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10 March 2013

FT: Battle looms over Netherlands budget cuts


The Dutch prime minister will have to make compromises across his political agenda to secure the €4.3 billion austerity measures needed to keep the country's 2014 budget deficit within EU limits.

Leaders of two opposition parties said they would demand softer immigration policy, more money for education, and other changes from prime minister Mark Rutte for their support for more austerity. As elsewhere in Europe, anger over budget cuts and tax increases has severely weakened a centrist government that took office with a programme of sweeping economic reforms. 

The government, a coalition between Mr Rutte’s centre-right Liberals and the centre-left Labour party, lacks a majority in the senate. The upper house usually plays a cautious advisory role but opposition parties have threatened in the past two months to use it to block legislation.

The cabinet is seeking support for new austerity measures which Dutch forecasters say will be needed to keep the budget deficit below the EU limit of 3 per cent of gross domestic product in 2014. Mr Rutte could turn to other opposition parties, such as the Christian Democrats, but their leader said last week his price would be cancelling tax rises in favour of more spending cuts.

Full article (FT subscription required)



© Financial Times


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