Danish housing market is unsustainable the EU warns and Denmark reduce deficit to 3 percent


Tuesday, 07 June 2011
The ailing Danish economy cane under the microscope today as the EU Commission seem to have but more stress into an already shaky house. The Danish housing market was examined was today when Brussels too a closer look at the Danish economy.
As we hinted yesterday the EU for its recommendations, it wrote that there is need for reform of the Danish housing market to stabilize the economy after the financial crisis. And that means reforming both the Danish mortgage system and housing tax.


Already yesterday the EU Commission signalled in a draft assessment of Denmark that it was deeply concerned about the huge private debt in Denmark due to the high home prices.

Today the Danes are predominantly occupied only by loans with adjustable interest rates. And it can be very problematic for both the Danish economy and for the entire financial sector in Denmark, warns the Commission, when rates start rising again.

In the final recommendations of the commission writes further that Denmark's excessive deficit should be reduced to below three percent of GDP by 2013. In this context it is important that the government did not fall into the temptation to turn up the public expenditure, if it proves to be better with the economy than expected.

Finally, Denmark should make efforts to ensure that employed persons should not withdraw from the labour prematurely, and then the big drop in education should be reversed.

Professor of Political Science Peter Nedergaard believes that Denmark can disregard these recommendations. In fact it is ourselves who have asked the EU to keep an eye on the economy, "he told Danish radio news.
by Team

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