by Aayush Priyank
Mises.org
The ongoing coronavirus pandemic has halted economies across the globe. With various countries on lockdown and companies unable to continue production, an economic downturn is inevitable. In light of this, the government of Denmark has come up with a strategy to avoid recession—paying 75 percent of private employees’ salaries.
As long as companies do not fire people, the government is offering to pay 75 percent of their employees’ salaries, up to $3,288 per month per employee. To be eligible for this support, a company has to give notice that it will have to lay off 30 percent of its workers or fire at least fifty people. Beyond this, the government is guaranteeing bank loans to companies and compensating them for fixed expenses. The total cost of this undertaking is DKK 287 billion ($41 billion)—approximately 13 percent of the country’s GDP.