion) in the Fund. It will not release all the funds now, however, but rather three weeks’ worth, or 60 percent. The reasoning is that the recession will have long-term effects and the infusion of money into the economy will be more effective if it is spread out. The first instalment will be disbursed in October, and the parties will negotiate the timing of the release of the rest in the autumn.
The measure was raised during negotiations on the economic rescue plan with the other parliamentary parties. It was proposed by three right-wing parties and endorsed by both labor and industry associations. The latter estimate that the measure – the release of the entire Fund – will support 30,000 jobs. Finance Minister Nicolai Wammen presented the plan on Friday: “We will take it one step at a time,” he said when asked about when people will get the rest of their savings. “We want to release it in doses that have the most beneficial effect.”
The plan will mean that 3 million wage earners out of Denmark’s population of 5.8 million will receive a payment. For someone with an income of DKK 330,000 ($50,000), it will amount to DKK 14,700 ($2,200) in the first instalment and DKK 24,500 ($3,7500) in total.
Economists approve, others dissatisfied
Several economists support the measure (DK) and also the timing. They recall that in 2009, during the recession following the financial crisis, a fund for special retirement savings was released. Some 60 percent of the amount went to consumption and helped to keep the economy running. They suggest that the funds be released around the time that the temporary wage compensation program expires, on August 31.
People on transfer payments (DK) have no wages and therefore no vacation savings. They include retirees, students, those on disability pensions, and welfare recipients. They will receive a one-off, tax-free payment of DKK 1,000 ($150). Three right-wing parties left the negotiations just before their conclusion, partly because of this feature. The Danish People's Party objected to the terms for retirees, as did the DaneAge Association (the counterpart to AARP), which argued that many of the elderly have a low income and would spend the money on consumption and thus support the economy. Other parties objected that people on transfer payments should not receive anything extra at all.
