The Great Nordic Thread

[Diouf]

Government finally reaches agreement on property taxation; Fogh's taxation stop rescinded



After long and hard negotiations with a breakdown at one point, the VLAK-government today reached an agreement with the Social Democrats, the DPP and the Social Liberals on a new property taxation system. The Liberal Alliance and the Conservatives finally gave in on their demands of a flat property tax rate and a land taxation rate freeze, which allowed Finance Minister Kristian Jensen to make a deal with the negotiation partners.
The deal is a break with the so-called "taxation stop", introduced by former Liberal leader and PM Anders Fogh Rasmussen in 2001. The taxation stop meant that the property tax was frozen at its 2001 amount. This was a very easy to sell policy, which created certainty among property owners. It also worked well politically as the Social Democrats were wavering on this policy and all other Red Bloc parties wanted it abolished, creating both tensions in Red Bloc and the possibility to portray the Red Bloc as raising property taxes on ordinary Danes. However, it has been severely opposed by economists, because it increases the chance of property bubbles as values can rise much quicker when taxes don't rise with it. Additionally, this has been the singlest biggest driver of inequality in Denmark as the wealthiest property owners in Northern Zealand, Copenhagen and Eastern Jutland has received huge wealth increases without paying any taxes on it.

The new property taxation system will be phased in and enter fully into force in 2021, when the property tax will again be a percentage of the property value (0,55% below 6 million DKK/0,81 million euro, 1,4% above it) instead of a fixed amount. Additionally a new property valuation system will enter into force, which will be more precise than the previous one, where cheaper, rural properties were overvalued and expensive, city properties undervalued. In the long term, the property taxes will stay at the same combined level as now, but with a fairer distribution between property owners. It will cost a combined 20 billion DKK/2,7 billion euro in the short and medium term. This includes compensations for too high property valuations under the previous system, ensuring that nobody pays a higher tax until 2021 than they would have under the previous system, some temporary rebates for those who gets the biggest tax increases after 2021, and for allowing property owners to postpone tax payments until they sell their house. These 20 billion are not financed by new incomes, so it is taken from the "available money" in the budget over the next 10 years. This is the reason why the left-wing parties SPP, Alternative and the Red-Green Alliance are not in the deal; they call this a 20 billion tax cut for home owners, paid for by the reforms made in recent years against the weakest in society.

[Diouf]

Social Democrats and DPP target Kristian Jensen - wants full investigation of taxation troubles

The two biggest parties in parliament have decided to support a full investigative commission to look at the many problems in the taxation authorities in the recent decade. Until now, both parties have worked with the government on a plan to re-build the taxation authority and largely refrained from attacks on previous wrongdoings, which have then largely been confined to the Red-Green Alliance and the Alternative. However, the problems have received renewed attention in recent weeks, which have increased the public pressure for doing something to place a responsibility. Also Finance Minister and Liberal Deputy Leader Kristian Jensen was Taxation Minister from 2004 to 2010, so both parties hope that most of the negative attention of the commission will be directed at him. The Social Democrats have probably been hesitant to support this, since they have governed for four years recently without doing anything to fix the problems, but apparently the chance to potentially damage the future Liberal leader was to good to let go.

There have been a number of problems emerging from the taxation authorities. The introduction of a new tax collection computer system has failed horribly, and has meant that the tax authorities have been unable to collect fines and unpaid taxes and fees in a number of areas. Around 25 billion Dkr is expected to have been lost in failed tax receipts, system costs etc. Additionally, there have been a number of other scandals, such as paying 12 billion Dkr to foreign tax fraudsters. Many have blamed the mess on cuts to the staff numbers in tax authorities. These cuts were largely made in the belief that the new tax collection system meant fewer employees were needed, but they were carried out before it was apparent whether the new system would work or not. Also taxation ministers from both sides of the aisle have previously emphasized the cut-down in staff size as an example that it was possible to cut bureaucracy in the public sector without a fall in quality.

It is hard to judge how much Jensen will be damaged by this commission. He is certainly in the firing line due to his long term as Taxation Minister, and the commission will probably show that some warned against cutting the size of the taxation authority as well as flagging problems with the computer system. However, the Social Democrats have largely supported these measures, and carried them on during the Thorning government, so it is only if some of these warnings have been kept from Parliament, that Jensen could really be hit hard. Often these commissions do not end with a smoking gun. The commission to investigate who leaked Stephen Kinnock's taxation information did not find a guilty person. Similarly it looks like the guilty person will not be found in the on-going commission to look at who ordered the police to break the Constitution and shut down a legal Free Tibet demonstration during the visit of the Chinese President in 2012. This case is somewhat different than the two, more political less criminal, but it could be equally hard to find a smoking gun.

