Denmark

Socialist Party leaves Coalition Government


Published

The Socialist Party (Socialistisk Folkeparti; SF) has announced that it is leaving the government, although it will still give support to the coalition.

Annette Vilhelmsen has announced that she will also step down as the Socialist Party Chairman after an internal split emerged over the sale of 25% of Dong Energy shares to investors including Goldman Sachs. The deal was, however, approved by the Danish Parliament’s Finance Committee yesterday.

Prime Minister Thorning-Schmidt will now be forced into a Cabinet reshuffle as the Socialist Party leave six posts vacant including foreign minister, health minister, climate minister, tax minister, transport minister and the Minister of Integration Children and Social Affairs. The Prime Minister will have to find the six new Ministers from within the two parties remaining in the coalition, her Social Democrat Party (Socialdemokraterne) and the Danish Social Liberal Party (Det Radikale Venstre).

The two remaining parties in the coalition hold 61 of the 179 seats in the Folketing or Parliament. They have relied, so far, on the support of the 16 seats held by the Socialist Party, Red-Green Alliance which has 12 seats but remained outside the coalition since the 2011 election and two others. It remains to be seen how long this tenuous arrangement can continue, especially with the internal strife that has emerged within the Socialist Party.

The press release as published on the Dong Energy website is as follows:

“The agreement on capital increase in DONG Energy has been approved by the Danish Parliament’s Finance Committee

30.01.2014 14:13

Today, the Danish Parliament’s Finance Committee approved the agreement on capital investment in DONG Energy of approx. DKK 13 billion. The investment comes partly from new investors, ATP, PFA, and Goldman Sachs, and partly from existing minority shareholders, SEAS-NVE, SYD ENERGI, Insero Horsens and Nyfors Entreprise. All the regulatory approvals necessary to implementing this agreement are thus ensured.

Implementation of the agreement is now only subject to standard terms and conditions which must be fulfilled on the date of the implementation of the agreement. It is expected that the agreement can be implemented in connection with an extraordinary general meeting expected to be held in February 2014.

The content of this company announcement does not affect DONG Energy’s previously announced expectations to the financial result for the financial year 2013 or the expected investment level for 2013-2014″.

More detailed briefing on the politics and risk of doing business in this country is available to clients and subscribers. If you would like to know more then please contact enquiries@tradebridgeconsultants.com