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Leftwing politicians in western Europe
have not had the best crisis. But few have had such a torrid time
as Helle Thorning-Schmidt, Denmark’s prime minister.
A year after she broke a losing streak by centre-left leaders
in Europe and became the new standard-bearer for social democracy
on the continent, Ms Thorning-Schmidt’s party has plunged
to its lowest opinion poll ratings in at least a century.
A recent survey for Børsen
newspaper putting the Social Democrats on less than 17 per cent,
down sharply from the 25 per cent she received in last year’s
general elections.
“For the Social Democrat party it is a huge crisis. I don’t
think they have registered lower figures in the history of polling,”
says Rune Stubager, associate professor of politics at Aarhus
University.
Ms Thorning-Schmidt, Denmark’s
first woman prime minister, reshuffled her cabinet on Tuesday
in an attempt to give fresh impetus to her government. That followed
five weeks of inaction due to leadership elections at the Socialist
People’s party, a junior coalition partner that has seen
its share of the vote almost halve since the elections.
Government insiders admit that the polls make for tough reading
but they stress the stamina and fighting qualities of the prime
minister, and point to another recent poll, this time from Gallup,
that gives the Social Democrats 21 per cent – their best
figures in five months. The centre-right opposition bloc was still
far out in the lead on 53 per cent.
“It is not good enough,” Ms Thorning-Schmidt said on
Danish TV earlier this month. “I obviously take the polls
seriously. But I am completely convinced that it is the Social
Democrats’ job to take Denmark through the crisis.”
The prime minister never had the easiest
task in charge of a fractious coalition and a faltering economy
that has brushed with recession repeatedly over the past two years.
But the daughter-in-law of former UK Labour party leader Neil
Kinnock has alienated her own voters and those further on the
left by pushing through a tax package together with the centre-right
opposition and by scrapping a series of pre-election policies.
This has allowed the opposition, in power for a decade until last
year and still led by former prime minister Lars Løkke
Rasmussen, to paint the government as a breaker of promises after
leftwing parties had to drop a number of costly proposals, such
as a fares cut on public transport. Others such as a congestion
charge for Copenhagen were unceremoniously ditched despite having
been repeatedly touted.
But the biggest damage to the Social
Democrats came from teaming up with the centre-right to pass tax
reform that benefited some of the biggest earners at the expense
of old age pensions and unemployment benefits, to the amazement
of some leftwing parties. Passing next year’s budget could
also require rightwing help, making it another potential flashpoint.
Denmark was the hardest hit of the Nordic countries by the financial
crisis, aside from Iceland, as highly indebted households caused
big credit losses for banks with several smaller lenders going
bust. But the Danish krone has proved to be popular in foreign
exchange markets as the country’s peg to the euro means that
it is a potentially lucrative trade if the single currency breaks
up.
The Danish central bank has responded by pushing interest rates
to historic lows, and even taking the deposit rates that it pays
banks into negative territory. That means Danish short-term mortgage
rates, highly popular with the public, are at record lows and
getting ever nearer to zero.
That has done little to help Ms Thorning-Schmidt, however, as
second-quarter GDP figures showed a decline.
Mr Stubager says much of the government’s
strategy is based on a hope that the Danish economy will rebound
before the next elections. “The question is whether it will
be soon enough and strong enough for them to be able to claim
they did it through their policies,” he adds.
The starting point for the current government was not auspicious
with policy differences among the minority coalition partners
from the beginning.
Then Ms Thorning-Schmidt and other ministers were distracted by
Denmark’s EU presidency in the first half of this year. “This
was the worst possible timing – it is really very difficult
to focus both internally and on Europe,” one government insider
says.
One irony of the recent polls is that
there is “a heightened incentive to stay in office as long
as possible”, Mr Stubager says, as the centre-right would
storm to victory currently.
Ms Thorning-Schmidt urges the government not to obsess about the
terrible polls and instead plough on with its policies. “What
we should do is not become nervous over the polls. We need to
act every single day.”
