Budget deficit expected to hit 2.9pc

2nd February 2005, Comments 0 comments

2 February 2005, AMSTERDAM — Initial figures indicate that last year's Dutch budget deficit will be 2.9 percent of Gross Domestic Product (GDP), just under the 3 percent maximum imposed by the European Union's Growth and Stability Pact.

2 February 2005

AMSTERDAM — Initial figures indicate that last year's Dutch budget deficit will be 2.9 percent of Gross Domestic Product (GDP), just under the 3 percent maximum imposed by the European Union's Growth and Stability Pact.

Although the figures are only provisional, Finance Minister Gerrit Zalm said there was a "real" chance that final figures would show a deficit under the 3 percent limit, news agency ANP reported.

But figures from local governments and the healthcare sector have yet to be processed. In previous years, big council budgets led to a higher deficit than expected.

Nevertheless, Zalm said a survey was carried out among councils in December and that the results were taken into account when drawing up the provisional budget deficit figures.

The deficit hit 3.2 percent in 2003, leading to embarrassment for Zalm who was vocally critical of France and Germany running budget deficits over several years above the 3 percent maximum stipulated by the euro-zone's stability pact.

The Dutch government has embarked on an ambitious cost-cutting programme in recent years to reduce the deficit to 0.5 percent in 2007. But the cuts led to mass protests last year as 300,000 people demonstrated in Amsterdam in October.

The union-led campaign won hard-fought concessions from the government on WW unemployment benefits, the WAO disability pension scheme and life savings schemes. In exchange, unions agreed to moderate wage demands this year and the government abolished tax breaks on early retirement.

[Copyright Expatica News 2005]

Subject: Dutch news

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