[Diouf]

The European Commission today decided that over the next six months, Schengen countries Austria, Germany, Sweden, Norway and Denmark should phase out the border controls instated because of the migrant crisis. This will probably not go over well in Denmark.

http://www.reuters.com/article/us-europe-migrants-denmark-border-idUSKCN18C1V1

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[Diouf]

Biggest voter movements since 2015 election according to Gallup polls for Berlingske:

1% (40.000 voters) of all voters from DPP to New Right
0.8% from Social Democrats to the Alternative
0.7% from Liberal Alliance to Liberals
0,6% from DPP to Social Democrats

The three big parties have all lost between 1,5 and 2% of all voters to the group of voters, who are now in doubt about how to vote. The Liberal Alliance has lost a lot of voters (1%) to the group of doubters compared to the other minor parties, but they avoid a bigger meltdown due to being the party which has gained most new voters of all parties (0.8%). They are still 1.2% down from the 7.5% they received in the 2015 election in this poll, and 3.1% down from the 9.4% they polled in early 2016. So LA's strong position among the young generations joining the electorate keeps them somewhat afloat, but the question is whether the faithless youngsters will stay with the party as more of their youngish protest movement vibe is worn off from being in government.

[Diouf]

Denmark repeals blasphemy law

After weeks of internal discussions and studies of other countries, the Liberals finally decided to support repealing the blasphemy law. The Red-Green Alliance proposed the repeal back in March, and the DPP, SPP and the Social Liberals already then supported the idea. The Alternative was quite split, so decided to have a poll among its members, where 69% voted for repeal. The Liberal Alliance and the Conservatives also supported the repeal in rhetoric, so a majority was already in place. However, a government is supposed to agree on how it votes, so until the Liberals had been convinced, the two smaller government parties could not vote for the repeal. There were different concerns among some Liberals. A few MPs from Christian areas feared protests, others were concerned about possible terror threats, especially since the Police Intelligence Agency said the repeal "could have security implications". However, after a Justice Ministry report showed that the Netherlands, Norway and Iceland had faced no changed security environment after their repeals, the party finally decided to back the repeal.

Different kind of blasphemy bans have existed around as long as religion itself. However, since the introduction of the modern penal code in 1930, there have only been three court cases based on the blasphemy law. The last sentence fell in 1938 when a small group of nazies were sentences for attacks on judaism. The most famous case is from 1971, where two producers from the Danish Radio were accused of breaking the law after a young female singer performed "the Eye", a song which portrayed God as a voyeur "who was so damned hard to get to leave" when she had different sexual interactions. The two producers were acquitted, and since then nobody had been charged after the blasphemy law. In fact, that often became an argument in favour of keeping the law:" no one is being charged with it anyway". However, in February 2017 a man in Northern Jutland was charged after he had uploaded a Facebook video where he burns a Quran. This brought the issue right back on the political agenda, and has now lead to the law being repealed.

Nice to see a strengthening of free speech, although it was a bit painful to see the Liberals take so long to come down on the right side of this question. Hopefully, the so-called racism/hate speech law could be repealed soon as well, but realistically that looks much more difficult, since none of the Red Bloc parties would likely support it. So it would likely be a straight bloc vote if it was to be repealed, and even though the Liberals have previously supported its repeal in opposition, I am quite certain that they will be hesitant in actually voting to repeal it in government. Much of the establishment in the civil service, intelligence agencies, NGOs etc would be opposed to it, and if it is repealed, there will probably be all kind of international criticism. Something the government particually fears after the massive international attention for a week surrounding the so-called "jewelry law", which allowed the police to confiscate items of really high value from asylum seekers to pay for their stay. An obviously symbolic law, which haven't really been used, and which it turned out other countries had in different shapes as well, but still led to the preditable criticism from CNN-hosts, the UN, the Council of Europe etc.

[Diouf]

So if the Conservatives even supported this -- who didn't, then?

Well, in the end only the Social Democrats, which is kind of weird. And even though this is a minor issue, it does slightly dent their overall "tough on migration/islam" message. I guess, it is primarily the establishment factor which have been decisive for the party preferences this time. The two traditional PM parties were very hesitant to go against the wishes of the intelligence agencies and the civil service. Social Democrat leader Mette Frederiksen was Minister of Justice in the previous government, so there is footage of her defending the law, which probably makes it even more difficult for her to agree in changing the position of the party. The public defence of their position, as made in parliament, is as follows:" We believe there should be a legal limit for how low you can go in offending other people. The blasphemy law does not prevent criticism of religion, it simply means you cannot publicly burn holy books. The real question therefore is: Does it make our society better that you can burn holy books? Does it improve our public debate and democracy? We don't think so. Therefore we are opposed to this repeal."

