Dutch Premier Rutte Says Budget Cuts Needed to Avoid EU Fine

Dutch Prime Minister Mark Rutte said the Netherlands risks a fine of as much as 1.2 billion euros ($1.62 billion) if it doesn’t cut the 2014 budget by 6 billion euros.

“We need to be very, very cautious about doing less” as the risk of a fine by the European Commission is unacceptable, Rutte said in Parliament in The Hague today. “It is in our own interest to not diverge from this, also because we think this is needed.”

The Netherlands is in its third recession since the global financial crisis started in 2008 and has been in breach of the European Union’s deficit limit of 3 percent of gross domestic product since then. The budget shortfall will widen to 3.3 percent of GDP in 2014 from an expected 3.2 percent this year even after the government introduced the additional austerity package of 6 billion euros, its planning agency said Sept. 15.

Rutte’s plan for additional spending cuts and tax increases, presented Sept. 17, comes on top of a four-year, 16 billion-euro package his coalition with the Labor Party approved late last year. Of this, 3.5 billion euros were already penciled in to take effect in 2014.

Before it's here, it's on the Bloomberg Terminal.