PM presents 'balanced' economic package

Wednesday 25 March 2009

Prime minister Jan Peter Balkenende presented a package of measures to parliament on Wednesday which the government hopes will stimulate the economy in the short term while reducing the budget deficit from 2011.

But the situation surrounding plans to increase the state pension age from 65 to 67 remain confused.

The deal is the result of almost four weeks of talks between senior ministers and the leaders of the three government parties - the Christian Democrats, Labour (PvdA) and ChristenUnie. On Tuesday night, unions and employer organisations also voted in with the plans.

Everyone involved

The agreement is both necessary and well-balanced, the prime minister said. Everyone would have to contribute because 'only together will we have the strength to climb up again,' he told a packed parliamentary chamber.

In total, the cabinet is planning to spend €6bn on investments and other measures to boost the economy, with a further €1.5bn coming from provincial and local government, Balkenende said.

In order to keep people in jobs, the government will introduce part-time unemployment benefit and there will be a special focus on youth employment.

Insulating homes

Extra cash will be made available for insulation in homes and schools and to build new hospitals and schools, Balkenende said. Planning procedures will also be made faster for the duration of the crisis.

The controversial tax on flying introduced last July will also be scrapped.

In order to pay for the extra investments, the government will also take steps to reduce the budget deficit by 0.5% a year from 2011. These measures will be 'tough' and will be 'organised by law', the prime minister said, without giving many details.

Pension confusion

In particular, agreement has been reached on increasing the state pension age from 65 to 67, the prime minister said. Home owners whose property is valued at more than €1bn will also have to pay higher taxes and there will be tougher controls on health spending.

Agnes Jongerius, leader of the FNV trade union federation, had said earlier that the increase would not go ahead. Ministers had given the unions until October 1 to come up with an alternative, she told reporters.

After Balkenende's speech, Femke Halsema, leader of the left-wing green party GroenLinks said it was completely unclear what the situation surrounding the state pension is.

MPs will debate the package of measures on Thursday.

More on this
Confusion over pension age increase
Opposition furious at 'undemocratic' plan

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