Danish Competitiveness Hamstrung by High Energy Prices, Industry Says

Odense, DenmarkInternationalIndiaAfricaWhile the energy industry is swimming in a billion-dollar profits, the spike in energy prices has made Danish companies struggle to stay afloat. The Danish industry association is therefore demanding financial compensation from the government to get competitiveness back on track.The past year’s ultra-high prices for gas and electricity have reduced the competitiveness of Danish companies compared to rivals from neighboring countries, the Confederation of Danish Industry (DI) has said.The association estimated that the country’s industry has amassed DKK 19 billion ($2.8 billion) in additional costs for the consumption of electricity and gas. For the sake of comparison, a calculation by consultancy Ea Energianalyse has placed the Danish energy industry’s additional profits at well over DKK 20 billion (nearly $3 billion).”It is a bill that is difficult to pick up when you are competing with foreign countries,” DI deputy director Troels Ranis told Danish media.According to DI, while high energy prices affected most of Europe, there has been a disparity in the countries’ competitiveness. Troels Ranis stressed that several Danish neighbours decided to give the ailing companies a helping hand with exorbitant energy bills, citing Germany that covered up to 70 percent of the extra expenses, as well as similar initiatives in Sweden. Denmark’s failure to do likewise put it at a disadvantage, he argued.“We have lost competitiveness abroad. Asia, the US and America have not had the energy prices that we have seen in Europe,” Jorn Krogager, CEO of the company MAT Dania, which provides solutions for iron casting, machining and assembly. By his own admission, last year, the total bill for electricity rose more than five times.EconomyDanish Bankruptcies Soar to Highs Not Seen Since Last Financial Crisis13 April, 06:35 GMTHe called it “particularly frustrating” that profits over the lats year have ended up “in the wrong places,” labeling the energy industry’s gains “unheard of.””It’s not money they’ve earned. In fact, it is the reverse Robin Hood, where the rich steal from the poor,” Krogager said, calling on politicians to levy a heavy tax on the huge earnings the energy companies have made.According to DI, the Danish government must provide compensation to companies in need, as was the case in Germany and Sweden, in order to get the economy back on track.”Right now, a lot of money has been thrown into play in the countries around us, and this distorts the companies’ competitiveness. Therefore, a targeted, Danish solution is needed, which is based on the needs to ensure that we have a level playing field,” Troels Ranis said. To eliminate the risks of a state-supported spiral, he stressed that the help must only be temporary, targeted and needs-driven.In 2022, the Danish economy was hit by a double whammy of a high inflation unseen in decades and exorbitant energy prices – a crisis exacerbated by the EU’s ill-advised sanctions against Russian energy intended as “punishment” for its special operation in Ukraine. This prompted Copenhagen to present a “tight and responsible” spending plan for 2023, indended to tackle inflation and “get Denmark through tough times,” in the words of Finance Minister Nicolai Wammen.

Source

Leave a Reply

Your email address will not be published. Required fields are marked *