Dutch Central Bank calls for immediate cuts

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The Dutch Central Bank wants the government to balance its budget as quickly as possible, denying warnings that deep budget cuts will hamper economic growth, the body says on its website.

The announcement came a day after the CPB Netherlands Bureau for Economic Policy Analysis warned that, under the current government policy, the budget deficit would rise to 4.5 percent in 2013, well above the 3 percent limit set by the European Union.

The CPB announcement prompted several politicians and economists to call for the government to set overstep the 3 percent limit. They argue that further cutbacks will only dampen economic recovery even more. The Dutch Central Bank, however, stressed that “The temptation not to intervene now must be resisted.”

Further budget cuts will have a minimal impact on the economy, the Central Bank notes. In addition, it lists seven more reasons to balance the budget. The country can't continue covering debts with yet more debts, it claims for example, because that would only put off the problem. It also says that breaching the EU 3 percent norm is “not a solution.

© Radio Netherlands Worldwide

1 Comment To This Article

  • kocourkov

    on 4th March 2012, 16:09:52 - Reply

    There seems to be an awful lot of willingness among Dutch policymakers these days to deny reality. Huge budget cuts immediately will mean that the NL economy will go into a tailspin. Housing market is already in the toilet, and surrounding countries have better economies.

    Can't blame it on foreigners, this will be entirely of the government's making. Of course the bank will be happy that some numbers balance. I guess that's all that is important.

    So, when everything goes to Hades in a handbasket, will the DCB admit that it was wrong? Of course not, it's always someone else's fault in NL.