16 October 2008

THE NETHERLANDS -- In a response to Dutch Finance Minister Wouter Bos’ comments on local councils’ fund deposit, local governments have stepped up to say they do not want to be compelled to deposit their money with the state-owned Dutch Municipal Bank (BNG) or the Dutch Water Board Bank.

On Tuesday, Bos said on TV that local councils should be allowed only to put their reserves into the BNG or the Water Board Bank.

Bos made the comments after it emerged local and provincial governments have at least EUR 250 million invested in foreign banks which have run into financial difficulty or gone bankrupt.

The Association of Dutch Municipalities says Bos is panicking. It also says it does not agree that local governments have behaved irresponsibly.

The province of North Holland is furious with the minister. The province, which currently has EUR 78 million in troubled Icelandic banks, says the transactions were made after discussions with the Dutch Central Bank and government, and in accordance with existing guidelines.

Councils and provinces with money in Icelandic banks have joined forces in an attempt to reclaim their funds. Their lawyer is investigating possible legal steps.

[Radio Netherlands / Expatica]