FISCAL CLIFFS (4)

The Government didn't wait until the summer holidays before making changes to its proposal to sort out the "dagpenge problem". By all accounts Enhedslisten played hardball in the negotiations over the Whitsun weekend, threatening to topple the Government if it didn't make concessions. Concessions duly arrived, as I predicted last week. The two crucial ones were:

- First, the Dkr.2 billion cost of the proposal will not be paid for by an extra levy on unemployment insurance payers (i.e. those in work). As Enhedslisten put it, these people didn't get a rebate on their payments when things were going well, so why should they pay extra when things are going badly? The money will instead come from a reduction in an array of general Government accounts. These include providing Danish lessons for adult immigrants, something which Enhedslisten also supports. However, immigrants don't weigh as heavily in the balance at the moment as the long-term unemployed.

- Secondly, Enhedslisten have found an issue where they are driving the political train. As such, the last thing they want is the establishment of an independent commission to deliberate and ponder in the years leading up to the next general election, which precludes all political discussion. The commission has been quietly dropped. Which means in turn that Enhedslisten can spend the next two years banging the drum for more fundamental changes to the dagpenge system, notably a reduction in the number of weeks required in order to re-qualify in the system.

All agree that the dagpenge system is now "sorted". The only thing that is now needed is some jobs for those unemployed people to get. That of course will be a much more difficult project. Which is why I think that sorted is far too optimistic a word.

Walter Blotscher