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Dutch Parliament Vote Points to More Cuts to Hold Deficit

Dec. 20 (Bloomberg) -- The Dutch government won support from a parliamentary majority to keep the budget deficit of gross domestic product below 3 percent next year, pointing to additional cuts in a shrinking economy.

Both Prime Minister Mark Rutte’s Liberal Party and his Labor coalition partner want 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 reiterated today that any decision on additional budget cuts will be made after new economic forecasts in February next year. The coalition, sworn in on Nov. 5, is planning cuts of about 16 billion euros ($21 billion) in the next four years.

The government got a “huge windfall” for next year as it will receive 3.8 billion euros following a frequency auction for telecommunications providers that was concluded last week, Dijsselbloem said.

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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