Denmark's war Taxes, Declining Interest Rates, Improved Psychiatric Support: LWID S3E2

Say hello to Fionn, one of our new resident Irish co-hosts. This week, Fionn and Kalpita are joining forces to discuss both good news - interest rates continue to lower for aspiring homeowners and expansion of psychiatric support on the emergency hotline 112, and not so good news (i.e. increasing Denmark’s NATO contributions to 5%). 

Topics:

1. 112 hotline will support psychiatric emergencies from 2026 (01:02) 
2. Interest rates expected to fall as low as 1.1% by summer (10:50)
3. 90B DKK needed increase NATO contributions to 5% (15:53)
4. The "shift towards a wartime mindset" (24:39)

In this episode:

Cohosts: 

• Kalpita - https://www.linkedin.com/in/kalpitabhosale/
• Fionn - https://www.linkedin.com/in/fionn-o-toole/

Our team:

• Leo - https://www.linkedin.com/in/leo-vitasovic/
• Transcript Editor: Jessica, https://www.linkedin.com/in/jessica-c-l-ekholm/

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Transcript

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Kalpita: Hi everyone! We are at the second episode of Last Week in Denmark and you are with Kalpita, that's me. And I have Fionn with me for the very first time. How are you, Fionn?

Fionn: I'm good. Thank you so much. Happy to be here.

Kalpita: I'm so glad we're doing this. I remember we did this during the trial session and it went so smoothly. I'm so, so excited we're talking again.

Fionn: Well, now you've put the expectations high, so I know any second now I'm going to mess it up [laughs].

Kalpita: It only gets better, I'm telling you. Well, today we are talking about one very important topic and lots of speculation around it. And there are two other topics. One is probably like a repeat from last time, maybe, and one is an exciting development, actually. Let's start with the psychiatric emergencies. The government is investing 113 billion kroner in developing a psychiatric emergency line, which will be 112 and you can actually call it as soon as next year to report any psychiatric emergencies. I think it's a great thing. What do you think?

Fionn: Yeah, I think absolutely it's something that's really needed to a large degree, or maybe- Let me rephrase that. I think what's needed has been this clarity, you know, I think it's no surprise to anyone that if you've read the news over the last few years, there's increased talks of there being a mental health crisis in Denmark and kind of across the world. And for a large part of that, I think that is maybe chronic things or things that people have to deal with every day. But of course, small things can get bigger and come to a head. And when people are having a psychiatric crisis or in a very, very bad place that requires emergency services or treatment, they need to be able to get that at the right place. And I think that's what this is really aimed at addressing. When this news was kind of reported, I was looking at a report from the Danish Health Authority, or the Sundhedsstyrelsen, if I'm not messing that up too badly. And they actually put forth this proposal back in December of last year, which the government is adopting. And it really wanted to explore two things. One was strengthening telephone access to emergency psychiatric care, and the other was strengthening acute treatment efforts in the regions, which of course is where the health services are managed by the regions. 

Kalpita: Mhm.

Fionn: And what I found was both very interesting, but also kind of scary, was they found that there was real challenges that people are having when accessing particularly emergency psychiatric care by phone. Very many people didn't understand or were having trouble navigating between the various public emergency lines to actually get the right help. And there are kind of multiple options at the moment. So you have what's essentially like the acute medical coordination, which is what handles emergency 112 calls already, but you also have psychiatric emergency departments where they maybe can take calls, but they don't always. Or not all of these services have the ability to actually refer people to regional psychiatric treatments or, you know, actually get them the emergency help that they need. Those two call services today, I think they were handling around more than 300,000 psychiatric calls last year. So that's already an enormous number. 

Kalpita: Yeah.

Fionn: But there's a lot of civil organizations and municipalities that offer, you know, phone counseling services to citizens who are in acute mental health crises or dealing with psychiatric problems. And they also handle around 300, actually a little bit more than 300,000 calls annually as well. And there they don't have the services to actually refer people to treatment centers. And very often the counselors don't have psychiatric qualifications, so they are more counsellors. And so I think the key kind of recommendations, or the top recommendation that I took from reading through that report was really strengthening the telephone access. So having a very, very clear emergency psychiatric help for citizens, so they know where to go, and they're not trying to rely on different ones that maybe can give, you know, a listening ear, which is also important. But in acute cases, in emergency cases, can't actually refer people where they need to be. And integrating that to 112, which is, you know, the general emergency services, so it becomes very clear, you know, you shouldn't have to have any doubt if you or somebody you love, right, is going through an emergency, whether they're at risk of suicide or hurting themselves or somebody else. The number is kind of the same as any other emergency. And I think that clarity is very welcome.

