Tough curbs on state spending 'essential': Dutch PM

5th March 2012, Comments 0 comments

Tough measures to curb state spending are essential for economic growth, Dutch Premier Mark Rutte said Monday as he prepared to face coalition partners for hard talks over the deficit.

But Rutte slapped down suggestions The Hague was under pressure from EU officials to get the Netherlands' finances in order as three weeks of talks on how to cut the deficit and keep the current government together began.

"If government expenditure gets out of hand, you simply must take measures. This is an absolutely essential condition for economic growth," Rutte told journalists at his residence in The Hague, were the talks are taking place.

"We are not doing this because of Europe. We are doing this because it is important to ourselves," he added.

Figures by the country's central planning bureau (CPB), to which the government refers, said Thursday that savings of around 16 billion euros ($21 billion) were needed by 2013 to meet the EU's public deficit limits.

The Dutch government was put on the spot as it acknowledged that the 2013 deficit would rise to 4.5 percent of domestic gross product under current conditions, well above the 3.0 percent EU ceiling.

The CPB said the Netherland's deficit would fall back to 4.1 percent in 2014 and 3.3 percent in 2015 barring any changes to government strategy.

The figures came as a blow to the hard-line Dutch government, which has insisted that heavily-indebted countries like Greece respect the EU's deficit rules.

The budget talks in The Hague are aimed at curbing spending, but are also seen as a litmus test for Rutte's rightwing coalition government, which together with far-right support holds a majority in the Dutch parliament.

"It is without pleasure that I am here," said Dutch far right leader Geert Wilders, whose Freedom Party (PVV) supports the coalition government.

A committed eurosceptic, Wilders vehemently opposes further budget cuts but suggested his party might be willing to accept them if the government gave ground on separate "non-financial" points such as immigration and asylum.

"If we only negotiate over finances, reaching an agreement will be very difficult," said Wilders, who is known for anti-Islam and tough immigration positions.

© 2012 AFP

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