Denmark's PM Rasmussen aims to broaden government

By Teis Jensen

COPENHAGEN (Reuters) - Denmark's Prime Minister Lars Lokke Rasmussen has decided to invite two allied political parties to join the government ahead of reform negotiations that could lead to a snap election.

Since last year's election the government has consisted only of Rasmussen's Liberal Party, which holds just 34 of 179 seats in parliament, making it difficult at times for him to gain the majority needed to push through policies.

"It is my assessment that the right thing to do would be to invite the Liberal Alliance and the Conservative Party to join the government with our party," Rasmussen told the audience at his party's annual convention on Saturday.

The government on Friday clinched an overdue budget deal for 2017, but still faces tough negotiations on a broad 10-year financial reform.

A main hurdle for the reform has been a demand by the Liberal Alliance to cut the top rate of income tax by 5 percentage points.

The Liberal Alliance has threatened to topple the government if that demand is not met. However, it seems unlikely that Rasmussen will be able to gain support from a majority in parliament for the tax cut.

Pundits have speculated that an invitation to join the government could soften the Liberal Alliance's demand, but the party has not signaled that so far.

Rasmussen did not extend his invitation to the Danish People's Party, the largest of the three parties supporting his government.

He had analysed the parliamentary situation and concluded it would be best to invite the two other parties, with which his party shares many values, he said.

He said negotiations with the two parties would begin on Monday.

(Reporting by Teis Jensen; Editing by Dale Hudson)

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