Economic analysis

How Denmark got ahead of the COVID-19 economic crisis

The Danish ambassador in Canada explains the country's ambitious measures to protect workers from the shutdown

This post has been updated

Prime Minister Justin Trudeau likely learned a lot more about Denmark during his self-isolation at Rideau Cottage as his government tries to find the right stimulus package to keep Canada’s economy from collapsing amid the COVID-19 crisis.

Business groups continue to cite the Scandinavian country’s decision to cover 75 per cent of  employee salaries as the right measure to help avoid mass layoffs. Canada has proposed a comparatively paltry 10-per-cent subsidy, but Trudeau said on Wednesday that his government is “looking very carefully at the models put forward in other parts of the world like Denmark and Germany and others and looking at how we can make.. equivalent things work here in Canada.” He promised to have “more to say on that in the coming days.” UPDATE: On Friday Trudeau announced Ottawa would cover up to 75 per cent of salaries for small- and medium-sized businesses.

Maclean’s reached out to Hanne Fugl Eskjær, the Danish ambassador in Canada, to learn more about the spread of the coronavirus in her home country and the measures taken to date. (The email interview has been edited and condensed).

READ: Trudeau’s daily coronavirus update: We’re working to ‘protect people and the economy’ (Full Transcript)

Q: When did Denmark first see signs of COVID-19 and how did the country react?

A: Denmark’s first case of COVID-19 occurred on Feb. 27. A Danish journalist that returned from abroad. As of March 26, there were 1,851 confirmed cases of COVID-19 in Denmark and 41 deaths.

The Danish Government took a number of measures to minimize the spread of the virus. All educational institutions, day cares, public institutions were closed (except police and healthcare facilities) and Prime Minister Mette Frederiksen strongly encouraged all Danes to work from home if possible.

The government closed Denmark’s borders on March 14 to everyone except for Danish citizens and people with a worthy purpose. All Danes abroad were strongly encouraged to return to Denmark as soon as possible. Since then, all gatherings of more than 10 people have been prohibited and all restaurants, cafes, bars, malls and sports facilities have been closed. The measures are currently in effect until April 13.

Q: What’s been the reaction from people in Denmark? 

A: Generally, Danes have a high degree of trust in their public authorities. The measures taken by the government enjoy wide support of the parties across the political spectrum of the Danish parliament. The Prime Minister has been very clear about the fact that the government is trying to address a situation that is constantly evolving.

READ: Coronavirus in Canada: These charts show how our fight to ‘flatten the curve’ is going

Q: What measures has the government taken for employees?

A: As for employees at private companies, the Danish government has agreed to cover 75 per cent (up to 23,000 Danish Krones (DKK) — or about  $4,760 Canadian — per month of the cost of employees’ salaries as long as those companies don’t let people go. This applies to companies that, due to COVID-19, are experiencing a decline in orders and as a consequence would be forced to lay of 30 per cent of their workforce or at least 50 employees. Employees in the public sector are working from home with no consequences for their salary.

Q: What measures has the government taken for employers?

A: All parties in the Danish parliament have supported a package of measures to support employers/companies. Some of those include:

  • Temporary compensation to self-employed persons and freelancers who experience large declines in their turnover due to COVID-19. A person can get 75 per cent of their expected income loss covered, to a maximum of DKK 23,000 (C$4,760) per month. They need to document an expected loss of income of at least 30 per cent as a consequence of COVID-19 during the period of March 9 to June 9, 2020.
  • Compensation for some corporate related expenses (such as rent, interest rate expenses, leasing expenses).
  • Increased access to export credit with loans with a particular focus on small and medium-sized Danish export companies [and] increased government-guaranteed loans for large, medium and small-sized companies.

There is also a temporary postponement of payment of taxes and entitlement to sickness benefits for employers and self-employed as a result of COVID-19.

READ: Amid mass layoffs from COVID-19, three in 10 Canadians worry they can’t pay their rent or mortgage on time

Q: What is your opinion on what’s happening in parts of the world, such as the U.S. and Canada?

A: I have followed the developments here in Canada closely and see similarities in the way the COVID-19 crisis is being handled in our two countries. Clear and daily communication from the government; support for the taken measures from other political parties and key stakeholders; a package of measures aiming at minimizing the spread of the virus while at the same time minimizing the negative impacts on the economy and the population. Lastly, I also recognize and admire Canada’s focus on solving this crisis and getting its people safely home in partnership with its international partners, Denmark being one of them.

Q: Where are you working from these days and how are you spending your days during the crisis (other than fielding interviews from journalists)?

A: At the embassy, we are working as few people as possible at the moment to minimize the risk of getting ill. And we rotate in and out to avoid contact. It is important for me to keep my colleagues safe.

Our main focus is to help our Danish travelers — both here in Canada and in other countries — getting safely back home to Denmark, including providing them with the most updated information around  travel restrictions and possibilities.

We also work closely with our consuls in many Canadian provinces and we coordinate closely with colleagues from the EU member states and the Nordic countries. Even though all meetings have to be virtual, we know that we can only get through this crisis if we help each other.

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