The Dutch government plans additional austerity measures totaling 4.3 billion euros ($5.6 billion) next year in a bid to narrow the budget deficit to within European Union limits, Prime Minister Mark Rutte said.
“We need the additional measures in 2014 to get the government finances in order,” Rutte told a news conference today in The Hague. The budget cuts would come on top of a 16 billion-euro austerity package over the next four years. “I’m optimistic; the end goal is to tackle the problems we have in the Netherlands,” Rutte said.
The government plans to freeze salaries for one year for civil servants and health-care workers, saving 2 billion euros, according to a statement from the Finance Ministry today. A tax break worth 640 million euros for companies will be scrapped. The measures should cut the deficit by 0.4 percentage point, bringing it within the EU’s limit of 3 percent of gross domestic product in 2014, it said.
The Netherlands, the euro region’s fifth-largest economy, has been in breach of the EU limit since 2009. The deficit will hit 3.3 percent of GDP in 2013 and would climb to 3.4 percent in 2014 without the additional budget measures, the government’s planning agency, CPB, said yesterday. The European Commission was more pessimistic in its forecast for the Netherlands on Feb. 22, predicting a deficit of 3.6 percent.
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