Denmark's Budget Gap May Flirt with EU Limit if Oil Stays at $50
Denmark's government estimates its budget would lose 7.5 billion Danish crowns ($1.1 billion) if oil prices remained around $50 a barrel, according to a document submitted by the finance minister to a parliamentary committee.
That figure, which takes into account the positive financial impact from lower oil prices, represents 0.4 percent of gross domestic product (GDP) and would push the budget deficit to 2.9 percent, close to the European Union's 3.0 percent cap.
In the document, the ministry outlines oil price scenarios. Crude at $60 for the whole year would bring losses of 5.7 billion crowns and at $70, 3.7 billion crowns.
Denmark produces oil and gas from the North Sea but its 245,000-barrel per day (bpd) production is dwarfed by Norway's 1.5 million bpd.
When it submitted its 2015 budget in December, the ministry foresaw a budget deficit of 49.7 billion crowns, or 2.5 percent, at an average oil price of $88 per barrel.
Brent crude oil prices dipped below $50 a barrel in January after a steady fall from over $110 in June 2014.
Denmark only exited the EU's excessive budget deficit procedure last year. It has had only one year during which the gap exceeded the EU's cap.
Reporting by Erik Matzen