HELLE THORNING-SCHMIDT, daughter-in-law of British Labour Party grandee Neil Kinnock, is poised to become Denmark’s first-ever woman prime minister should opinion polls ahead of the country’s September 15th general election hold true.
Polls released over the weekend showed a firm swing to the left and a strengthening belief in Ms Thorning-Schmidt’s abilities to tackle a wilting Danish economy. Though she was widely denigrated as a political ingénue and ridiculed for her penchant for expensive handbags when elected leader of the social democrats in 2005, Ms Thorning-Schmidt (who is married to Baron Kinnock’s only son, Stephen) has since emerged as a wily political operator.
Victory for her and her left-wing allies would represent the biggest shake-up in Danish politics for a decade.
The ruling right-wing coalition, propped up since 2001 by the reactionary and fiercely anti-immigration Danish People’s Party (DPP), won three consecutive elections but has seen its popularity crumble in tandem with a declining economy.
Denmark’s fall from economic health, while not as dramatic as Ireland’s, has been rapid. Basking in the glow of booming exports, negligible unemployment and a hefty budget surplus, a cocky finance minister quipped in 2006 that “We’ll end up owning the whole world.” The remark came back to haunt the liberal-conservative government as a housing bubble exploded, dole queues lengthened and Danish banks and businesses were sucked into the global financial crisis.
As things now stand, Denmark is the only Nordic economy officially in recession. Gross domestic product (GDP) for the fourth quarter of last year contracted and shrank again during the first quarter of 2011. Figures scheduled for release tomorrow could well show the recession deepening.
Early last week, the government stunned the country by raising its proposed budget deficit for 2012 by 24 per cent to the equivalent of €11.4 billion, or 4.6 per cent of GDP. A stimulus deal announced to kick-start the housing market by waiving stamp duties was slammed by economists as inadequate and rejected outright by the DPP, on whose votes it depended.
Broadly speaking, Danish voters must now choose between two recipes for extracting the country from the mess. The government, led by Lars Løkke Rasmussen – who got the job by default when his predecessor, Anders Fogh Rasmussen, resigned to become secretary general of the North Atlantic Treaty Organisation – favours spending cuts. It plans to rebalance the books by slashing unemployment pay, early retirement schemes and student grants.
Ms Thorning-Schmidt, meanwhile, is bent on spending her way out of the crisis and says Denmark’s triple A credit rating can be used to borrow money for investment in education and research which would in turn trigger growth and create jobs.
With around 20 per cent of the electorate still undecided on which economic model is preferable, another clear trend has emerged strongly – supporters of the liberal-conservative government are increasingly uncomfortable with its reliance on the reactionary DPP.
Yesterday, the conservatives said they would cross the right-left parliamentary divide to seek sensible economic deals in future rather than allow the DPP trade its votes in return for draconian clampdowns on immigrants.
So, regardless of whether the Danes vote for a centre-right or centre-left administration, the grip of the reactionary right on immigration policy already looks to have been loosened.