Danish lawmakers on Friday agreed on an economic aid package worth 5.05 billion Danish crowns ($664 million) to soften the blow from rocketing energy prices, going against a warning from the central bank.
Denmark is, like the rest of Europe, grappling with how to help households and companies deal with rising consumer prices in the wake of the pandemic and Russia’s invasion of Ukraine.
The package included a cut to a levy on power prices and cash handouts to families with young children.
This week, the central bank warned against cushioning against higher energy prices by cutting levies, since that would result in even higher prices and discourage energy saving.
Finance Minister Nicolai Wammen insisted the measure would not boost inflation.
“What we’re doing now is economically sound, because it’s important that we don’t fan the inflation flames.”
Denmark has previously agreed to provide cash handouts to the elderly and has capped annual rent increases for the next two years to help struggling households.