Danish lawmakers agree cash handout to elderly to offset inflation

Danish lawmakers have agreed a cash handout to the elderly and other measures totalling 3.1 billion Danish crowns ($439 million) to cushion the impact of soaring inflation and high energy prices, the finance ministry said on Friday.

Danish lawmakers have agreed on a cash handout to the elderly and other measures totaling 3.1 billion Danish crowns ($439 million) to cushion the impact of soaring inflation and high energy prices, the finance ministry said on Friday. Elderly people on low incomes will each receive a tax-free handout of 5,000 crowns, it said.

"The Danish economy is fundamentally strong, but is challenged by rising prices in the wake of Putin's war in Ukraine," Finance Minister Nicolai Wammen said. "That is why I am glad that we can now lend a hand to some of those who are particularly challenged by inflation."

The measures, which also include a cut to a levy on power prices, will be financed by lowering public investments, which the ministry said will help avoid pushing prices up. Their impact on inflation will be zero, it said. The central bank has previously warned that compensating low-income and elderly Danes with cash handouts to ease the impact of inflation could intensify price pressures on an economy already running on all cylinders.

Still, the Danish measures are less wide-reaching than similar ones taken in some other European countries. Danish lawmakers have previously agreed to share a 2 billion crown subsidy among 419,000 households hard hit by rising energy bills.

Friday's deal also included putting aside 53.5 billion crowns between 2024 and 2040 to fund the country's green transition through measures such as developing offshore wind energy, reforestation, and sucking carbon out of the atmosphere. ($1 = 7.0670 Danish crowns)

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