Denmark’s unemployed to get benefits extension

denmarkThere’s relief for some 30,000 unemployed whose benefits were set to expire later this year. The government has decided to extend the benefits period to four years.

With one of Northern Europe’s highest unemployment rates, above 8 per cent, Denmark is counting the cost of benefits at a time when growth in the economy is sluggish. Although Denmark remains below the EU average, most its Scandinavian neighbours are far more successful at finding jobs for their citizens.

The two year period of benefits, set to expire this year following a law passed by the previous government will now be extended to four years, following a repeal. However, the amount awarded will be reduced to 60 per cent of their previous cheques.  It will be backed by an insurance plan backed by state funds but financed by an increase from workers contributions to the fund by 30 kroner a month.

“We have to do this because growth has been slower than expected,” said Prime Minister Helle Thorning-Schmidt. “The economy looks like it’ll continue to grow sluggishly. Creating jobs, and supporting those without a job has been our top priority.”

The Economy Ministry has predicted a moot 0.7 per cent growth for 2013, but  Jes Asmussen, chief economist at Handelsbanken, is skeptical of that figure and thinks they are being over optimistic.

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