After seeing what the United States and other countries have been going through Denmark will offer loans to banks and mortgage lenders worth around 17.8 billion dollars. It is the largest bailout ever given by lawmakers and is being used so the residents of Denmark will not see a protracted recession. 75 billion kroner will be allocated to the banks and the rest will go to the mortgage lenders. The interest rate according to the government will be based on the financial strength of each business.
Many people have said without this type of bailout the economy would have contracted at least 2.9 percent as businesses curtail investments and consumers tighten their spending to an almost standstill. The Danish government is trying to head this problem off before it becomes a much larger issue and than it could get out of hand like it has in other countries. By starting to work on it now they should be able to rein it in without further problems. Last year 13 banks were either bailed out or bought up by other banks and it is estimated that Denmark will lose a quarter of their 140 banks in the next two years.
Right now the Danish economy is in the middle of a two-year recession the longest decline in more than two decades and people and businesses are hurting. This bailout package is a way that the Danish government hopes will give the economy the boost it badly needs right now.
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