All the parties in the Danish Parliament and the Government on Thursday launched an extensive bailout package to aid Danish economy and help Danish wage and salary earners, students and undertakings through difficult times as stated by the Danish Ministry of Finance.
The Government and the parties have agreed on the following temporary compensation schemes:
- Compensation scheme for business owners. Business owners are not directly covered by the tripartite agreement on compensation of wages and salaries, even though their livelihoods may also be under threat. The Government and the parties in the Danish Parliament thus wish to ensure compensation to business owners experiencing large declines in sales, cf. appendix 1.
- Compensation for undertakings’ overheads. The tripartite agreement on compensation of wages and salaries provided increased employee job security and the undertakings received significant subsidies for the wage and salary costs. The Government and the parties in the Danish Parliament now also agree to cover certain overheads, which the undertakings no longer have sales to cover, cf. appendix 2.
In addition, the Government and the parties agree on a number of other measures:
- Increased access to export credit. To support in particular small and medium-sized Danish export businesses, a new liquidity guarantee is set up under EKF – Denmark’s Export Credit Agency. This will smooth the path for new loans for DKK 1.25bn for the benefit of small and medium-sized export businesses.
- Increased frame of government-guaranteed credit schemes. The frame of government-guaranteed credit schemes for small and medium-sized enterprises is extended. For large undertakings, the guarantee frame is increased by DKK 25bn, while a guarantee frame for small and medium-sized enterprises is set up for DKK 17.5bn and an appertaining loss frame of approx. DKK 5bn, which will facilitate lending up to DKK 25bn.
- Public procurement to support undertakings. Public procurement will help support undertakings – and thereby wage and salary earners – in getting through the crisis. The parties to the agreement agree that this will apply to the State, and the Government will open a dialogue with the National Association of Local Authorities in Denmark (KL) and the Danish Regions on the possibilities of doing the same in the municipalities and the regions.
- Government guarantee to the Danish Travel Guarantee Fund. In order to help travel agencies in getting through this extraordinary crisis, the Government and the parties to the agreement have agreed to strengthen the Danish Travel Guarantee Fund by providing a government guarantee of DKK 1.5bn.
- Increased access to unemployment benefits and sickness benefits. In order to ward off the negative effects of the spreading of COVID-19 on unemployment benefits and sickness benefits, the parties to the agreement agree ease the conditions for recipients of unemployment benefits and sickness benefits temporarily during the time come.
- Increased possibilities of borrowing for students. Some trainees and students at higher educations will lose their jobs due to COVID-19. Therefore, students and trainees in youth educations will obtain the right to take out additional student loans of up to DKK 6,388 per month in addition to the applicable student grants and loans available.
Read the entire agreement here.
Fact sheet on the bailout package is available here.