COPENHAGEN, Denmark (AP) — Denmark's new left-leaning government said Thursday it is planning an 11 billion kroner ($2 billion) economic stimulus package that will bring the country's total deficit for next year to 95 billion kroner ($17.5 billion).
The minority, three-party coalition says in its draft budget that it aims to speed up planned public works projects, which would create 9,000 more jobs in 2012, and raise taxes on cigarettes, soft drinks and sweets.
It also aims to spend 1 billion kroner ($185 million) more on education.
"We stand in a tough economic situation, but the Danish economy is not on the edge of a precipice," Social Democratic Finance Minister Bjarne Corydon said.
Prime Minister Helle Thorning-Schmidt — the country's first female leader — has warned that sacrifices would have to be made if the government's aims were to succeed in boosting growth.
There is a broad agreement to maintain the Scandinavian country's strong welfare system financed by high taxes, but parties also acknowledge that cuts must be made in the face of the uncertain global economy.
The new government has revoked a controversial plan to reinstate customs checks at Denmark's borders with Germany and Sweden, saying it wants more customs officers, but scattered across the country rather than at fixed border posts.
The unlikely government alliance, which includes former communists and pro-market liberals, took office after a center-right government lost the Sept. 15 elections. It relies on support from the Red-Green Alliance, a leftist party outside the coalition made up of Social Democrats, the center Social Liberals and the Socialist People's Party.
The 2012 budget proposals are subject to approval by lawmakers. A vote is expected in Parliament before the year-end.
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