Kalpita: Yeah, I'm reading the press release here and it says it's 113.3 million in 2025 and 150 million in 2026 towards this emergency hotline. And it includes strengthening existing or new treatment options that can be referred to, which also is- It's a bit hopeful, I think, because you are getting not only help, but you're getting experts on the line, which is very, very helpful. I remember we had to use this emergency number. Funny thing around my wedding, when I got married, and I had this rash, and I've never had a rash in my life. I'm not allergic to anything. And they were really, really helpful and we had immediately about four to five doctors assessing my situation, giving me exactly what was wrong, what was the analysis, what my husband needed to do, and everything went fine. And to have that especially for people with mental health and given the times where we are in and having declared emergency situation already since last year, I think it's the whole, the strain on the people and then to have such a helpline is going to be so much valuable as well. And I think from an international citizen perspective as well. I've heard many friends and colleagues that they have had trouble with getting the right help, especially when it comes to mental health. And if they come from any previous condition that they don't either be taken seriously or they have a long wait or, you know, they have to go through the assessment right from the beginning. And I hope that this emergency hotline is going to help avoid those lengthy times and those lengthy processes and come immediately as soon as possible, at least, to a good suggestion that can actually help people. Have you ever experienced an emergency of any kind of nature, actually, but especially mental health related?

Fionn: Yeah, I'm lucky enough that I haven't, personally. I think like anyone, I've known people, right, who've gone through mental health struggles or mental illness. And I think one thing that I think has been very positive over maybe the last decade or so is the somewhat destigmatization of talking about that. 

Kalpita: Mhm.

Fionn: And I've actually- It's been one of those slight culture shock moments, positive culture shock moments that I've had being in Denmark and seeing, you know, a politician step away from their role like a sitting government minister because of depression or because of stress. And actually, I just remember thinking, wow, where I come from, I don't think that would ever happen because the politician themselves or maybe even the general public might, you know, just immediately label that as, well, they're not up to it. And yet people wouldn't do that if that person had cancer or that person, you know, broke a leg. And of course there are differences, but at the same time, mental health is, is part of health. And yeah, as I said, I'm lucky enough to not have had to go through something like this. And as a dad with two small kids, I'm always, you know, waiting for the time, the, you know, the moment in the playground where you're [laughs] going to have to go to the hospital at some point. 

Kalpita: I hope not.

Fionn: It hasn't come yet, thankfully, right. But I think just exactly as you said as an international, there's often been times when I felt, oh, just the system typically is- It can be a bit complex, it can be a bit arcane. Doubly so, you know, if you're dealing with that through your second or third language and having something there in those worst moments, it should be as simple as, okay, here's the like internationally recognized emergency phone number. Well, there I can hopefully get the help I need, especially given the current situation or the, you know, the previous situation where mental health helplines or emergency helplines did exist but weren't always staffed or they weren't 24-hour. And I think, I don't know, maybe this just in as I see it plays into a really positive trend overall of those services getting the support that they need.

Kalpita: Yeah, I totally agree and I'm so glad our money and taxes are going in the right places. I think it's a great time to talk about something totally and completely different to. This is Denmark's national bank continues to cut interest rates and they expect it to go as low as 1.1% by the summer. That sounds quite lovely.

Fionn: It does, right? I think maybe the only people who don't greet that news with happiness are whoever is looking at the profit line or cost to profit margin in a bank somewhere, right. But I think everyone else is quite happy. And of course this comes in a broader context, right. Denmark's Nationalbank follows and is the policy to follow, typically the European Central Bank. And we've seen, I think this is the fifth ECB rate cut, you know, one has been announced or it was cut, sorry, not even announced. But it was cut on Thursday and that's the fifth since June. And this is mostly driven by arguments that the kind of biggest inflation surge that we'd seen in generations has mostly been defeated and yet at the same time, Europe overall. And you could also potentially argue this a bit with Denmark, that there is a flagging economy that needs a little bit of relief.

