Stop the hysteria over family allowance payments
Summary Published in Berlingske on 10 March 2014
The debate on family allowance payments, in which the EU has been made a scapegoat, has been blown way out of proportion. Something which, economically speaking, is still only a marginal issue, has been stirred up as if we are in the middle of a national crisis in which our welfare system is under threat. It appears that several right wing politicians have lost their European compass and stumbled into excessive populism. The Conservative People’s Party (De Konservative) is fighting desperately to break away from the electoral threshold and outbid Danish People’s Party (Dansk Folkeparti) in this respect. Even some of the Social Democrats are nervous and lack the mettle to brave the storm. The leader of the Liberal Party (Venstre), Lars Løkke Rasmussen, let himself get carried away by the sentiment, but now seems to have realised that the issue is about more than just family allowance.
Danes’ concerns about protecting their welfare model should of course be taken seriously. It is, after all, what the majority still wants. But there is no need to lie down, shoot ourselves in the foot or turn the EU into a scapegoat.
Everyone who cries wolf because the State is spending a few extra million kroner on family allowance payments should understand exactly what is at play: Our exports account for more than 60 percent of our economic output each year and a large proportion of this amount comes from exports to the internal market. Allocating a few million kroner in family allowance to non-Danish EU citizens who have worked and paid tax in Denmark is a cheap investment, as every year we export 700 billion DKK to EU countries and over half a million Danish jobs rely on these exports. The internal market has made Denmark a wealthier nation, and if our prosperity and welfare is to be maintained, we should be fully engaged in the internal market.
Nevertheless, the Danes are panicking anyway about the 50,000 people from Eastern European countries who are living in Denmark, because a few of these residents are sending their family allowance to their family members back home. They have come here to work, only 5.7 percent of them are unemployed, they pay their taxes and they receive no more social security benefits than the Danes. It is not an economic matter, but a political one. The Government is right that EU law is crystal clear on the subject, stating that we must not discriminate against EU citizens who are working in our country. Even the Liberal-Conservative Government was warned about breaking this law while it was in power.
The debate has many layers, but reasonable arguments are being drowned out by cheap, populist scaremongering. Individual anecdotal cases of abuse are being overinflated and roughly generalised, while migrants from EU countries are being branded as second-class citizens or “threats”. It is important that Danish collective agreements are respected and a state based on justice should not tolerate breaches of the law. Rather, it should stamp them out. It should be easy to do this, because the majority of migrant EU citizens from both the East and West are law abiding, hardworking and tax paying citizens.
In fact, the financial bottom line indicates that non-Danish EU citizens are a profitable business for Denmark. In contrast, estimations have shown that, on the whole, Danes are an unprofitable business because we spend a significant amount on child care centres, schools, education, maternity leave, other types of leave, unemployment benefits, pensions, hospitals, etc. It is unreasonable to make migrant EU citizens the scapegoats in the debate on the future of the Danish welfare system.
The Danish welfare system is not in danger of being dismantled. Welfare in Denmark reached historic highs in the same period in which the internal market was expanded. The internal market and welfare can complement each other in a Danish context. They are prerequisites for each other rather than opponents. When will the hysterical EU critics understand that our welfare is dependent on our exports to the EU’s internal market?
Yet they are moaning that the EU and its internal market are threatening family allowance, social rights, the labour market model, collective agreements and the health system. And Weekendavisen’s Anna Libak said on the television programme Debatten that we could even risk having 40 million welfare tourist visiting from Ukraine, and that our welfare model is doomed. This is a wild and completely absurd hypothesis. The reality is that relatively few Europeans have migrated to Denmark despite recurrent panic forecasts. This is because, among other reasons, that it is expensive and a huge hassle to move to a new country, settle into a new culture and a permanent job in a new labour market.
The current debate on the EU and welfare needs to come back down to earth. The EU only requires that we do not discriminate between EU citizens, regardless of their origin. And we should all be grateful for that. Over 80,000 Danes are working in other EU countries; Danish pensioners can buy holiday apartments in Spain’s Costa del Sol; Danish youth can study in other EU countries and get their qualifications recognised by other EU countries. And Danes in Sweden can receive family allowances. Do we want to lose these rights? Certainly not. Therefore, we have a responsibility to treat other EU countries’ citizens the same way we expect to be treated in their countries.
Instead of making the EU the scapegoat we should reform ourselves into a solution. Family allowance – i.e. support for families with children – can be reinvented. Consider, for instance, lowering daycare fees, or giving tax reductions to families with children. If the scheme has to demonstrate solidarity, a cap on payment amounts could be introduced. And families with free access to daycare or low income could get some form of compensation so that all families with children in Denmark can benefit from it.
Politicians at the Danish Parliament, Christiansborg, should pull themselves together and create a reform that respects the EU’s fundamental rights. But we have ended up in a tragic conflict between the Government’s perseverance in keeping the family allowance scheme as it was, and the conservative parties’ dangerous gambling whereby the EU is condemned as a scapegoat for something that is no more than a Danish sin of omission. Welfare in Denmark can be reformed whilst protecting all of the benefits we gain from being members of the EU. When will the conservative parties wake up again and stop pandering to the EU critics’ demagoguery and the abstract intellectuals’ dystopian scaremongering? It is high time.