The party is over. Greenland looking at huge deficit. More disappointment coming to the people of Greenland.
The Government of Greenland has initiated several initiatives, such as reviewing the Government of Greenland's expenses with a fine-tooth comb, after a budget follow-up estimates that the deficit in the national treasury will land around DKK 347 million.
Múte B.EgedePhoto: Oscar Scott Carl
The Ministry ofFinance has made a gloomy announcement to the Government of Greenland. According to the ministry, fewer revenues and higher expenses will worsen the national treasury's finances by DKK 225 million this year, and a larger deficit is therefore expected than originally anticipated.
The Minister of Finance, Múte B. Egede (IA), calls the situation challenging and assures that it is taken very seriously:
- It clearly shows that we need to do something completely different with the way our system is structured. The usual "caregiver mindset" is no longer possible, as our economy is vulnerable, he says and continues:
- We have known that the cost of pensions would increase, and now it is coming at the same time as we lack dividends from the companies, and there is an increase in spending in the health service. This shows that we need to have a more robust economy to future-proof our welfare.
Several things set in motion - rejects crisis
According to Múte B. Egede, the Government of Greenland has initiated several initiatives to save money without affecting core welfare:
"I would say that we are combing through the expenses right now to ensure core welfare, but it is more superficial," he says, and at the same time emphasizes the need for reforms:
- Reform processes are strictly necessary to make the public system more up-to-date and to ensure a more simplified system. Bureaucracy must be reduced, while services to the population must remain at the level of a welfare society.
Question: Could Greenland be heading into a major financial crisis?
- If we do not act now, the forecasts have always said that the expenses will exceed the income. That situation is knocking on the door now, so it is time to act and time to agree on things instead of pointing fingers at each other.
"If we don't act now, we risk a crisis in the end. But I would say that it is still in our own hands in terms of changing the negative direction.
There is still money in the coffers
Question: Have you been too optimistic in the previous coalition?
- I don't want to point fingers back and forth. I would say that we have shown that there are some challenges that will come in the economy, and we have known that for 10 to 15 years.
"Things have been acted upon, but the situation shows once again that we need to make some coherent reforms to really ensure that the economy can be robust," says Múte B. Egede.
With regard to reforms, he refers, among other things, to the Government of Greenland's Sustainability and Growth Plan and that education and growth in the business community are among the main keys to balancing the national treasury's revenues and expenses.
Question: There is still liquidity in the national treasury, but is it possible that you will have to go out and borrow money for operations if this continues?
- Well, we have liquidity now, so it is in our hands, and if we act now, it will not be necessary, says Múte B. Egede.
According to the Ministry of Finance's budget statement from March, the Government of Greenland's cash balance has fluctuated between DKK 382 million and DKK 1,208 million in the previous 12 months. This is a slightly lower level than the previous year, when it was between DKK 885 million and DKK 1,285 million.
