Denmark's government proposed tax cuts it said would remedy labour shortages, but the ally it relies on to stay in power said it saw no reason to tax wealthy citizens less, setting the scene for tense budget negotiations. Prime Minister Lars Lokke Rasmussen's right-leaning three-party coalition said on Tuesday it planned to cut income taxes and levies on cars and household services by 23 billion Danish crowns ($3.7 billion) per year up to 2025.

It plans to say how it will finance the cuts when it presents its draft 2018 budget on Thursday. The pro-welfare and anti-immigrant Danish People's Party (DF), whose 37 lawmakers Rasmussen relies on to pass legislation in the 179-seat parliament, said such cuts should not favour the better off.

Copyright Reuters, 2017