[Diouf]

The picture of the Scandinavian leaders parodying the Trump/Saudi/globe photo with a soccer ball is priceless!

I know the Swedes have parodied Trump before, but my best guess would be that they really weren't trying to do that here. The Danish government has made the UN sustainable development goals, which are pictured on the football, their own soft foreign policy goals. And I would guess something similar is the case for the other Nordic countries since these goals were the main topic for the meeting in the Nordic Council. The Danish Ministers, particularly Kristian Jensen, have been using this football every time they talk about the goals. But yes the comparison is very funny

[Diouf]

The Finns Party's party congress convenes tomorrow to vote on the new chairman, as Timo Soini, who has led the party for 20 years, steps down. The main candidates are Sampo Terho, Minister for Culture, and Jussi Halla-aho, MEP. Terho would be seen as a continuation of Soini's rather moderate line. Halla-aho would take the party further to the right on immigration. The Finns Party's coalition partners in the Finnish government, the Centre Party and the National Coalition Party, would prefer Terho.

Seems like the race has tightened pretty much? Saw a Lännen Media poll among Finns Party local leaders and elected representatives with 43% Terho and 42% Halla-aho.

[Diouf]

Halla-aho is more open to leaving government than Soini was or Terho would have been, but he will first try to keep the party in government to drive a harder immigration line (which actually does have some basis in the government platform accepted by the three parties in 2015).

Has he mentioned any specific demands? I wonder whether its just "standard tighentings" which have happened over most of Europe with lower payments to refugees, longer time for family reunification etc. or whether it is more significant measures like Hungarian-style refugee prisons or leaving international conventions and ECHR, which I believe he has proposed earlier.

[Diouf]

Interesting to see whether the Finns Party will surge back up now. It really is difficult for these anti-migration parties to go into government. Most often it will be with standard centre-right parties, and if they can't convince them to radically change migration policies, most attention will be on economic policies where many of their voters will not be superhappy about right-wing policies.

[Diouf]

Polling average half way through the term according to Ritzau:

Social Democrats. 26.7% 48 seats.
Social Liberals. 5.9% 10
SPP.  4.8% 9
Red-Green Alliance 8.9% 16
Alternative 5.5% 10
Red Bloc combined: 51.8% 93

Conservatives 3.9% 7
New Right 1.5% 0
Liberal Alliance 6.1% 10
DPP 18.4% 33
Liberals 17.9% 32
Blue Bloc combined: 47.8% 82

All Red Bloc parties have made small gains, which means that they are in a relatively clear lead. In the Blue Bloc, the Conservatives are slightly up, but their momentum stalled after a property tax deal that ended up quite far away from their wishes. The New Right are hovering a bit below the 2% threshold, which reflects some marked differences between different pollsters. The DPP, Liberals and the Liberal Alliance are all a few points down on their 2015 result. The DPP have rebounded since their EU expenses scandal, and are now again above the Liberals in the average. However, the OLAF investigation of their dealings have not yet been finalized, so a very negative conclusion and a potential court case could re-open their wounds.

Currently, most of the focus is on a case regarding Immigration Minister Inger Støjberg. In early 2016, she decided to remove all 16 and 17-year old wifes from their husbands in Danish asylum centres. Until then, all cases in these age groups had been considered individually, but her decision meant that even married couples on 17 and 19 years were split. Støjberg believed the administration had been somewhat lenient, and, crucially, again wanted to appear tough on migration and please the DPP by a symbolic change concerning very few people. The decision was illegal, which is proved beyond doubt, and the practice was changed after 6 months. The question is whether she deliberatedly acted illegally i.e. how much had civil servants warned her? The DPP supports her, which means she can stay in her post and no investigative commission can be started. However, this could be started once the majority changes, and Støjberg could face a sentence if proven to have deliberately acted against the law. Erik Ninn-Hansen was sentenced to a conditional 4-month sentence in the so-called Tamil Case, which ended up bringing down the government in 1993.

Tax reform and a new defence deal are some of the main issues expected on the agenda in the second half of 2017. The tax reform will likely be another round of humilation for the two small government parties, especially the Liberal Alliance, who will clearly not manage to get the top tax rate reduced, their raison d'être. There seems to be a quite clear majority in parliament for increasing the defence budget, but some parties, the Conservatives in particular, want huge increases.

In November, there will be local and regional elections in the whole country, which will probably reflect the above shifts in the polling since the last elections in 2013. The Social Democrats and DPP will probably try to once again show their strong relationsship by forming majorities in more places. I suspect they would like a few high-profile deals where they go together to oust a right-wing mayor. This would make it even more likely for DPP to get their first mayor, and could mean that the Liberals would have a even harder time holding on to their mayor posts.

