March 18, 2020 / 3:50 PM / 12 days ago

Denmark plans $6 billion aid package for small businesses

COPENHAGEN, March 18 (Reuters) - Denmark on Wednesday proposed an economic aid package worth nearly $6 billion to help small businesses cover most of the losses in revenue as a result of the coronavirus outbreak, its finance minister said.

Under the programme that will last for three months, small business that see revenue fall by more than 30% will get up to 75% of their lost revenue covered by the state, Finance Minister Nicolai Wammen said at a press conference.

The package, which will also help small businesses cover some of their fixed expenses, will cost the state some 40 billion Danish crowns ($5.8 billion), the minister said.

On Tuesday, Prime Minister Mette Frederiksen ordered restaurants, bars, cafes, nightclubs, gyms, tanning centres and tattoo parlours to be shut until March 30, one of several drastic moves in the country to curb the spread of coronavirus.

The plan announced on Wednesday, which still needs approval in parliament, will be a significant addition to the measures already taken by the government to help companies and employees cushion the effect of tough measures to curb the spread of coronavirus.

With government debt at around 35% of GDP, way below the OECD average, and a budget close to being balanced, Denmark has plenty of scope to raise spending, according to economists.

“Denmark is one of the very few countries in the world that has strong enough public finances to take such a step,” said Helge Pedersen, chief economist at Nordea in Copenhagen.

$1 = 6.8802 Danish crowns Reporting by Jacob Gronholt-Pedersen; editing by David Evans

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