The government is spending billions on defense and lower taxes—but the pot is soon empty.

The government may, according to Lars Løkke Rasmussen, be facing a shortage of funds after its billion-krone 2035 plan.

The long-awaited economic plan was presented by the government today. (Photo: © Ida Marie Odgaard, Ritzau Scanpix)

There won’t be much money left in the state treasury in a few years, according to the government’s economic 2035 plan.

At least not if the government’s planned and extensive investments in areas such as defense and VAT reductions are carried out.

The plan, which is presented Tuesday in the Ministry of Finance, shows that there will be 36 billion kroner in free funds by 2030. The rest of the otherwise rapidly growing surplus will be spent down to the last penny with the government’s initiatives.

“We must also be honest in saying that when we’ve done that, there won’t be room for all possible and impossible things,” says Finance Minister Nicolai Wammen (S).

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**Billions for defense**

Defense is the biggest expense in the economic plan.

With the allocation of 3.8 billion kroner to the Ukraine fund this year, Denmark will meet NATO’s goal of spending 3.5 percent of its gross national product on pure defense costs this year.

The government does not plan to do so in the years 2027-2029, but will again reach the 3.5 percent mark from 2030 onwards.

Billions of kroner will also be allocated to an unspecified reduction in VAT.

“When we’ve done that, we’ll also be at the point where it starts to look like an empty pot. There’s a little left. We can see the bottom,” says Moderates leader and Foreign Minister Lars Løkke Rasmussen.

Economy Minister Stephanie Lose (V) argues that the Danish economy is strong due to record-high employment.

Lose wants more economic reforms and measures to boost competitiveness.

“But it’s important to say that the money tree doesn’t grow into the sky, and the work doesn’t just fall from the sky,” she says.

The Social Democrats, Venstre, and Moderates have been in government together since 2022. The latest parliamentary election must be held by the end of October this year.

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