DAGPENGE

Dagpenge (literally "day money") or unemployment benefit has been the nightmare issue for the ruling Social Democrats under Helle Thorning-Schmidt throughout their time in Government. Back in 2010 a deal was done between the then right-of-centre Government and the Radicals to reduce the length of time an unemployed worker could get dagpenge from 4 years to 2; and to double the period of full-time work required to start the clock ticking again from 26 weeks to 52. The idea was to encourage/force/browbeat (take your pick) the unemployed to be more active in finding a new job.

The Social Democrats and the parties to the left of them were vehemently opposed to the reform at the time, and promised to repeal it if they ever got into power. However, their collective showing in the September 2011 election was not as good as they had expected, and in order to become Prime Minister, Ms. Thorning-Schmidt had to do a deal with the Radicals in order to bring them into the coalition. The price of that deal was that the dagpenge reform stayed.

Even supporters of the reform accept that in order for it to work, there must be jobs available for the unemployed to seek. The problem is that in the wake of the financial crisis, those jobs have not materialised as quickly as had been expected. Despite various fudges since 2010, that means that more and more people have been dropping out of the dagpenge system altogether. Back in 2010, it was estimated that perhaps 2-4,000 people a year would find themselves in that position. However, at the end of 2013 it was 34,000; by the end of this year, it is likely to be 50,000. In Denmark, that's a lot of disgruntled people.

The result has been to put Ms. Thorning-Schmidt in a very difficult position. First, she has to defend a policy which she herself originally opposed, which goes against traditional Social Democratic values and which causes her natural supporters to choose other parties (since the departure of the Socialists from the coalition, her former partners have been giving her earache on the issue, even though they also accepted it as the price of Government). Secondly, it has reinforced the impression that the real puppetmasters in the Government are not the Social Democrats, but the Radicals under Margrethe Vestager. In popular parlance, if Margrethe doesn't want it, then it won't happen.

It looks increasingly likely that Ms. Thorning-Schmidt will lose her job at the next general election, which must be held by September next year. Against that background, it is seen as somewhat odd in Denmark that she is in the running to become European President. Here she as viewed as barely in control of her party and not at all in control of her Government. In politics, perception matters.

Walter Blotscher