Dutch Parliament Backs Government on 2013 Budget-Deficit Target

The Dutch government won support from a majority in parliament to keep the budget deficit below 3 percent of gross domestic product next year, even amid signs the economy is worsening.

Both the Liberal party of Prime Minister Mark Rutte and their Labor coalition partner want the government to maintain the deficit target because the costs can’t be passed on to future generations, Liberal lawmaker Mark Harbers and Labor lawmaker Henk Nijboer said in parliament in The Hague today. Decisions on further budget cuts by the government to meet the target can be made at the beginning of 2013, Nijboer said.

The deficit will be 3.3 percent of GDP in 2013, after a shortfall of 3.8 percent in 2012, the Central Planning Agency, known as CPB, said in economic forecasts released yesterday. That would exceed the European Union’s 3 percent limit and is wider than the 2.7 percent for next year the agency predicted on Sept. 18. CPB said the economy will contract 0.5 percent in 2013 after shrinking 1 percent this year.

Finance Minister Jeroen Dijsselbloem has said he doesn’t rule out additional budget reductions. The coalition, sworn in on Nov. 5, is planning cuts of about 16 billion euros ($21 billion) in the next four years.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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