[Diouf]

In November, there will be local and regional elections in the whole country, which will probably reflect the above shifts in the polling since the last elections in 2013.

It is very very early to look at polls regarding the local elections, and the official campaign does not start until October, but the below Copenhagen poll by Gallup for Berlingske still sets the scene for a quite interesting battle in Copenhagen.



Once the real campaign starts, I expect the Social Democrats to benefit from the Mayor-effect and a more expensive campaign, but it must be quite chilling for them to just be on par with the Red-Green Alliance. Even if the Red-Green Alliance becomes the biggest party, I still think it will end up with a Social Democrat Mayor. However, if the four "Green" parties gets a majority, it will likely mean that many new projects in Copenhagen would be set on hold or scaled down, e.g. a highway tunnel to CPH Airport and new big buildings on Amager, while there will be an even bigger move to promote cyclism ahead of cars, perhaps more roads closed for cars. Similarly, we will probably see a less tough policy and rhetoric on romas, migrants etc.

[Diouf]

Something fishy in the state of Denmark



The political season in Denmark starts with another clash between DPP and the government. The DPP has lost confidence in the Minister of the Environment and Food Esben Lunde Larsen over his handling of fishing quotas. It emerged that Lunde Larsen had done his utmost to avoid putting into effect the December 2016 agreement on quotas, which would give more quotas to small and enviromently-friendly fishermen. The agreement was made by the Socialdemocrats, the DPP, the SPP and the Social Liberals without the government because the parties could not agree with the Minister.

The DPP might not care that much about green policies, but they like to talk as the protectors of the little man, which probably made them agree to this deal. Crucially the DPP's spokesperson on fisheries Ib Poulsen (in the picture) is a small fisherman, who has invested himself heavily in this case. The Liberals, on the other hand, have close ties to the big fishermen (and farmers) and their organizations. Both on a personal level where rich fishermen have made donations to Løkke's charities and one own a business with a Liberal MP, but also because they (and those who sympathize with them) make out a significant part of the party's base, especially in the rural and coastal parts of Jutland. The exact areas which Løkke has focused on winning back after a terrible 2015 result in many such areas. This has not only been visible in less restrictive rules for farmers and fishermen, but also in the massive move-out of state jobs from Copenhagen to other areas as well as liberalized building regulations in coastal areas.

Fishing quotas in Denmark have become concentrated in the hands of relatively few very succesful fishermen, partly due to them being more effective and partly because they have circumvented quota concentration rules by having their spouses, children and other relatives registrered as quota owners. This means that the fishing industry is now dominated by huge boats with many qoutas. And while employment in the industry has been relatively stable in recent years, they have been concentrated in ever fewer harbours, which are booming and/or heavily expanding (e.g. Thyborøn and Skagen) while many others are looking desolated or only host hobby fishermen.

While Lunde Larsen has had his responsibilities for fisheries removed, the DPP agreed to let him remain as a Minister with lesser responsibilities. Løkke has been very eager to keep Lunde in his post since he is very popular in the party's base in Western Jutland, and has become the symbol of a Liberal party somewhat returning to its farming roots. Also the DPP might not want to damage its relationsship to the Liberals too much. The fisheries portfolio has been taken over by Karen Ellemann, who now holds the unique title as Minister of Fisheries, Equality and Nordic cooperation.

[Diouf]

Few Social Democrats want another dance with the Social Liberals

Despite the Social Liberals being the preferred government partner for Social Democrats throughout Danish parliamentary history, the parties now seem further apart than ever. This is reflected among the Social Democrat voters, where only a small share want another government with the Social Liberals. A Norstat poll for Altinget show that only 12% of the Social Democrat voters prefer this scenario. The most preferred scenario is a S-SF government (28%), while the most realistic scenario, a S government, is preferred by 22%. A S-DF government is also preferred by 22%, while 16% don't know. It could have been fun to have the "Große Koalition" option with V included as well, although it remains a very unlikely option.

[Diouf]

Could an S-SF government include Alternative as well, or are they seen as too dippy?

No, that's not really an option. With all their ideas about transparency and party democracy, the Social Democrats will not even consider them. It will likely make the whole governing process slow and cumbersome, and with a lot of focus on the internal difficulties. Also, they are politically quite a bit further away from the Social Democrats. The Alternative often votes together with the Red-Green Alliance, even if they approach politics from different perspectives. Economically they want radical reforms, shorter work weeks, citizen wages, way more green taxes etc, and on immigration, they are probably even more left-wing than the Social Liberals.

