The past year's ultra-high prices for gas and electricity have reduced the competitiveness of Danish companies compared with rivals from neighboring countries, the Confederation of Danish Industry (DI) has said.
The association estimated that the country's industry has amassed DKK 19Bln ($2.8Bln) in additional costs for the consumption of electricity and gas. For the sake of comparison, a calculation by consultancy Ea Energianalyse has placed the Danish energy industry's additional profits at well over DKK 20Bln.
"It is a bill that is difficult to pick up when you are competing with foreign countries," DI deputy director Troels Ranis told Danish media.
According to DI, although high energy prices affected most of Europe, there has been a disparity in the countries' competitiveness. Ranis pointed out that several of Denmark's neighbors gave struggling companies a helping hand with exorbitant energy bills, giving as an example Germany that covered up to 70 percent of the extra expenses, although Sweden adopted similar initiatives. Denmark's failure to do likewise put it at a disadvantage, he claimed.
"We have lost competitiveness abroad. Asia and the US have not seen the energy prices that we have in Europe," Jorn Krogager, chief executive of MAT Dania - a foundry which deals in iron casting, machining and assembly - said, adding that his own business's total bill for electricity last year rose more than five times.
He called it "particularly frustrating" that profits over the last year have ended up "in the wrong place", labeling the energy industry's gains "unheard of".
"It's not money they've earned. In fact, it is the reverse Robin Hood, where the rich steal from the poor," Krogager said, calling on politicians to levy a heavy tax on the huge earnings the energy companies have made.
According to DI, the Danish government must provide compensation to companies in need, as was the case in Germany and Sweden, to get the economy back on track.
"Right now, a lot of money has been thrown into play in the countries around us, and this distorts the companies' competitiveness. Therefore, a targeted, Danish solution is needed, which is based on the needs to ensure that we have a level playing field," Ranis said. To eliminate the risks of a state-supported spiral, he stressed that the help must only be temporary, targeted and needs-driven.
In 2022, the Danish economy was hit by the double whammy of inflation at a rate unseen in decades and exorbitant energy prices – a crisis exacerbated by the EU's ill-advised sanctions against Russian energy intended to "punish" it for its special operation in Ukraine. This prompted Copenhagen to present a "tight and responsible" spending plan for 2023, which is meant to tackle inflation and, in the words of Finance Minister Nicolai Wammen "get Denmark through tough times".