DANISH BOND PRICES RISE AFTER AUSTERITY PLEDGE
Prices rose on the Danish bond
market after Prime Minister Poul Schlueter said the government
was prepared to impose further austerity measures to limit
domestic consumption if the economy did not improve over the
summer.
    A typical 20-year mortgage bond had risen to 81 by noon
from 79-1/4 at the close last night. "It is because of possible
optimism that the government will intervene if necessary," one
dealer told Reuters.
    Schlueter said after a routine cabinet meeting yesterday "If
economic tightening up is necessary, we will do it."
    The government has already imposed three austerity packages
since December 1985, in an attempt to bring down the external
current account deficit, which rose to a preliminary 34.5
billion crowns in 1986 from 29.1 billion the previous year.
    Schlueter made clear that an autumn general election would
not make the government postpone any austerity measures. The
government has to call an election by January 1988.
    He expressed surprise at concern in some financial quarters
over the level of private and public wage settlements last
month, worth a minimum three to four pct a year. These would
lead to higher productivity, Schlueter said.
 REUTER