SF, on the other hand, has turned into what one commentator calls hjælpesocialister/helper socialists. They focus much more on changes to the status quo with more welfare spending, greener policies etc, than thinking of brand new great visions like the Alternative. They have moved rightwards on immigration rhetric, although if they actually vote for tough immigration policies, they will still break in two parts (again). And after their catastrophic government exit in 2014, there is no reason to think the Social Democrats want to give them another chance of government participation. So the Social Democrats alone in the government is by far the most likely outcome if there is a red bloc majority.

[Diouf]

Blue Bloc parties agree reduction of car and bridge taxes, will introduce road tax for foreigners




As the first step in the negotiations about a tax reform, the Blue Bloc parties today agreed on a traffic package which lowers car taxes, lowers the Great Belt Bridge toll, expands the motorway across Funen and introduces a road tax for foreigners driving in Denmark.

The Government, pushed by Liberal Alliance in particular, originally proposed a very significant car tax decrease on all cars. The car tax has been lowered twice during this government, so that it's currently 105% for a car's value up to 106 000 DKK, and 150% above it. The government proposed a flat 100% tax, which would obviously lower the taxes more on the bigger, most expensive cars. So like most other parts of the government's tax reform, the biggest advantages would be for the highest earners. This has been the dominating narrative, aided by the fact that the wealthy Conservative Minister for Commerce, Business and Growth, Brian Mikkelsen, in an interview about another part of the tax reform said that it would be good if you wanted to buy a Lamborghini.
DPP therefore obviously needed big changes to the proposal before they could reach an agreement. The final agreement means that taxes will now be 85% on a car's value up to 185 000 DKK, while the top car tax remains at 150%. Additionally, climate impact and security levels will affect taxes more than currently. This generally means that the price of micro cars and cars with poor fuel economy increase a bit, while a middle class family car will have its price reduced by around 10% (see the list with examples at the end). The government's proposal was expected to cost around 800 mio DKK (107 mio euro) a year, while the final agreement is only expected to cost around 200 mio DKK (27 mio euro) a year. Thereby, the DPP have more "free money" to demand on welfare spending in budget negotiations or on tax reductions for low earners.

The Great Belt Bridge toll is reduced gradually and will be 25% lower (60 DKK/ 8 euro for normal cars) in a handful of years and the motorway across Funen will be expanded from two to three lanes all the way (currently only the case on half of it). Finally, the government was pushed by DPP to make a system to introduce road taxes for foreigners. The model will be based on the German system where everybody pay a fee, but car owners in Denmark are compensated fully. The fee is expected to be around 1000 kr (135 euro) a year, and the hope is that it will be ready in 2020. I believe there is some doubt about whether the German model is in line with EU regulation, so this could affect the Danish proposal a lot as well.

[Diouf]

Poll of the local elections on 21 November by KANTAR Gallup for Berlingske While the elections are only two months away, the campaign has not started yet, so it is still a very limited number of persons who have tuned in on the election. Local lists will probably not face as steep a fall. The Liberals can hope that their decline will be somewhat mitigated by incumbency effects. They have 48 of 98 mayors, and with a quite good economic situation and immigration as less of a topic locally, many might want to re-elect their current mayor. However, even if the Liberals manages to do a bit better than 19%, they could very well still face a significant decline in the number of mayors. The last local elections were held at the height of unpoularity for the Thorning-government in 2013, while the Red Bloc currently leads in most polls. Additionally, there is the joker of the DPP-Social Democrats cooperation. Both parties have been quite obvious in signalling that the parties could cooperate more at the local levels, although it remains to been seen to what extent this will materialize. A recent Jyllands-Posten count showed that DPP had made or expected to make electoral coalitions (to count several parties votes together for the initial seat distribution) with Blue Bloc parties in 66 of 98 municipalities, while such coalitions had been made with Red Bloc parties in only 4 municipalities. 18 local DPP associations expected to run on their own, while 10 did not know. These electoral coalitions are no assurance of cooperation after the election, but they usually give a very good hint. 8 of 10 electoral coalitions normally hold after an election, when a mayor is to be elected. This picture can probably be explained by the fact that the DPP has been used to working with the Blue Bloc parties in many places, and because there is likely to be more local Social Democrats who remain fairly left-wing on immigration and does not agree with its party leadership that DPP is now palatable partners.

[Diouf]

Government accept DPP's demand to remove productivity demands from health care



As a part of the ongoing negotiations regarding the 2018 budget and the tax reform, the VLAK government and DPP today agreed to remove the productivity demands from the health care sector in 2018 and make a new system to measure performance from 2019.