Kalpita: Yeah. I totally agree. I mean, it's a happy change introduction for especially those making investments in property. But other than that, it also opens opportunities for lifestyle purchases. You can get a car, like we spoke about, EV is getting expensive, last time. Maybe it's a good time to invest in an EV right now before it gets really, really expensive and you just absolutely cannot do without one. But similarly, there are- I know, people who also like to invest in summer houses and also recreational activities which do cost a lot of money. And it's often a thing among this society, at least, to borrow money for better lifestyle or health or whatever else. So I think that's good news overall. Except for the banks.

Fionn: [Laughs] Yeah. And I mean, it's probably more of a mixed picture for the banks, right, than something that is completely negative. But I think, you know, if you are somebody who's in investing in property or you're somebody looking at buying a first property, for that matter, there's probably more good news to come in that front. A lot of economists expect that there'll be further ECB rate cuts, which typically would affect the Danish Nationalbank. And that's also why, of course, we see the prediction that the Danish Nationalbank and the interest rates here could cut even further by the summer, so they could get down to that very low percentage. And I think that's, you know, where the overall Eurozone interest rate is at the moment or the ECB interest rate at the moment. It's kind of teetering at the edge of what they call the "neutral level." So that's a level where they say, you know, it's neither stifling nor inflating or enhancing economic growth. And I think, you know, we've talked about price pressure a lot. 

Kalpita: Yeah.

Fionn: I think everybody has felt it. And there's also talk in some cases of both poor productivity and labor shortages. So that will maybe stifle a little bit just how far some of these rate drops can go. But I also think, you know, even quite recently, there was a lot of sighs of relief maybe from policymakers that the tariffs which hit China and Mexico and Canada had not been levelled at the EU, or Denmark, for that matter. Just yesterday, unfortunately, Donald Trump said, yes, absolutely, you know, we're going to tariffs, tariffs, tariffs towards the EU. And that may as well be playing a factor in any kind of future rate cuts as well, or adjustments there. Because, of course, if there are punitive measures being taken by the US over slights or perceived slights or Greenland or wherever else, it's most likely, I would say, that we will see- reaching kind of a further rate drop. But you could also argue that maybe some of that's already being penciled in.

Kalpita: Yeah, but I mean, make hay while the sun shines, no?

Fionn: [Laughs] Absolutely, absolutely.

Kalpita: Speaking of tariffs and percentages, the biggest news that's coming out is that we need to have 90 billion. This time I'm getting it right. It's 90 billion Danish kroner to live up to the 5% NATO requirement for defense spending. That is a big, big amount. And one of the think tanks has very smartly suggested three options of doing that. One is we work more. Yay. Second is cut welfare. Yay.

Fionn: Bound to be popular.

Kalpita: [Laughs] Or introduce a war tax. Yay. Yay. Yay. This one is going to be a tough one.

Fionn: Yeah. We really just wanted to, you know, take the podcast in a direction where we'll end on a fun and positive note, right. I think it is dramatic, definitely, to say the least, when you look at those numbers. I mean, I don't know about you, I unfortunately don't have 90 billion kroner in spare change in my pocket. But I think, you know, this number of 5% is a little wild, if you ask me. And just for some context, I mean, if you've been listening to Donald Trump the first time around, he very often in that kind of 2016-2020 term of his, battered on about NATO members not pulling their weight and needing to reach that 2%. And which 2% being that NATO's guideline of GDP spending on defence. And there has actually been a really dramatic change. So if you look at 2014, I was looking at- Actually this was from a press release from NATO itself. So if you look at 2014, there was only three members of NATO, which was the US, the UK and Greece, who met that 2% figure. Do you want to guess what the number is now?

Kalpita: 3%?

Fionn: It's a lot more. So the number is 23 members now are above the 2%. 

Kalpita: Yeah. 

