6 March, 2018
Statement by the European Fiscal Board
on the relocation of the Danish Economic Council away from the Copenhagen area.
Over the past several years the Danish government has been implementing a programme
aimed at relocating government offices away from Copenhagen. The objective of the
programme is to promote a more decentralised distribution of economic activity across
the country. The most recent step involves several thousand government jobs and also
affects the Danish Economic Council which is formally part of the Economics Ministry.
The decision to relocate the Economic Council to Horsens, a town in Western Denmark,
has triggered reactions and concerns first by the representatives of the Council itself and
subsequently by the
Network of EU Independent Fiscal Institutions.
The relocation is
considered to seriously affect the Council's capacity to meet its mandate as an
independent assessor of Danish budgetary policies.
Denmark is a signatory of the so-called
Fiscal Compact,
an intergovernmental agreement
which requires participating member states to comply with fiscal rules aimed at ensuring
sound and sustainable public finances. As part of this agreement, a high degree of
functional autonomy is crucial for the independent bodies monitoring compliance. Before
the relocation of the Danish Economic Council was decided, Denmark was assessed to be
compliant with the provisions of the Fiscal Compact.
While the government's decentralisation programme is much wider in scope and its most
recent phase does not specifically target the Economic Council, the relocation is likely to
produce unintended and important consequences for the independent monitoring of fiscal
policy in Denmark. This is regrettable as evidence shows that effective independent
scrutiny improves the fiscal performance of a country.
The role of the Danish Economic Council as an effective assessor crucially depends on
its ability to recruit high quality specialised staff. This ability is affected by the
relocation. We understand that very few of the currently close to 40 staff members of the
Council will effectively relocate to Horsens. As a result, the Council will face very
important challenges in the short term and may not be able to attract qualified staff to
ensure effectiveness in the medium to longer term. The distance to decision makers and
key stakeholders in Copenhagen adds to the predicament by greatly complicating
interactions.
Overall, the European Fiscal Board shares the concerns expressed by the Danish
Economic Council and the Network of EU Independent Fiscal Institutions. It calls on the
Danish government to explore options to keep the Danish Economic Council in the
Copenhagen area.
The European Fiscal Board
https://ec.europa.eu/european-fiscal-board
European Fiscal Board