Monday May 29, 2017

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Greenland’s government headed in new direction

A more liberal spending philosophy is on tap as Greenland’s new leaders look to spend their way out of recession

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For the first time in five years, a Greenlandic government has presented the country a budget containing red ink.

By presenting a 6.5 billion kroner 2014 budget that runs a 76 million kroner deficit, the social-democratic leader Aleqa Hammond hopes to spend Greenland back to prosperity by building port facilities, colleges and investing in education.

The finance minister, Vittus Qujaukitsoq, said the country was strong enough to withstand a little red ink.

"This is a conscious choice to pursue an employment policy," he told Denmark’s Politiken newspaper.

Opposition disagrees
The move has been met with intense criticism from the country’s main opposition party, IA.

While serving as premier of the self-governing Danish territory from 2009 until 2013, IA leader Kuupik Kleist practised tight-fisted, budget-balancing fiscal policies.

IA leaders said the fishing industry, the backbone of Greenland’s economy, is ailing and that the country’s much ballyhooed future as an oil and mineral Klondike remains cloudy at best.

"They have fallen in love with their own campaign rhetoric instead of making efforts to improve the economy,” finance committee member Naaja Nathanielsen told Politiken. “We need to find one billion kroner each year until 2030 to fund our welfare system and there is no guarantee that those funds will come from mining or oil.”

A little red ink won’t hurt
But even though he said the new government will pursue “less rigid” fiscal policies than the previous one, Qujaukitsoq agreed Greenland needed to find new revenue sources.

The government has pinned much of its financial hopes on a major iron mine near the capital city of Nuuk, but Qujaukitsoq stressed that the venture remained uncertain because the funding is not in place.