If Prime Minister Anker Jorgensen has his way, a middle-class worker who loses his job in Denmark may no longer receive, besides his basic unemployment benefit of about $15,000 a year, additional government money to help keep up the payments on his vacation home and otherwise maintain his high standard of living.
Danish families earning more than $20,000 a year may no longer be eligible for government allowances to help with the cost of caring for children. Government subsidies to provide spending money for 16-and 17-year-olds who stay at school may be postponed. When deaths occur in families above middle-income levels, the government may no longer help pay for the burial costs.
These and other "more elaborate trimmings of the social welfare system," in the words of one Danish official, are threatened by sizable government spending cuts recently proposed by Jorgensen's left-of-center Social Democratic government to try to reduce Denmark's dangerously large government deficit and avert a financial crisis.
The proposed spending cuts, which could affect everything in Denmark's literally cradle-to-grave welfare state from day care and dental services to job retraining and old-age pensions, are part of a controversial economic policy package now being debated by the 10-party Danish parliament. Because the Social Democrats hold only 69 of the 179 seats in parliament, the fate of Jorgensen's minority government depends on the outcome.
While the economies government finances of Norway and Sweden are in much better shape than Denmark's, there also is growing concern in those nations and their governments about the mounting costs of their extensive welfare states. They, too, have been bloated by rising inflation, the growing health and social service needs of aging populations and unending demands from almost every segment of society for more government benefits and subsidies.
Their current budget deficits range from 5 percent of the country's gross national product in Denmark to 10 percent in Sweden, which compare to budget deficits of less than 2 percent of GNP in the United States and 5 percent in Britain. The largest single increase in the Swedish government spending this year is the 50 percent jump in the cost of repaying the money it must borrow to cover its budget deficit.
The same economic problems that are making it more difficult to pay for the Swedish welfare state have had more potentially long-term repercussions. Last week, Swedish workers began a nationwide strike, a reflection of the inability of employers, including the government itself, to give their already well-paid workers the big raises that were routine until the mid-1970s.
In Denmark, after years of building a welfare state that is possibly the most generous in Scandinavia, even the Social Democrats realize they must now start trimming it back to avoid the financial collapse of one of the world's richest nations.
"This is a big change for us," the Social Democrats' economic minister, Ivar Norgaard, said in a recent interview here. "During the 1960s and 1970s we expanded the public sector so much, which we were happy to do, and now we have to reduce it.
"It will take time to adjust our party to this new attitude," Norgaard said. "But we have become less rich and private spending is already down. So public spending can't continue going up. People won't accept that."
Unlike the Conservative government of Prime Minister Margaret Thatcher in Britain, Scandinavian political leaders remain committed to the welfare state. They have simply found it increasingly difficult to satisfy its insatiable appetite for money.
The choices they now face are much the same as those now facing Americans and the Carter administration in trying to curb government spending to reduce taxes and fight inflation without harming social welfare programs.
The income of the average Danish family, which has ranked among the top five in the world, is expected to fall as much as 5 percent behind inflation, predicted to rise by 12 percent in Denmark this year. This high rate of inflation for Scandinavia is being exacerbated, in the view of economists and bankers, by the Danish government's big budget deficits and the high interest rates it now must pay on foreign loans to cover them.
Denmark's foreign debt, much of it owed to banks in West Germany and Switzerland, has swollen to nearly a fourth of the gross national product. Both former Social Democratic finance minister Knud Heinesen and Danish central bank governor Eric Hoffmeyer have warned that, is something is not done soon, Denmark's credit could be ruined and the International Monetary Fund will have to be called in to provide financial assistance and impose a harsh austerity plan on Denmark.
Denmark's basic problem, explained Svend Anderson, director of the Danish central bank, is rooted in the extraordinary expansion of its welfare state during the 1960s and early 1970s when Danish prosperity was unparalleled. Beginning in the mid-1970s, Denmark's economy, based on international trade, slowed down while inflation, fueled by the country's expensive bill for imported energy, drove up the cost of the welfare state. Government revenue fell far behind public spending, and a succession of weak governments unable to command a majority in Denmark's multiparty parliament were unable to take necessary drastic action.
No one is now proposing to dismantle any welfare state programs, Anderson and several government officials said. Instead, Jorgensen's government wants to curtail their cost, mostly by limiting eligibility for many programs to families below certain middle-income levels.
Reversing the direction of such generous welfare state spending in Denmark, even without altering any basic social welfare programs, "will be like changing course for a supertanker," said central banker Anderson. "It will take time.
