Cabinet: 6 Billion Euros in Extra Cutbacks
THE HAGUE, 21/06/13 - The cabinet is to make a maximum of 6 billion euros of extra savings next year. If the economic data deteriorates further in the coming months, this will not trigger yet more cutbacks, Finance Minister Jeroen Dijsselbloem has said in a letter to parliament.
"We have bitten the bullet and committed ourselves to a structural 6 billion in extra measures from next year,” said Dijsselbloem. The cabinet is thereby adopting the order of European Commissioner Olli Rehn, who stated in his recommendations for the Netherlands that the cabinet must make cutbacks of 1 percent of Gross Domestic Product (GDP) next year. This comes to about 6 billion euros.
Dijsselbloem acknowledges that this means the Netherlands could overshoot the European budget deficit ceiling of 3 percent of GDP next year as well. “But you can assume that the commission will then give us more time if we make structural savings of 6 billion and the figures worsen. And they are worsening as we speak".
FNV calls 6 billion of cutbacks unwise. The chairman of the biggest trade union federation, Ton Heerts, said on TV programme Nieuwsuur that the cabinet must renegotiate with Rehn for leniency.
Former Finance Minister Gerrit Zalm also believes it would be wise “to get around the table once more with Brussels.” Zalm, now CEO of the nationalised ABN Amro bank, says the time period is too short to be able to come up with a good budget for 2014.
Zalm said the cabinet should have had the plans for next year ready in March or April. “Then there would have been half a year for making decisions. You are not then forced into short-term measures.”
Heerts said on Nieuwsuur that the FNV will prepare for industrial action if the cabinet goes ahead with the extra cuts. The cabinet is “playing with fire” with the announcement that it wants to make extra cuts of 6 billion. The other unions and employer organisations think the same, he declared. ‘You must not make extra cutbacks now, but build trust and invest in people and their employment.”