Denmark Urged to Start Winding Down Coronavirus Aid in July

Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis.

Extending Denmark’s coronavirus aid package beyond its July deadline could be counterproductive, economic experts have told the government as it continued to roll back restrictions imposed in mid-March.

The bulk of Denmark’s 400-billion kroner ($59 billion) support program is due to expire on July 8. An advisory body to the government said in a report Wednesday that while the aid has played a key role in maintaining production capacity during the lockdown, keeping most of the measures in place “for too long would have great negative socioeconomic consequences.”

The economic council recommends phasing out measures like wage compensation schemes, while allowing some exceptions for those industries that have suffered the most.

18,611 in U.S.Most new cases today

-12% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​039 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April

“This program has been a success and has helped support businesses and jobs, but it is costly for the state and can help slow down an appropriate transition in the labor market as the economy reopens,” the experts said.

The council said aid programs should focus more on boosting liquidity.

Finance Minister Nicolai Wammen said Tuesday the government intends to phase out the measures, which he said are likely to end up costing more than what was originally budgeted. The economy is set to contract 5.3% in 2020, while the budget deficit is set to surge to 7.2% of gross domestic product, according to latest government estimates.

Denmark Faces Less Economic Pain Than EU After Fast Lockdown (2)

Amusement parks and museums were among the latest facilities that were allowed to reopen in Denmark this week.

Source: Read Full Article