Denmark has one of the most hostile policies to immigration in Europe, as successive administrations have succumbed to the pressure of the far-right, which participates in government by proxy. That policy is now having an economic effect, which may not be all that pleasant.
In March, the Danish government celebrated its 50th anti-immigration measure.
The self-described liberal government has ruled by the grace of the Danish People’s Party for years, allowing the far-right to impose its political agenda, particularly when it comes to immigration and human rights. In January 2016, Denmark even voted in a law that allows the government to seize the jewelry and cash of refugees, in a law that echoed nasty historical memories.
The political model is a win-win for both the liberals and the far-right, the former because they keep the mantle of governance, the latter, because they are not exposed to the detrimental effect government has on far-right populist parties, as in the case of the True Finns. In fact, the model is so popular that the Swedish “liberal” right is considering emulating it, although that idea has not as yet rallied the required consensus.
But, in Demark, the anti-immigration sentiment has virtually no opposition, with the Social Democrats having joined the consensus. Even the former Prime Minister, Helle Thorning-Schmidt, campaigned on an anti-immigration slogan in 2015.
Since February, the Danish economy experiences labour shortages across the value chain, from high to middle and even low-skill levels. When unemployment reached 4,3%, Denmark’s economic recovery started being threatened by the absence of workers. In time, this could hurt foreign direct investment.
What’s more, the Danish Ministry of Finance has recently calculated that anyone making more than 200,000 kroner (approximately €26,000) makes a positive tax contribution to the system. That is a full-time job on minimum pay, of the kind usually taken up by refugees.
According to a Bloomberg report, labour market integration in Denmark is easier for European migrants, who tend to contribute from year one. That is largely because Europeans, among other things, are entitled to labour market participation and often have more skills.
But, Finance Minister Kristian Jensen suggests that if third country nationals were better integrated into the labour market, immigrants would pay for themselves. The bottom line is that if such immigrants were supported to join the labour market, they would by the government’s calculations add 20 bn kroner to the economy (€3 bin), equal to Denmark’s net borrowing requirements for 2017.
Adding such value in the economy is hard because since June 2015 the Danish government has cut benefits for new arrivals and has made residence permits dependent on applicants having a job and speaking Danish.
These are policies that make refugee integration in the labour market harder, although they also are successful in discouraging new arrivals. Companies have less scope to train workers to fit the bespoke needs of the Danish economy, the sector, and the firm. But, immigration policies are getting tighter.