Poland's Prime Minister Donald Tusk (R) talks with Denmark's Prime Minister Helle Thorning-Schmidt at the start of a European Union summit in Brussels August 30, 2014.
Denmark's prime minister has nominated her economy minister, Margrethe Vestager, for a post in the European Commission, leading to a small cabinet reshuffle in which the economy portfolio is expected to be filled by the current tax minister, Morten Ostergaard.
Prime Minister Helle Thorning-Schmidt told Danish television TV2 News of the move in the early hours of Sunday after failing to be appointed herself as the new president of the European Council. That post went to Polish Prime Minister Donald Tusk.
The reshuffle in the economic posts comes as Denmark struggles with a slowdown a year before an election.
Vestager leads the Social Liberal Party, a coalition partner to Thorning-Schmidt's Social Democrats. It is not yet clear what post she will get in the commission.
The party selected Ostergaard to be its new leader at a meeting on Sunday and he told Danish media that he would replace Vestager as the economy minister.
While a junior partner in the coalition, the Social Liberal Party has been the driving force behind reforms taken by the government including cutting unemployment benefits to weather the lingering financial crisis and economic malaise.
Ostergaard, who is expected to be formally named the new economy minister on Monday or Tuesday, said he would not veer from the party's line, according to news websites. The Social Democrats will then fill his former post of tax minister.
Denmark's economy unexpectedly slipped into negative growth in the second quarter, throwing into question the government's economic forecasts and ability to meet EU budget requirements.
The coalition partners may face a tough choice of either breaking the EU's 3 percent of gross domestic product budget deficit limit or cutting spending further due to weak growth during an election year.
Polls show the parties that tend to ally themselves with the Social Democrats trailing by almost 10 percent to those that group around the opposition Liberal Party.
The summit in Brussels named Tusk, a Kremlin critic from ex-communist Eastern Europe, to one of the top posts in the 28-member bloc just as it is trying to defuse a conflict in Ukraine and a standoff with Russia. Thorning-Schmidt had been a front runner for that position.
Origin:
http://uk.reuters.com/article/2014/08/31/uk-denmark-economy-...
