Following the lead of many other countries around the world, Denmark’s government has agreed to extend a 100 billion kroner (USD 17.8 billion) credit line to the nation’s banks. The new bill will be presented to parliament this week, where it is expected to speedily pass and come into effect in February.
The Ministry of Economic and Business Affairs stated: “The credit package is aimed at combating the risk of businesses and individuals ending up in a credit pinch where they are unable to loan money from financial and mortgage institutes for sound projects.”
The AFP news service reports that Denmark’s banks will have until 30 June to take advantage of the credit lines. Loan interest will be determined on a case-by-case basis, with financially-troubled banks paying higher interest rates of up to 10 percent.
Several ministers from the Danish government agreed that the credit package was a necessary step. Economic and Business Affairs Minister Lene Espersen and Finance Minister Lars Loekke Rasmussen made a joint statement saying: “If we don’t take action, there is a significant risk that even healthy businesses might not be able to loan enough cash to secure their continued operations, workplaces and growth, which would accelerate further the downturn in the economy. It is this negative spiral that a broad majority in parliament have agreed to stop.”