Every decade we need to bailout businesses so capitalism can keep functioning. In the last bailout, caused by American bankers, western countries gave banks corporate welfare cheques that went from the banks to the elite shareholders through dividends. This clearly didn’t work out well for 90% of people as the last decade saw a massive increase in inequality, tax cuts for the rich, and no behavioural correction from an unethical corporate elite. Thankfully, some countries have learned from that corporate welfare mistake and this time around when they give companies tax payer money they’ll put limits on what can be done. Denmark will only be giving corporate welfare to companies registered in Denmark (and thus paying Danish taxes) and ban them from paying dividends to shareholders until the money is paid back to the government.
Hopefully every nation follows Denmark’s example.
The government also said that companies which pay out dividends, buy back own shares or are registered in tax havens won’t be eligible for any of the aid programs, which now amount to a total of 400 billion kroner, when including loans and guarantees.
Finance Minister Nicolai Wammen said in an interview with broadcaster TV2, that Denmark, which is rated AAA, plans to finance new measures partially by issuing government bonds.
“We have a stronger position than many other countries and we are able to borrow money to get through this situation in the best way possible,” Wammen said.