The five regions are in charge of the health care sector and funded exclusively through state block grants. Since 1999, each of them has had to show a productivity increase of 2% a year if they are to get the full amount of the block grant. Governments have liked this rule for obvious reasons, but especially in the last year or two, many health care employees have complained that there are few areas left inwhich to increase productivity. A campaign that DPP largely adopted and in recent weeks the Social Democrats changed their mind on this issue. Thereby there was a majority for removing these demands, which made the DPP's hand strong in negotiations with the government. The demand is now removed in 2018, and the parties will agree on a new system from 2019 in the coming months. This system will be less rigidly focused on productivity and focus more on a number of different measures of the quality of the health care

The fact that there are regional (and local) elections in the end of November probably made it a bit easier for the government to agree to this change now. The government has focused a lot on economy, taxes in recent months, and this give them a slightly softer profile. Health care make up around 90% of the regional expenses, so to the degree that voters think about the regional elections, health care obviously dominates. However, local elections usually dominate the campaign since there are more issues in play, as well as the possibility for municipalities to raise or lower taxes and fees.

[Diouf]

Bye bye Burqa - the right wing wins internal Liberal battle



After weeks and months of discussions, there is now a clear majority for a so-called masking ban; i.e. a ban on wearing the burqa and niqab in public. The issue reemerged in July when the ECHR decided that a similar ban in Belgium was in accordance with the European Convention on Human Rights. Until then, the legality of it had been doubtful, but now the question received new rounds of discussion in the other parties, pushed by a new proposal from DPP to introduce such a ban.

With the Conservatives in favour of the ban and the Liberal Alliance against, attention quickly shifted to the Liberals whose opinion would probably swing the government one way or another. This question made clear the dividing lines in the party on the question of immigrationa and what liberalism exactly is. MPs were making their opinion clear in public, while Lars Løkke has been treading water on this question. However, in the last week or so, it has become clear that the right wing had a majority in the party. The right wing has been personified by immigration spokesperson Marcus Knuth (right in the picture), a former Foreign Service diplomat, army captain and Lehman Brothers economist, who is the son of a well-known count from Lolland. Knuth stated after the German elections that Angela Merkel's immigration policies had been a disaster, and that he was happy AfD entered parliament in style, which would hopefully create a better balance in the German parliament. All this while forgetting to mention the success of the Liberals' official sister party FDP. This caused a tough response from EU spokesperson Jan E. Jørgensen (left in the picture), who has come to represent the left wing in the party. The Frederiksberg lawyer has been a significant player in local politics for a decade, but has risen to somewhat prominence in recent years as the favourite government MP for most left-wingers due to his socially liberal views on immigration. Some have even speculated whether he could follow MEP Jens Rohde to the Social Liberals, but he seems too loyal to the party after decades on intensive involvement.

A number of things probably helped sway the Liberals in the last week or so. A Megafon poll showed that 66% of Liberal voters agreed with a ban, while only 17% was opposed. Yesterday, the Social Democrats decided to support the ban. Finally, the Liberal Alliance has made clear that their opposition to a ban is not very strong; i.e. they would accept voting for a ban, if the Liberals decided so, without a huge fuss.

It will be interesting to see how many MPs end up defecting. Liberal MP Eva Kjer Hansen has already said that she will not vote in favour of the ban, and perhaps a few Liberal Alliance and Social Democrat MPs could do the same. Kjer Hansen was Minister of Agriculture in the Liberal-only government until the Conservatives made her leave due to accusations of fiddling with pollution numbers. Since then she has been quite mad, not less so since the Conservatives entered the government, and makes no attempt to hide it whenever a decision is not in accordance with her Liberal ideals.

[Diouf]

Government agrees with DPP and Social Liberals on business package



After a long period with focus on the improved S-DPP relationsship, the government has succesfully lured the DPP back into the fold. First with an agreement on significantly lower car taxes, and now an agreement worth 2 billion DKK (0,3 bln euro) a year to improve conditions for businesses. Furthermore, the Social Liberals was included, so it is a broad deal across the blocs, while the Social Democrats stayed out/were kept out. This could help the government's narrative that the Social Democrats are unambitious and unwilling to cooperate on measures to improve the conditions for growth.

The deal includes a number of different aspects. Around 1/4 of the money is spent on the DPP's main focus; lower fees and excises on beers, sodas, sugarproducts and nuts to decrease the border shopping in Germany. The Social Liberals got measures to improve internet connections, longer periods with lower taxes for highly skilled foreigners, circular economy measures as well as incentives to use environmentally friendly heat pumps for busineses and households. The Liberals continue their focus on growth in remote areas with lower fees for camping sites, harbours, hotels and small producers of food and alcohol.  The main focus for the two smaller government parties have been to create a better "shareholder culture" with easier options to invest in shares and better conditions for those that do. The DPP logically rejected most of these things during negotiations, but the final agreement did include easier ways for businesses to allow employees to be paid in company shares, and the possibility for all citizens to create a "shareholder savings account", where you can keep shares worth max 50.000 DKK (7.000 euro) and pay a lower shareholder tax on value increases.