"But our message is that we must start now -- not without trimming, but without real hardship," he added. "If we wait a few more years, it could mean real hardship. It's not panic measures that are needed, but a steady change in course over many years."
Both the Norwegian and Swedish governments are now trying to cut their huge subsidies to ailing traditional industries like shipbuilding. Compared to Britain, there is very little government ownership of business in Scandinavia, but subsidies to industry to protect threatened jobs have become a significant and expensive feature of the Scandinavian welfare state.
Norway borrowed against its anticipated North Sea oil wealth to subsidize heavily its declining manufacturing industries, runnng up a foreign debt equal to more than 40 percent of Norway's gross national product and swelling total government spending to nearly 60 percent of GNP.
Norway's North Sea oil revenues will soon be large enough to erase any worries of a financial crisis such as the one facing Denmark, but political leaders on both the left and right in Oslo now have doubts about wasting too much oil money on dying industries and unnecessary government spending rather than allowing more of it to flow into the private sector and become the seed money for new businesses.
After first paying off Norway's foreign debt, Kaare Willoch, parliamentary leader of the opposition Conservative Party, said in Oslo that he would look for ways to channel money into the private sector, where it could become the seed money for new businesses and technology.Willoch's party, which wants to hold down welfare state spending generally without dismantling any welfare state social programs, made such big gains in Norway's local elections last year that Willoch would become prime minister if next year's parliamentary election produced a similar result.
Now, the governing Labor Party, which oversaw the growth of Norway's welfare state, also is looking for ways to hold down government spending and taxes, at least until the arrival of the peak years of North Sea oil revenue, while maintaining welfare state social services and modest subsidies to industries ranging from fishing to newspaper publishing.
"We now know we should not have put so much money borrowed against our oil revenues into keeping inefficient industries alive," Gro Brundtland, vice chairman of the Labor Party and an inflential member of the Norwegian parliament's finance committee, said in an interview in Oslo.
As the magnitude of Norway's North Sea oil wealth became clear in the late 1970s, she said, "the psychological atmosphere was such that every time a factory got into trouble, its owners and workers said, 'everyone else is getting money, why not us?' No industry could die, no job could be lost."
In Sweden, too, pressure is growing to slow the growth of government spending and reduce a sizable budget deficit. But the right-of-center coalition government, which holds a shaky single-vote majority in parliament, does not now dare risk touching welfare state social programs.
Former prime minister Olof Palme, leader of the opposition Social Democrats, who created and expanded the Swedish welfare state during 44 continuous years in power, still speaks of extending rather than limiting it. Even after the Social Democrats were voted out of office in 1976, varying right-of-center coalitions of what the Swedes call "bourgeois" parties have until now continued to increase social welfare spending. They significantly improved pensions, protected jobs in the shipbuilding industry with huge government subsidies and expanded a program that allows a Swedish mother or father to stay home to care for a newborn baby for up to nine months while still receiving 90 percent of her or his full pay.
The government already has had its hands full with a week-old national labor stoppage -- the worst since Sweden's general strike of 1909 -- in which a million workers are on strike or locked out of their jobs and another million are refusing to work overtime. It has shut down most industry, grounded all planes, cut all sea links to Sweden but a single train ferry from Denmark, blacked out television, shut stores and restaurants and affected local transportation, schools, hospitals, mail and telephones.
Friday, the Transport Workers Union joined the protest by ordering a ban on all gasoline and oil deliveries except to a small state-owned cooperative where the handicapped, police and fire brigades will receive supplies. The move virtually shut down the country and left several regions without heating and hot water.
The labor unhappiness that caused the strike has led to a breakdown of the Swedes' national wage bargaining system, which had been a model of labor-management cooperation.
At the same time, Swedish Budget Minister Ingemar Mundebo has warned that unpopular, across-the-board budget cuts that would affect welfare state social services for the first time, may be necessary to reduce government budget deficits. Outside observers doubt that he will be politically able to do this because of the coalition government's shaky control of parliament, already threatened by the nationwide strikes.
The leading advocate in Swedish politics for placing an outer limit on the growth of welfare state spending, while "honoring all present commitments" for social services in Gosta Bohman, leader of the Conservatives. He built his party into the largest in the right-of-center coalition by questioning Sweden's ability to afford the already soaring cost of pensions and other welfare state cash benefits and aruing that spending must be controlled to make possible some relief of the Swedes' heavy income tax burden.