COPENHAGEN (Reuters) - The Danish government’s main supporting party has ruled out tax cuts promised by Prime Minister Lars Lokke Rasmussen during last summer’s election campaign, putting pressure on the minority government.
The chairman of the allied party, the Danish People’s Party (DF), said the cost of taking in migrants and refugees would make in impossible to lower taxes.
“There is simply no money for it,” DF chairman Kristian Thulesen Dahl told broadcaster DR Wednesday night. “The money will be spent on refugees and migrants.
“And to the extent that there is money to spare, it must be used to strengthen the welfare,” Dahl said. The DF is anti-immigrant and EU-sceptical but a strong advocate for maintaining Denmark’s generous level of welfare subsidies.
However, another supporting party, The Liberal Alliance (LA), threatened in January to bring down the Rasumussen government if it did not deliver the promised tax cuts. It later said it would no longer guarantee the survival of the government but stopped short of bringing it down.
Rasmussen’s ruling Liberal Party and LA both said they still believed room for tax cuts could be found in negotiations scheduled for after a summer break.
Rasmussen’s one-party government only holds 34 of 179 seats in parliament, making it the narrowest Danish government for decades. It can stay in power only as long as it is supported by DF, LA and the Conservative Party.
Those four parties holds only one more seat in parliament than the Social Democrat-led opposition. The Social Democrats have also said they see no room for tax cuts for the time being.
The number of asylum seekers in Denmark rose to more than 21,000 last year from 14,815 in 2014. The government expects it will rise to around 25,000 this year.
On Tuesday, the government raised its forecast for Denmark’s population growth by 2020 twofold, or by 100,000 persons, from the latest forecast in May. It said more spending would be needed to maintain the level of welfare subsidies.
In January, the government passed laws aimed at deterring refugees from seeking asylum in Denmark. The controversial measures included confiscating valuables from would-be migrants to pay for their stay.
Editing by Larry King