Around half of the deal is financed by giving less money to funding job centers in the municipalities, where unemployed persons take short courses in job seeking and meet their caseworker, while 400 mio DKK will be saved on less funds to DSB, the state-owned train transport company. The remaining money is saved on a number of small measures.

[Diouf]

Government and DPP finally agree on 2018 budget



The government long hoped that they could agree on a mega deal with the DPP that included both the 2018 budget, tax reform and tighter immigration rules. However, as the negotiations resumed after the local elections, the DPP has been very wary of agreeing to this, as they feared too much focus would be on the tax cuts. Instead, leader Kristian Thulesen Dahl has played the role of the responsible statesman and urged the government to split up the negotiations, and agree on next year's budget. The government, and especially Liberal Alliance, wanted one big deal as they fear they would be humiliated if tax reform was postponed for the fourth time in this term, and probably would not give DPP too many concessions in the budget as they doubted whether DPP would ever actually agree to any tax cuts. However, tonight the parties agreed on the 2018 budget, but with a "common understanding" that the marquee tax/migration deal will be in place before christmas. Otherwise, the Liberal Alliance declared that they would not vote in favour of the budget. The 2018 budget in itself focuses on extra funds for the health service and elderly care, educating more police officers and making the house renovation subsidy permanent.

[Diouf]

Waiting for taxcut - Liberal Alliance humiliated again



The past two weeks, most of the focus has been on the Liberal Alliance-DPP quabbles after the Liberal Alliance stated that they would not support the 2018 budget, which they themself agreed upon as part of the government, if there had not been agreement on a big tax/immigration package before it was voted through. This obviously infuriated DPP and made certain that no such deal could be agreed upon this year. Today the Liberal Alliance then had to make another humiliating climbdown and state that yes they would vote through the budget, despite there not being any tax/immigration package. Yet again, Liberal Alliance leader Anders Samuelsen has acted as an arrogant buffoon, and ended up as a clown. I really wonder whether he will stay as leader much longer. In the polling average, the LA is down at 5.5% from the 7.5% they won in 2015, and that number could easily drop further after this charade.

The tax reform is very important for all three government parties. For Løkke and the Liberals, this is the second (and sweetest) part of their 2015 slogan "Make it pay to work". They have already introduced a cash benefit cap, and the second part should then be lowering taxes on small incomes. Liberal Alliance and Conservatives have conceded that toop tax cuts will not take place, so they really need some tax cuts to show that they have at least gained something on this important area, particularly for the Liberal Alliance. Despite another postponement, it it not unthinkable that there will be some tax/immigration deal in the beginning of next year. The DPP can live with lowering taxes for low incomes, although not using too big an amount of money doing so. However, since the government, particularly the Liberals and the civil service, seems unwilling to contemplate many of the DPP's immigration proposals, which will require some sort of a break with international conventiions and/or the ECHR, an agreement will likely be much more limited in scope than imagined. The immigration part will be small tinkerings to try to deport more criminal immigrants and rejected asylum-seekers, which means that the tax cuts will likely be much smaller than the "historic tax cuts" the government hoped to get.

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The development in Berlingske's polling average from the end of 2016 (left) to the end of 2017 (right)



The Red Bloc combined has lost 0.8%, so their lead is now 51.1%-48.8% instead of 51.9%-48.0%. Neither of the three big parties has seen much change. It is clear that the government participation has had two different effects on the two small government parties. The Conservative has regained some confidence with three fairly popular ministers (Party Leader and Justice Minister Søren Pape almost always in top3 in minister popularity lists) and some results in areas of justice (and soon defence as well). The Liberal Alliance has acted crazy too many times, their ministers usually fill up all the bottom positions, and they are constantly pulling fights with the DPP which they can't win, especially on the area of reducing taxes for high earners.

Finally, the Alternative has seen the most significant change, and almost all of it has happened after the summer as can be seen in the collection of polls by Erik Gahner below. This is the period in which the internal divisions in the party has come out into the open with both their political spokesperson and group leader (chief whipish) resigning as a result. Cases of sexual assault in the party was revealed, and party leader Uffe Elbæk and his "boy band" of young males have been accused of driving the party with a sexualized culture and too much partying. Elbæk has already said he will resign after the next election, which further intensifies the internal divisions as people are positioning themselves for the top job. Their partial implosion has benefited the other Red Bloc parties a bit each.