Fionn: Including Denmark. So Denmark is just under 2.4%. And yet, to suddenly go up to 5% is like, it's wild, as you say, it's 90 billion kroner wild. So the highest spending, you know, percentage-wise of any of the NATO countries is Poland, which last year spent just over 4% and they aim to boost to 4.7% this year. But for pretty much everyone else, this is so far from where they are today. 

Kalpita: Yeah.

Fionn: And the US itself is at 3.4%. So that would also be an absolutely enormous jump. And this is, I think, one of those moments where Trump was often described as, well, don't take him literally, take him seriously. And if Trump wanted the US itself to jump up to 5%, it would be really difficult to see how that would actually fit with his own, you know, domestic calls to slash government spending. And that's a key part of his political message, right, this time around. But you can also say, well, is this demand one that's being really designed to be failed? And I saw there was Ruth Deyermond, who is a senior lecturer at the Department of War Studies at King's College, which might be one of the coolest titles I've ever heard in my life. You know, she was saying, well, maybe the intention is for states to fail. And then you can think, well, either it is a somewhat good faith argument to, you know, well, shoot for the moon and even if you fail, you're still up there with the stars. So, you know, set this really high target and bully, so to speak, your NATO neighbors so that they don't maybe hit the 5%, but they, you know, get a bit of a boot up the bum and get up to 3 or 4% at a huge cost, right. Or is it a case where Trump wants to set up NATO for failure? And that's obviously a very serious kind of topic or idea, but he has, you know, come out with a lot of statements around something like this and not wanting to contribute more to NATO. So, yeah, I look at that and I say, okay, I would not take this seriously- or literally, sorry, but I would take it seriously.

Kalpita: I totally agree. Well, one of the things that happened today was I had some Danish family over and I brought this topic up that, hey, this is one of the things that we're going to talk about. And the immediate reaction was, yeah, well, maybe we can do this or we can do that or we can do it like this. So we can do it like that. And it suddenly struck me that, you know, we don't have to actually listen to this guy. We can oppose him, we can set our own agenda as well. And we can also make demands, because if he needs, I mean, he needs the NATO and NATO needs the US as well. So there has be a middle ground that we all can meet at. At the same time, it does make sense what you say that, you know, shoot for the moon and you get, luckily, if you do, close to the stars. And perhaps that's his agenda. But at the same time, I do like the European Union's, in general, response to everything that he's been trying to stir so far, is basically to put a united front. And I'm a big fan of that because it's in some way creating the right waves in Europe and for all good reasons. And if, for whatever reason, if especially the European members decide to bend a knee to this guy, it'll get more and more difficult and serious for us. But at the same time, I think he's also in some way inducing an economic crisis which is not only in his backyard, but also in the neighborhood, so to speak. And I don't think that's a great thing. I do in some way, a little bit. I might have my differences, but a little bit trust into the smart people that are working in Denmark, NATO especially, and the European Union to not snowball this to whatever it has already.

Fionn: Yeah, I think there's, I can't remember the name of it, but there is a term for not worrying about something because you have confidence that somebody much smarter out there is working on this. And I think that's at least where I hope as well. And you know this, it does absolutely come in a context of, well, a broader context, right. And it comes in a context of Greenland, of tariffs, of Trump generally, you could say, talking smack about the EU and talking smack about NATO. But when you think about Trump, he always positions himself as this businessman, and it's the art of the deal. And you can very often see his worldview almost as in. And you see this a lot with trade, that you're either getting screwed or you're the one screwing somebody else. So everybody who has a trade surplus with the US, well, they're screwing us. It's time for us to screw them. And that is not a game I want or a worldview, right. That I want the EU or Denmark for that matter, to lean into and say, well, okay, we need to volley back any serves of that type that he's doing. And there is, you know, there is absolutely, I think, a shift towards what the NATO Secretary General, Mark Rutte, called a shift towards a wartime mindset in terms of national planning. Now, he himself said it was too soon to be setting an exact spending goal. But especially when you look at across the EU and when you look especially, like the closer to Russia actually that a country is, you are seeing higher spending and you are seeing countries agreeing that like typically, yes, well, the 2% might not be enough and we may need to up that. Or in, you know, that it could be seen as being insufficient to meet regional defense plans and the kind of capability that the alliance thinks it needs to react to threats that are opposed to it. And I think you were mentioning to me before we got on air about how Denmark itself is kind of leaning into that, right. And maybe is not spending that 90 billion already, but is already spending, or signing off on spending, quite a huge sum on defence for the Arctic.

