Bleak economic figures spell more budget cuts
17 February 2004
AMSTERDAM — Finance Minister Gerrit Zalm refused to commit himself on Tuesday, but a further round of budget cuts seemed unavoidable as the latest forecast predicted the country’s deficit would rise to 3.3 percent of Gross Domestic Product (GDP) this year.
Under the Stability Pact agreed between the euro nations to maintain the value of the common currency, members have to keep their annual budget deficit at or below 3 percent of GDP.
Zalm has been a harsh critic of France and Germany for ignoring the rules of the pact.
Under Zalm’s stewardship, the coalition government in the Netherlands has agreed to shave a massive EUR 17 billion from spending over the next four years.
But the government’s macroeconomic think tank CPB came with more bad news on Tuesday with its forecast that the budget deficit will reach 3.3 percent this year.
Speaking to the media, Zalm said he had anticipated a further worsening of the economic situation in the Netherlands, but added that the CPB predictions “are not nice figures by any means”.
The finance minister said his officials will review the CPB report and that he will then present further proposals to the Cabinet. “But first we have to study the situation,” he said.
Earlier in February, the CPB indicated that the deficit could reach 3.1 percent this year. In response, Zalm said he would introduce additional savings if this turned out to be the case.
[Copyright Expatica News 2004]
Subject: Dutch News