The New Right is quite stable in the polling average, but it reflects a large difference between individual pollsters as can be seen in Erik Gahner's collection below. Them being consistently at the 2%-threshold in a period far from a general election, is another reason why I'm fairly certain they will get in, although if the government actually agrees to some significant immigration and asylum policies, the New Right could lose some of its appeal.

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Political scientist Mikkel Krogsholm has made this diagram based on answers to a "what should I vote test" by local election candidates for the recent local elections. The horizontal axis shows the traditional economic spectrum (outsourcing, taxes, regulations), while the vertical axis show attitudes to refugees and immigrants. Most of the positions are quite similar to the normal picture. The Social Democrat's local candidates are generally more soft on immigration, and most of the opposition to their tougher immigration line is from local candidates and councillors, not voters nor national backbenchers. The Social Liberals' policies are more right wing on economy that both their voters, party members and local candidates, especially since part of the right-wing ended in the Liberal Alliance.

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Government gives up on marquee tax/immigration deal - Liberal Alliance leader under fire



After months of negotiations, the government this week gave up on agreeing on a marquee tax/immigration deal with the DPP. The government's goal has been to pursue "historic tax cuts", while the DPP has demanded a "paradigm shift" in immigration policies. The failure to achieve a big deal on these two crucial right-wing policies illustrate the lack of cohesion in the "blue bloc" and scuppers PM Lars Løkke's hope of really delivering on his 2015 election slogan:"Make it pay to work".

According to media reports, DPP was willing to accept tax cuts of around 7-10 billion DKK a year (1-1.3 billion euro) on the first/lowest parts of your income, if they could get a breakthrough on immigration policy. However, it never really seemed like the parties were close to agreement on immigration. Mostly, because the government does not want to challenge/ditch UN conventions/ECHR decisions, but also because DPP's wishes on immigration were too shattered, focused on the areas with the lowest chance of concessions and included a few crazy ideas that overshadowed much else.

When you look at media statements, primarily from before entering government, both the Liberal Alliance and Conservatives are willing to ditch/bend international conventions, although their resolve has arguably been weakened somewhat by entering into government and because their two party leaders lead the two ministries, where the civil service is perhaps the most opposed to the idea (foreign affairs and justice). Nevertheless, the key is that (at least parts of) the Liberals is not willing to contemplate it, and probably also because PM Løkke is afraid of the international criticism that will follow. If the DPP had focused intensively on one or two key issues (stop for asylum applications in Denmark and take consistent, low number of quota refugees insted and/or ditch ECHR ruling that makes it hard to throw out criminal immigrants), it would have been really hard for the government to defend not agreeing to these proposals. Instead, DPP came up with new points each day, and ended up focusing a lot on a demand that refugees without permanent residence should not be integrated (work, learn Danish etc), but instead "learn rebuilding activities" in isolated "refugee towns" to prepare for going home. This was probably a proposal with less popular support than the two above, and it would go directly against a big deal that Løkke agreed upon with the trade unions a year ago to get refugees into the labour market. A reversal of that deal would humiliate Løkke, and cause a big fight with the unions, making it totally inconceivable for Løkke to agree on. Finally, one of the DPP's many proposals was that immigrants below 18 years in ghettos should not be allowed outside their apartments after 20.00 in the evening; something clearly against the Constitutiton and which caused a predictable uproar.

Now that the marquee deal has been cancelled, the parties will try to agree on a minor deals instead on tax (cuts of around 1 billion DKK (0.13 billion euro)) and immigration (smaller, symbolic tightenings), and then turn their focus to defence and culture, where it should be easier to find agreement. However, since a big tax cut is the raison d’être of the Liberal Alliance, this cancellation is seen as a huge humilation for them, and particularly for party leader Anders Samuelsen, who has been unbearably cocky in years about the great tax cuts he could delive, and making fun of Liberals and Conservatives for not getting more of them through. The party is down to 4.8% in the polling average after winning 7.5% in 2015, and the latest poll from YouGov had them a 3.8% as the smallest party in parliament. Newspaper Jyllands-Posten has talked to 54 of 79 Liberal Alliance local leaders, and 11 of them wanted the party to withdraw from the government. The Liberal Alliance Youth has called for the same to happen, which counts for quite a bit in party which dominates among young voters and with many young activists. So far, the parliamentary group seems relatively quiet, and Samuelsen has a special position as party founder, who created the party from nothing. So he is probably not going to be pushed out or forced to take the party out of the government, but perhaps he might leave as leader to try to save the party.