Denmark Gets Smallest Government in 40 Years as DPP Opts Out

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Lars Loekke Rasmussen will seek to govern a minority administration consisting only of his Liberal Party after the anti-immigration Danish People’s Party and other potential partners opted to stay out of a broader coalition.

The new government, with just 34 of the parliament’s 179 seats, will be Denmark’s smallest since 1973. Back then, the administration lasted just 14 months after failing to find common ground with its allies in parliament.

The 51-year-old pledged not to raise taxes over the next four years and said he will seek overall reductions and to cut marginal rates next year while pursuing a structurally balanced budget by 2020. The government will reduce investments and lower foreign aid and support for asylum seekers.

“There’s no majority for any of it,” Loekke Rasmussen, who also served as prime minister from 2009 until 2011, said at a press briefing in Copenhagen. “But we’re at ease with that because I’ve carried out a series of talks that made me very convinced that most of it is doable.”

He replaces Social Democrat Helle Thorning-Schmidt, whose bloc lost its majority in the June 18 elections after four years in power. The Danish People’s Party, which campaigned on promises of border controls, considerably stricter immigration laws and more welfare spending for Danes, abandoned coalition talks with Loekke Rasmussen after the two failed to agree on a platform.

Claus Hjort Frederiksen was named finance minister, a post he also held under Loekke Rasmussen’s previous premiership. Kristian Jensen, a former tax minister, will become foreign minister.

Loekke Rasmussen also reaffirmed the nation’s commitment to its euro-peg and said Denmark will hold a referendum on its opt-outs on European Union judicial policy before Christmas.

To stay in power, the new Cabinet will need to bridge political gaps with the three parties that also form part of the winning bloc. The Liberal Party -- a pro-EU group -- campaigned on promises to cut taxes and place a cap on welfare spending. That policy is backed by the Liberal Alliance and the Conservatives, but rejected by the Danish People’s Party, which emerged as the biggest group in the winning bloc.

DPP Chairman Kristian Thulesen Dahl said his party will have more political influence from outside the government.