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No, 500,000 Danish jobs are not directly dependent on the EU single market

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Fact-check

TjekDet, Denmark

13 May 2019, Updated: 13 May 2019

No, 500,000 Danish jobs are not directly dependent on the EU single marketCC-BY-SA 3.0 Thue C. Leibrandt/Wikimedia

Half a million Danish jobs depend on Denmark being part of the single market, say several pro-EU politicians and organisations. But that claim is misleading according to researchers.

In Denmark, more than half a million jobs are, in one way or another, linked to export to other countries within the EU single market. But the export to those countries does not depend on Denmark being in the single market. We could still export to those countries, even if we weren’t part of the single market. It would just be on less favourable conditions.

If one wanted to emphasise something, which is a good deal for Denmark, an example is the access to the European single market. This allows goods, people and services to move freely across borders, and this ensures more trade amongst EU countries.

And access to the single market is so significant for the Danish economy, that more than 500,000 Danish jobs actually depend on it.

At least that’s the message repeated over and over by politicians and organisations.

But that presentation of the benefits of Denmark being part of the EU single market is misleading, according to our fact check.

A widely used argument

Amongst the more prominent names in the choir, we find political leader of the Radikale Venstre, Morten Østergaard who, in a party leader debate about the EU on TV2 News in November, said:

“More than 500,000 Danes owe their jobs to the fact that we have free movement for goods and people across the EU’s (inner, ed.) borders.”

The lead candidate for the Conservatives (Konservative Folkeparti) for the European Parliament elections, Pernille Weiss, cites the same maths. On her website, she writes that “more than half a million Danish jobs depend on us being able to freely sell our goods in the EU.”

Also the Prime Minister, Lars Løkke Rasmussen (leader of Venstre) repeated the message, in a speech last week, referring to a calculation by the employers’ association, Dansk Industri.

But even though the access to the single market has been beneficial to the Danish economy, it is incorrect that half a million Danes owe their jobs to it. That would mean, that half a million Danes would be without a job, if we were to imagine Denmark stepping out of the EU single market. And that is unthinkable, a national economist has told TjekDet.

Pointless numerical exercise

It is not a new idea, that half a million Danish jobs depend on the EU single market. If we go back in time, roughly five years, to the European Parliamentary elections in 2014, the same claim was circulated. Back then, the messenger was the employers’ association, Dansk Industri, who writes in a note from 2012, that “500,000 Danish jobs depend on the EU.”

In a report, produced for the Ministry of Business, an even higher number is featured: 578,000 jobs, to be exact. It also says that the many jobs – corresponding to one fifth of all jobs in Denmark – are jobs related to export to countries within the EU single market.

But that doesn’t mean that the jobs are directly dependent on the inner market, says Allan Sørensen, lecturer at the Economic Institute at Aarhus University.

If we exit the single market, it will not leave a half million Danes at home twiddling their thumbs. The reduction in employment will be much smaller, because we will still export to the single market, even if we were no longer members of it,” he says.

So, it would have consequences for Denmark’s economy, if we left the EU and the single market. But Danish businesses would still be able to export to other EU countries. It would just be to a lesser extent and on less favourable conditions, the researcher explains.

Previous senior advisor and Professor of economics at the University of Copenhagen, Hans Jørgen Whitta-Jacobsen, agrees.

”Counting employment in this way does not make much sense. It might be right that there are half a million Danes employed, who work with something, which benefits from the possibilities created by the EU single market and customs union. But if we were to leave, they would not all be left unemployed,” he says.

Leaving would hit the Danish economy

According to researchers, however, leaving the EU single market will no doubt cost jobs. Exactly how many is difficult to predict. But even though it will hurt the Danish economy, the unemployment would fall again, eventually. Because those, who would lose their job would find work somewhere else, says Allan Sørensen.

“As an employee in a company, which exports to EU countries, you would probably be impacted one way or another, because the company wouldn’t be able to sell as much as it had been used to. But not all the employees would lose their job. And those who would lose their job would find jobs elsewhere over time,” he says.

The explanation is that Danish companies would no longer have the same favourable opportunities to sell many of the products, they produce today. Hence, they would, to some degree, have to come up with other things to produce. That transition would in no way be free, but would nonetheless create new jobs.

Hence, the unemployed would surely find work again. But leaving the EU single market would necessarily have a negative impact on the Danish economy, Hans Jørgen Whitta-Jacobsen also says.

”You wouldn’t get unemployment in the long term. After some adaptations in the economy, those fired would be employed elsewhere and create value in other jobs. But they won’t create as much value,” he explains.

Dansk Industri: It is not about the market itself

The claim about the 500,000 EU dependent jobs we can, as mentioned, trace back to 2012, when chief analyst at Dansk Industry, Allan Sørensen, mentioned the number in a note.

When presented with the researcher’s critique of the claim, Dansk Industri’s Allan Sørensen maintains that it is not incorrect to claim that half a million jobs are dependent on the EU single market. But, he says, it is important to include the fact, that it is the countries in the single market, which Danish export is associated with, and thus not the single market itself.

“Sometimes, it is presented as though it is the single market itself, which creates these jobs. But it is the individual countries, rather, which demand certain products,” he says and adds:

“Of course, the alternative is not that we will have no export to those countries.”

The lead candidate for the Conservatives (Konservative Folkeparti), Pernille Weiss, also admits that a Danish goodbye to the single market would not make half a million jobs disappear into thin air.

“The way I have understood it is, that these are jobs, which have been created thanks to our membership of the EU. But that doesn’t necessarily mean that removing us from the EU would lead to that exact number of jobs disappearing,” she says.

TjekDet would also have liked to ask Morten Østergaard, whether he imagines that employment in Denmark would fall by half a million, if Denmark stepped out of the single market. But Morten Østergaard has not had the time to attend an interview, and he refers instead to the report by the Ministry of Business.

Translation by Caroline Sejer Damgaard / VoxEurop

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