Danish Govt quits

Press, 4 September 1982, Page 8

Danish Govt quits

NZPA Copenhagen Denmark's eight-month-old minority Government resigned yesterday after failing to win Parliamentary approval for economic reforms. The Prime Minister (Mr Anker Joergensen) is submitting the resignation of the Social Democratic Cabinet to Queen Margrethe. The Government is resigning after having failed to find sufficient Parliamentary support for its incomes policy measures, public spending cuts, and revenue increases designed to reduce Denmark’s growing Budget and balance of payments deficits. But Mr Joergensen said yesterday that fresh elections would not be called to try to break the political deadlock. He said that nonSocialist parties would be given a chance to find a workable Government.Mr Joergensen, who has

led successive administrations since 1975, told Danish radio that he would let the leading Rightist opposition parties, the.j/enstre Liberals and the Conservatives, assume the task of finding a combination to handle Denmark's economic problems. Denmark suffers from unemployment and inflation of around 10 per cent, a crisis

in the important farming sector, widening balance oi payments deficits, a net foreign debt of around 125 billion crowns (SNZ2O billion), and enormous State deficits which economists said have buoyed domestic interest levels and caused business investment levels to stagnate. After December’s General Election, the minority Social Democratic Government depended on the support of the Left-wing ■ Socialist People's Party and the Centrist Radicals for approval of its economic policies. But Parliamentary sources said that the Government could not win their support for a reform programme because the two disagreed over different ingredients of the plan. The measures contained controversial schemes to introduce income tax reforms and new taxes on pension and life insurance funds.