Economists Give Cabinet a Thumping Failure Mark
THE HAGUE, 05/11/13 - Economists say virtually unanimously that the cabinet has fallen short of success in formulating sensible plans and also in carrying them out subsequently, according to a poll carried out by Het Financieele Dagblad newspaper among 13 leading Dutch economists.
This Tuesday, the cabinet celebrates its first birthday. On average, it is given a report figure of 4.6 by the economists. Premier Mark Rutte is even more poorly rated. He is given a 3.6 for his actions in the past 12 months.
"I have the impression that Rutte does not have much grasp of the current economic situation,” says professor Bas Jacobs of Erasmus University. The survey was in principle anonymous, but Jacobs is among a handful prepared to be quoted for their expositions.
According to ING’s chief economist Maarten Leen, mortgage interest deductibility should not have been abolished for new cases. This ensured that the flow-through on he housing market was blocked because no more first-time buyers materialised. Thus, the ‘moving-house carrousel’ so important for the economy was halted and this affected the entire sector involved with home furnishings and renovations.
Half of the economists polled agreed with Leen that the housing market is the biggest problem with which the cabinet is wrestling. Second comes the cabinet itself. It reforms too little, according to the survey.
Politicians are so busy creating consensus that they simply do too little to make future policy. This is to a significant degree because the coalition is governing without a majority in the Upper House – a blunder, according to many of the economists.
The economists are divided on the question of what the most desirable solution is to give the economy a push. Most believe that it is necessary to reduce taxes to boost purchasing power.
Some say that Brussels must drop the 3 percent of GDP budget deficit ceiling. Others again indicate that lower axes could be financed by gradually abolishing mortgage interest deductibility completely.