Denmark's 'red bloc' topples government

[September 16, 2011]  COPENHAGEN, Denmark (AP) -- Denmark's prime minister-designate started work Friday on molding a united government from a scattered "red bloc" of ex-communists and pro-market liberals that ousted a right-wing coalition in a parliamentary election.

Social Democratic leader Helle Thorning-Schmidt, 44, is set to become Denmark's first female head of government after her alliance secured 92 seats and a narrow majority in the 179-seat Folketing.

The outcome of the ballot Thursday ended 10 years of center-right rule and cut the influence of the Danish People's Party, a noisy anti-immigration group that had used its leverage in the legislature to clamp down on asylum-seekers, especially Muslims.

Thorning-Schmidt now faces the challenge of crafting a joint platform for her diverse coalition of former Marxists, environmentalists, Social Democrats and Social Liberals. The "red bloc" parties don't agree on taxes and welfare cuts needed to shore up public finances amid Europe's debt crisis.

"What we need to start doing is to get a grip on the economy. That is what we need a new government for," Thorning-Schmidt told Denmark's TV2 on Friday morning.

Social Liberal leader Margrethe Vestager -- whose party straddles the middle of Danish politics -- opposes Thorning-Schmidt's plans for tax hikes for wealthy Danes. And unlike the left-wing parties, she approved the previous government's plans to phase out a costly early retirement scheme.

Vestager said she won't back away from that agreement.

"We have made a deal which we believe is really good. It means that we will get more money in the chest and a sound economical starting point," she said.

The outgoing government's austerity measures also include gradually raising the retirement age by two years to 67 by 2020 and trimming benefit periods for the unemployed.

It said the measures were needed to safeguard the welfare system while balancing the budget. After years of surpluses, the government projects budget deficits of 3.8 percent of gross domestic product in 2011 and 4.6 percent in 2012.

Outgoing Prime Minister Lars Loekke Rasmussen handed in his resignation Friday to Queen Margrethe, Denmark's figurehead monarch. His Liberals gained one seat and remain the biggest group in Parliament but lost power because their Conservative coalition partner dropped 10 seats while the Danish People's Party -- which backed them in Parliament -- lost three.

The power shift isn't likely to yield major changes in consensus-oriented Denmark. The "red bloc" is likely to focus more on integrating immigrants already in the country, than opening up the borders to more.

There is also broad agreement on the need for a robust welfare system financed by high taxes, though parties differ on the depth of cuts needed to keep public finances intact amid the uncertainty of the global economy.

Thorning-Schmidt's biggest challenge is finding room in her Cabinet for both Vestager and Villy Soevndahl of the Socialist People's Party, a working-class party that moved away from its Marxist roots following the collapse of the Iron Curtain two decades ago.

She's not likely to offer any Cabinet seats to the Red-Green Alliance, a conglomerate of communists and environmentalists, but can count on its support in Parliament.

Meanwhile, Danish People's Party leader Pia Kjaersgaard promised she wouldn't fade into the shadows while in opposition.

"Congratulations on the victory, you deserve that," Kjaersgaard told Thorning-Schmidt. "But I think you have tough times ahead."

[Associated Press; By KARL RITTER]

Follow Karl Ritter on Twitter at http://twitter.com/karl_ritter.

Associated Press writer Jan M. Olsen contributed to this report.

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