Kalpita: That's 14 billion kroner. And that's the news up on the Defense Ministry as well. And it's in close cooperation with the federalists government and the government of Greenland. And I have a list of things that they are going to initiate under this agreement, is new Arctic ships to solve efficiency and flexibly solve tasks in Greenland and carry capabilities such as helicopters and drones, which is what we need right now. Long range drones as well. And the other thing is improved situational and intelligence picture. I am also assuming this is with relation to the environment as well. So not only defense in the exact meaning of the word. And increased enrollment in the Arctic basic education, which I think is also very, very timely. I mean, high time that it was done already, but I'm glad that they're-

Fionn: Absolutely.

Kalpita: -focusing on it this time as well. And the partial agreement also aims to strengthen public safety with an emphasis placed on ensuring investments to support local jobs and local businesses in Faroe Islands and Greenland. Which also brings me back to the point of the suggestions that this think tank has made of three not so very agreeable things is cut, sorry, cutting welfare, which is totally unfair, I think, and introducing a war tax, which is even more unfair and having people to work more. I think I will make an official petition through this podcast actually to instead invest resources, time and energy in building opportunities and giving internationals and all those who are very fantastically educated in all kinds of fields, jobs. So there are more people in the job market, then people are paying more taxes anyway and you already cut welfare with that. So maybe there is a strategic way of looking at it than just asking citizens to pay more this way or the other. I think that's a completely ridiculous suggestion to come from a think tank, of all things.

Fionn: Yeah, I mean, I think there's, as I say, there's always many roads to roam. And I think when you look at the response from politicians kind of across the spectrum here in Denmark to this news, it wasn't all like, oh, great, well, let's cut welfare and force people to work longer and introduce a war tax. Which I saw, you know, under the kind of framework that they provided there, right, to reach that 30 billion per percentage boost. It was an enormous levy on ordinary working families. And I don't think anywhere I saw there was a political appetite for that. One thing I did think was actually quite interesting, and I apologize in advance if I'm getting this wrong, I believe it was from one of the members of Enhedslisten. Kind of not dismissing out of hand the idea of a war tax, but it not being a war tax, so actually investing money or keeping money for general emergency, so you could almost say a rainy day fund, but for very, very rainy days. So whether that be for, you know, defence spending and preparedness, but also combating things like climate change. And when you just think about where the world is at the moment, I've been reading a few articles this week referring to, you know, we're kind of in a historical inflection point, right. We have climate change, we have a lot of regional conflicts that, you know, we cross our fingers, but could boil over into something larger. And of course you have the AI revolution as well. And now this is really, you know, a tangent, but investing in, well, how do you protect your citizens from those threats if you want to put them that way? Embrace the opportunities that you can. And that can be in, you know, absolutely, in the Arctic. And that's what I like about, you know, hearing the plan here, that there is defense spending in it, it's an enormous sum. But it is not only defense, it's also making everyday, or it should be aimed at making everyday citizens across, whether it's Denmark or the Faroe's or Greenland's lives, better overall because not to sound overly sappy, but, you know, well, what is it that you're fighting to defend? And I think Denmark is known internationally for having a certain kind of culture and way of life and social safety net and suddenly eroding all of that just at the expense of defense spending is- It would be enormous sacrifice, more so than just a monetary one.

Kalpita: Oh, yeah, absolutely. And when all of that stress of being in war, not being in war, but just being in crisis, no matter where you look and what you do is hopefully not landing you in a mental health crisis. And if that's so, then we will have call and get help. Yeah. But that brings us to the end of our lovely second episode. Thank you for being here.

Fionn: Yeah, thank you so much. Likewise, it's been a pleasure. Even if we're talking about such fun topics as interest rate cuts, you know, and maybe less uplifting topics like psychiatric emergencies or war taxes, but nevertheless, it's been an absolute pleasure.

Kalpita: Thank you very much. And hopefully next week is much more positive. So please stay tuned and have a good weekend.

Fionn: Have a good week, everybody.

Kalpita: Bye.