Dutch Central Bank: Cut Spending by €8 Billion

The Dutch Central Bank (DNB) cautioned the Netherlands to cut its spending by around €8 Billion, to prevent it from adding more deficits which might go beyond the European Union limits.

The DNB stressed that the deficit is expected to reach 3.5% of gross domestic product this year. The European Union rules state that countries with more than 3%, unmanageable deficits may have to face fines. The bank also said there will be an increase deficit of 3.9% in 2014 if the country will not slow down on its spending.

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Based on DNB's assessment, the economy will drop by 0.8% this year following the recession. However, there is a foreseeable growth by 0.5% in 2014 and 1.1% in 2015. Unemployment rate is also likely to increase, especially in the middle of next year.

The bank said that despite the existing struggles, there is still optimism from the structural perspective, in terms of tough competitiveness and high labor contribution rate by global standards.