COPENHAGEN (BLOOMBERG) - Denmark's Social Democrats won Wednesday's (June 5) election, resulting in a changed political landscape that will bring with it a new left-leaning government led by a 41-year-old woman.
Voters handed the anti-immigrant nationalists their worst drubbing ever in an election, and the result puts Social Democrat leader Mette Frederiksen in line to be Denmark's youngest prime minister and only the second woman to lead the country's government.
The result suggests that voters have had enough of the ultra-hard line of the Danish People's Party on which the centre-right coalition has relied for support.
Even Prime Minister Lars Lokke Rasmussen signalled that he found some of Denmark's immigration laws too draconian after recently revealing that the Harvard-educated American fiancee of his 29-year-old son was unable to stay in the country.
The centre-left opposition bloc gained 91 seats versus 75 for the centre-right government bloc.
Denmark is a nation with a population similar to Singapore - about 5.6 million.
Ms Frederiksen, whose Social Democrats led with 26 per cent of the vote, now faces protracted coalition talks. The result is the latest example of centre-left parties regaining political dominance in the Nordic region, with both Sweden and Finland leading the way in earlier elections.
"This was an election that was about welfare and after tonight we'll again put welfare first," Ms Frederiksen said in a speech after the outcome was clear. "This was an historically big win."
Ms Frederiksen stands out in Social Democratic history for having agreed to somewhat tougher rules on foreign labour, though without stigmatising Muslims in the same way the country's nationalists have done.
The move appears to have undermined the supremacy of the anti-immigration Danish People's Party, whose disastrous result means that Mr Rasmussen lost the parliamentary support he needed to stay in office.
Mr Rasmussen conceded defeat shortly before midnight and said he will hand in his resignation to Denmark's queen on Thursday. Ms Frederiksen "should have the chance to form a new government," he said.
Everything now points toward "a regime shift in Danish politics," said Mr Helge Pedersen, chief economist at Nordea Bank in Copenhagen.
The Danish People's Party, which was formed in 1995, was by far the biggest loser in Wednesday's vote as its support was more than halved.
It was backed by more than a fifth of the electorate in 2015, giving it the political clout to push through a hardline agenda targeting immigration. That was the same year Europeans wondered how their continent would absorb hundreds of thousands of asylum seekers as the war in Syria took its toll.
But now, Danes are less worried about a mass influx of asylum seekers. They're also more concerned about issues that the Danish People's Party has failed to embrace, such as the environment. Its founder, Ms Pia Kjaersgaard, drew ridicule recently after blaming "climate loonies" for her party's changed fate.
Mr Kristian Thulesen Dahl, the current head of the Danish People's Party, described the election result as a "thrashing." He blamed the emergence of a number of new right-wing parties for the result, arguing they lured voters away.
One of those parties, Hard Line (Stram Kurs) led by convicted racist Rasmus Paludan, just missed the 2 per cent threshold needed to get into the parliament. Another, the New Right, was set to make it into the legislature by a slim margin.
Though immigration was less of vote winner in the 2019 election than in previous years, it continues to be an important issue for Danes. That's particularly true for blue-collar workers worried about competition from migrants.
"For me, it is becoming increasingly clear that the price of unregulated globalisation, mass immigration and the free movement of labour is paid for by the lower classes," Ms Frederiksen said in a recent biography.
DIFFICULT TALKS AHEAD
Ms Frederiksen's approach on immigration has led to frictions within the group of left-leaning parties that have traditionally backed the Social Democrats. That means she faces a tougher set of government talks than usually would follow a Danish election.
She's made clear she wants to rule an administration comprised only of the Social Democrats, with the parliamentary backing of her political allies on the left. But those parties have indicated they'll be making their own demands, including a more humane approach toward immigrants.
"It will be difficult to form a coalition government, or a government at all," said Professor Bent Greve from Roskilde University, "because there are disagreements within what we call the Red Bloc parties" that make up the opposition, he said.
The 55-year-old Rasmussen has said he's ready to break away from his coalition partners and the Danish People's Party. That could include forming a government with the Social Democrats. But Ms Frederiksen has so far dismissed such an alliance suggesting that she will stick with her traditional allies on the left.
Mr Pedersen at Nordea said, "It's still a very open game and I don't think we'll see a Danish government formed any time soon. It will probably take some time."
Ms Frederiksen has also campaigned on promises to fight corporate greed and to impose tougher rules on the financial sector. That follows voter anger over a number of scandals involving bankers, the most infamous of which is the US$230 billion (S$314 billion) money-laundering affair that has engulfed Danske Bank. A separate saga in which a number of financiers stole as much as US$2 billion from state coffers by abusing dividend tax-rebate rules also paved the way for tougher rules for bankers.
Danes also made clear they want a government that prioritises policies to tackle climate change. In a recent poll, climate ranked at the top of voter concerns, healthcare was second while immigration was third.
"There will be more focus on welfare and on the climate, no doubt about that," Mr Pedersen said.