Danish PM loses coalition partner in energy row

Danish Social Democrat prime minister Helle Thorning-Schmidt has vowed to remain in office after a coalition partner departed over a controversial energy sell-off.

Yesterday's pullout of the Socialist People's Party (SF) of the three-way alliance, in office since 2011, failed to halt the sale of a stake in the state-owned Dong Energy to US investment bank Goldman Sachs.

The bank agreed to pay 8 billion kroner (€1.07 billion) for an 18 per cent stake in the company, a highly unpopular move opposed by more than two-thirds of Danes.

Finance minister Bjarne Corydon welcomed a vote backing the sale by the parliamentary finance committee, saying the proceeds would enable further investment in energy after a period of cost-cutting. "It's good that Dong Energy now has firm ground under its feet," he said.

But several of the prime minister's political allies have opposed the deal with Goldman Sachs, dubbed a "shady partner" by former Social Democrat premier Poul Nyrup Rasmussen.

After pulling out of the coalition, the SF said it would continue to support the government from the opposition benches.

Ms Thorning-Schmidt said she looked forward to a “trusting co-operation” between her former coalition partner and her administration, already dependent on opposition support from the Red-Green Alliance. Seven weeks after her last cabinet reshuffle, she promised to fill quickly the six vacancies left by departing SF ministers.

The move to sell off the energy company stake drew huge protest on Wednesday night outside the Copenhagen parliament, known as Børgen (the Castle). Protesters carried a banner bearing a vampire squid – a nod to a description of the US bank's controversial investment practices in a 2009 Rolling Stone article.

"I'm very disappointed a red government can push this kind of sale," said Solveig Weiss, a retiree, to Bloomberg. "It's completely right-wing policies and certainly doesn't help that they're selling shares to a somewhat dodgy enterprise."

Goldman Sachs declined to comment on the sale yesterday “as a matter of principle”.

Ms Thorning-Schmidt has been under fire since becoming Denmark’s first woman leader in 2011.

Faced with growing deficits, her administration has pushed through reform measures that have riled party rank-and-file, such as raising the pension age, lowering welfare and cutting corporate tax rates.