COPENHAGEN May 30 Denmark's right-leaning
government is seeking to create jobs through pension reforms and
tax cuts to entice people to work, but its proposals to be
presented later on Tuesday may not get the needed support of
rightest ally Danish People's Party.
The government envisage average Danish GDP growth at 2
percent per year until 2025 from a current projection of around
1.5 percent. It has also raised its economic growth forecast for
this year to 1.7 percent from a previous forecast of 1.5
Denmark's economic recovery is gathering pace, but companies
face labour shortages, prompting the government to focus on
"We will strenghten and prolong the current economic upswing
through reforms to increase the labour supply and our
productivity," finance minister Kristian Jensen said in the
report seen by Reuters ahead of the official release.
Prime Minister Lars Lokke Rasmussen secured a broad housing
tax deal this month, ending months of policy deadlock. However,
he also dropped a proposal to increase the retirement age due to
a lack of support from anti-immigrant Danish People's Party
A key part of Rasmussen's new plan is to increase work force
by up to 60,000 by getting more people off social benefits,
incentivise people to postpone retirement, increase average
workhours, and recruiting people from abroad.
Rasmussen's three-party government holds 53 of the 179 seats
in the Danish parliament and is dependent on the DF's 37 seats
to secure a majority.
The DF is generally supportive of the country's generous
welfare model and has said it does not support tax cuts higher
It has recently improved relations to main opposition party
Social Democrats in a bid to increase political leverage over
Rasmussen by highlighting that it has other options should he
prove unwilling to cooperate sufficiently.
(Reporting by Erik Matzen, writing by Teis Jensen, editing by
Jacob Gronholt-Pedersen and Jeremy Gaunt)