Unions lukewarm over EUR 1bn budget revamp

30 September 2004

AMSTERDAM — The FNV trade union confederation has reacted unenthusiastically to the Dutch government’s acceptance of a plan which would reduce the cutbacks in next year’s budget by EUR 1.1 billion.

Finance Minister Gerrit Zalm unveiled his stringent budget on 21 September. It contained EUR 2.5 billion in cuts for next year to reduce the deficit to 2.6 percent of Gross Domestic Product (GDP).

But at the close of the debate about the 2005 Budget in Parliament on Wednesday, Zalm indicated his willingness to accept the compromise plan but forward by MPs of his Liberal VVD and the two other government coalition partners, the Christian Democrat CDA and Democrat D66.

While expressing concern about some of its financial aspects, Zalm said the proposal was broadly in line with his budget measures.

The compromise proposal alters Zalm’s budget plans by scrapping cuts to the education budget and retains the grey number plate scheme that exempts company cars from the BPM registration tax.

There would also be a longer transition period before government moves to reduce the attractiveness of the VUT and pre-pension early retirement schemes come into force. Additionally, redundancy payments will not be taken into account when calculating a person’s WW unemployment benefit.

In total, these measures would shave EUR 1.1 billion from the cutbacks outlined in the budget.

Writing in the confederation’s e-magazine, FNV chairman Lodewijk de Waal conceded there had been “a lot of movement” since Zalm unveiled the original lists of cutbacks and savings. But De Waal said moves to ease the severity of the cutbacks were “absolutely too little”.

De Waal also attacked the alternative budgets put forward by the opposition parties, saying they were broadly similar to the government’s measures. “This has all been arranged in backrooms and fixed behind our backs,” he said.

The chairman of the Christian CNV union confederation, Doekle Terpstra, dismissed the reduction in the government’s cuts as a cosmetic exercise. He said it was strange that Zalm had “suddenly” found the money to finance the reduction in the cutbacks.

The unions have organised a series of strikes and rallies to campaign against the austerity measures being pushed through by the coalition government of Prime Minister Jan Peter Balkenende.

The traditional wage talks between the unions, employers and government have broken down. The unions accuse the government of backtracking on earlier commitments it made when persuading the unions to accept a two-year freeze on wage rises.

Large strikes have been held in Rotterdam and Amsterdam this month and trade unions are calling on their members to turn out for a massive demonstration in Amsterdam on Saturday 2 October.

Subject: Dutch news