Dutch to cut 4.3 bn euros in 2014 budget to hit EU deficit ceiling

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The Netherlands' Liberal-Labour coalition government said Friday they had agreed to slash over four billion euros from the 2014 budget in the hope of driving down the deficit to Europe's three percent ceiling.

"We have agreed on a package of savings of 4.3 billion euros ($5.6 billion)," Liberal Prime Minister Mark Rutte told journalists after a cabinet meeting.

The announcement came the day after the Dutch Central Statistic Bureau (CBS) said the public deficit would be 3.3 percent this year and 3.4 percent in 2014, above the EU limit at a time when the Netherlands is seeking to set a good example to other eurozone members.

The deficit hit a high of 4 percent in 2012.

Rutte said Thursday's deficit predictions from the CBS were "a setback", but insisted no more cuts would be made from the 2013 budget.

"We will not make any more cuts in 2013 because the savings can only be made through taxes," Rutte said.

"We will take these measures in 2014, to strengthen public finance and respect the three percent" limit, he said.

The savings will be made largely through ending some tax breaks, cuts from ministerial budgets and some wage freezes.

The CBS also predicted Thursday that the Dutch economy would return to growth in 2014, increasing by 1.0 percent, after a contraction of 0.5 percent in 2013.

© 2013 AFP

2 Comments To This Article

  • Concerned citizen posted:

    on 5th March 2013, 12:02:01 - Reply

    At a time when the countries of the Eurozone are presenting austerity budgets to ensure that public spending deficits do not exceed the 3% of GDP ceiling required for the single currency, Aujourd’hui en France reveals “the incredible story of the birth” of this limit. The daily has found “the man who, at the request of [former French president] François Mitterrand, hastily came up with the emblematic figure.”

    Guy Abeille, age 62, a former senior Budget Ministry official and “the inventor of the concept, endlessly repeated by all governments whether of the right or the left, that the public deficit should not exceed 3% of the national wealth,” told the newspaper –

    We came up with the 3% figure in less than an hour. It was a back of an envelope calculation, without any theoretical reflection. Mitterrand needed an easy rule that he could deploy in his discussions with ministers who kept coming into his office to demand money. [...] We needed something simple. 3%? It was a good number that had stood the test of time, somewhat reminiscent of the Trinity.
    The daily remarks on the strange character of this anecdote: “In an irony of history, the technocrats in Brussels drew on the legendary 3% for inspiration when creating another rule [stipulated by the new Fiscal Compact], just as factitiously Cartesian, which obliges states to limit their structural deficits to 0.5%. Why not 1% or 2% ? No one really knows.”


  • HTD posted:

    on 4th March 2013, 14:32:28 - Reply

    Well, PM Rutte should certainly know by now that he should not expect positive results by continuing on with the same failed policies that he applied in 2012.
    It's time for the Labor Party (PvdA) to bail out and give the Dutch electorate another chance to elect a government that has more realistic ideas as to how to turn the economy around.