Tonight’s political deal over tax policies has an element of “much ado about nothing” or alternatively “I told you so”.
“Much ado about nothing” because we (or rather: The Danes. Or rather: Danish political reporters) did not get the election everybody – well, every political reporter – had been yakking about. “I told you so!” because, well, I told you so: In terms of politics, the question was if the government would want to include the Social Liberals and Ny Alliance in the final negotiations (answer: no) over an agreement with the Danish People’s Party. In terms of policy, the question was whether tax cuts would come in the high end of the scale – as the Conservatives wanted – or the middle of the scale – as the DPP wanted (answer: the middle of the scale).
So, the government has its deal. The DPP a policy victory. The Conservatives a pretty bloody nose.
And what about the opposition? Well, in a way it could be said to be a little surprising that the government put so little effort into negotiations with the Social Democrats, the Social Liberals and Ny Alliance. On the other hand, if the PM never aimed at an early election, there was really no need for an extended deal: The tax cuts will go into the 2008 budget and people will see the effects as of January.
One topic for discussion could be: The Social Liberals and Ny Alliance have lost in policy terms in the short run, but will this really be a problem in the longer run? And: What if the Conservatives start losing voters to the Social Liberals and Ny Alliance during the autumn?
I’m lazy tonight, so I’ll just link to Berlingske Tidende’s coverage: 1, 2, 3.
Update: The economists are not happy.