Reactions On The Dutch Debt Crisis

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The economic recovery for the Netherlands is not happening yet and therefore the deficit for the Netherlands remains far too high. Next year, the deficit is 3.9 percent. That was announced the Central Planning Bureau (CPB) and the Central Bureau of Statistics (CBS) on Wednesday. What are the political reactions?

The government accepts that the Netherlands will not meet the European standard of three percent next year. But there will be no more than 6 billion cut, said Jeroen Dijsselbloem Minister of Finance on Wednesday in response to the new estimates from the CPB.

Also Labour MP Henk Nijboer said Wednesday that it is not desirable for the Labour Party to cut more than the 6 billion euro which was agreed upon. Coalition partner VVD is on the same line. "We are sticking to the 6 billion cut. "Brussels has said that we need to do that and so we will," said VVD MP Helma Nepperus.

The figures of the CBS and CPB on the Dutch economy are not surprising, but still disappointing, because you hope that the economy recovers quicker," Minister Dijsselbloem said. "One of the main problems of the Netherlands is the housing market. That problem really inhibits the recovery," said the minister. "The issue also has a great negative effect on consumer confidence."

Dijsselbloem: Stimulus package

Dijsselbloem says that the government will on Budget Day come up with a stimulus package and new measures to pull the housing market loose.

The stimulus package is not about billions of the government, because there are no billions available, said Dijsselbloem. The government wants, by new tax measures, to stimulate pension funds and people to invest their capital in the Netherlands.

"There is money available that is invested abroad, or not at all. That money we need. We do that in the Netherlands a lot, we are good in saving and put money in jars. If we can free this money by changing the tax treatment, then this money can be a great boost to the economy."

Investment Package Asscher

The government will on Budget Day come with an investment package to combat rising unemployment. Deputy Prime Minister and Minister of Social Affairs and Employment Lodewijk Asscher said this on Wednesday in response to figures of the CBS and CPB.

Asscher is awaiting the first employment schemes from different economic sectors, for which he has an amount available of 600 million to co-finance the plans. Asscher said to hope for a quick plan from the construction industry.

The government wants to keep the people working as much as possible, otherwise transfer to another job and also they want to decrease the youth unemployment by creating new jobs for young people.

Economic recovery

"The impact of the recession continues. Fortunately, the CPB and CBS also see that this year and next their will be some recovery. But it is still a raw deal for people who lose their jobs. Work should be the main priority for the Netherlands and for the government. We need to see this issue addressed in the budget with an investment package," says Asscher.

He hopes that the Netherlands can join the prosperous economic recovery in Germany. "We know that ultimately, the Netherlands will share these benefits through exports, but we also know that it might take some time."

Comments economists

That the Dutch economy is performing as one of the worst of the eurozone, is largely due to improper government policy. So say economists on Wednesday in response to the new estimates from the CBS and the CPB.

Sweder van Wijnbergen, professor of economics at the University of Amsterdam: "The government is doing everything to slow the growth. They do nothing about the brake that banks impose on the economy, they wage war against the housing corporations and self-employed and they create panic by all kind of short term cutting tricks and on top of that, they have no plan for employment. This keeps the unemployment rise and consumer spending low."

Professor of financial economics Sylvester Eijffinger shares this view. "The government is focused on the short term, but not on the large files. They should comply with the structural reforms in the housing market, the labor market and the pension sector," says the economist. "People are not offered any perspective, which can restore confidence."

Van Wijnbergen indicates that the Netherlands is a trading nation which always lags behind countries like Germany and the United States. Economic growth there is an important driver of our economy. Now, however, we are waiting very long until the situation improves in the Netherlands, says the professor.