Dutch Cabinet gathering for first budget meeting

Will the government make cutbacks, and if so, to what exactly? These questions will be discussed when Prime Minister Dick Schoof receives his Cabinet members in the Catshuis, the Prime Minister’s official residence in The Hague, on Wednesday for the first budget council. Negotiations will then begin on the budget statement the Cabinet will present on Budget Day. The budget deficit will remain below the limit agreed in Europe in 2025, but according to the Bureau for Economic Policy Analysis (CPB), it is getting closer and closer.

The deficit will increase to 2.6 percent of the economy (gross domestic product) next year, the CPB said on Friday. That forecast is more favorable than the 2.8 percent that the number crunchers had previously expected but is still close to the 3 percent limit agreed upon in Europe.

Schoof is “not negative” about the figures but says he is “not doing a little dance” either. The Prime Minister agrees with the CPB’s finding that “income and expenditure are not in balance with each other” and acknowledges that adjustments are necessary in the long term. The talks will have to show how quickly the government wants to start those adjustments.

In any case, the figures are reason for Finance Minister Eelco Heinen to switch to frugal mode. He is not making any money available for new policy. He does not want to anticipate cutbacks yet, although he does not rule them out. The Minister also consistently points to the agreements made about this in the PVV, VVD, NSC, and BBB’s coalition agreement. It states that the Cabinet will first look at cutbacks if the budget deficit threatens to exceed the limit agreed in Europe.

Moreover, additional expenditures must be “covered,” Heinen said last week before the start of the Council of Ministers. He is referring to several financial setbacks that together add up to billions. For example, the Cabinet must pay back money after the court ruling on Box 3, the sale of the German branch of State-owned TenneT failed, and parents affected by the benefits scandal will receive more compensation.

Schoof predicts budget discussion between the Ministers that will be “quite tough.” Education Minister Eppo Bruins has already stated that “there is not much to be gained” at his department, also because cuts are already being made here. Defense Minister Ruben Brekelmans wants to hold on to the investments in defense so that the Netherlands adheres to the agreements in the military alliance NATO.