COPENHAGEN (Reuters) - Denmark's centre-right government Wednesday agreed to tighten border controls at the demand of a populist party that has been holding up approval of its 2020 economic plan.
However, despite getting its way on tougher frontier checks, the Danish People's Party said the two sides were still far apart in negotiations over pension reform, a key element of the government's scheme to put the state's finances in order.
The government is in negotiations with the anti-immigration Danish People's Party and the centrist Social-Liberal Party to try to secure support for the economic plan. The main opposition party, the Social Democrats, left the talks eight days ago.
Success or failure in the negotiations could determine the timing of parliamentary elections in Denmark.
Liberal Prime Minister Lars Lokke Rasmussen must hold parliamentary elections by mid-November, but he can call an early ballot any time with just three weeks' notice.
"We have agreed on permanent border controls which we will implement as soon as possible," Finance Minister Claus Hjort Frederiksen said on TV2 News after the borders deal with the Danish People's Party and the small Christian Democratic party.
The new controls at all of Denmark's borders will be within the scope of the Schengen agreement, the Finance Ministry said in a statement.
The Schengen treaty abolished border controls within Europe and currently consists of 25 nations.
The political deal will mean investing in new border control facilities, more customs officials, extensive video surveillance of cars crossing Danish borders and rapid police assistance if customs officers need it, the statement said.
The European Union's executive -- which enforces the Schengen treaty -- said it would request further details from the Danish authorities in order to assess the controls.
"It should be clear that the (European) Commission cannot and will not accept any attempt to roll back the EU treaty, either for free movement of goods or persons at internal borders," spokeswoman Pia Ahrenkilde Hansen said in a statement.
The border control plan has been criticised by some pro-European Union Danes who say Denmark should not be raising new barriers in Europe just months before it takes over the presidency of the EU at the beginning of 2012.
Denmark has a land border with Germany and is linked by bridge to Sweden in addition to its entry points at airports and sea ports.
The parties agreed to earmark up to 150 million Danish crowns (17.70 million pounds) for investments in new control equipment and data systems, as well as up to 35 million in 2011, rising to up to 119 million in 2015, for more customs officials and a strengthened police presence, the ministry said.
Frederiksen said he was convinced that the new controls would help curb crime and boost security in Denmark, but Danish People's Party leader Pia Kjaersgaard made clear there was no similar breakthrough on proposals for pension reform.
"We are still far from reaching the goal of agreeing on a retirement reform," Kjaersgaard said on TV 2 News.
The government's pension reform plan aims to scrap an early pension deal that now lets Danes retire at age 60 instead of 65 and to bring forward an increase in the general retirement age to 67. The government says early pensions are far too costly.
Kjaersgaard, whose party's support is crucial for the Liberal-Conservative minority coalition government, said the talks would continue.
"This is not over, we are still working on all of the issues which this entire pension reform and Denmark's economic situation has led to, and it is not the case that we are done for today, or tomorrow," she said.
Reporting by John Acher, Mette Fraende and Erik Matzen; additional reporting by Charlie Dunmore in Brussels; editing by Stephen Nisbet