Spending cuts of €35bn needed by 2015

Friday 28 August 2009

The government will need to make cuts of up to €35bn by 2015 to cover the shortfall in the treasury, the Volkskrant reports on Friday, without quoting sources.

The paper says the sum is equivalent to 20% of total annual government spending, or the entire education ministry's budget for one year.

Finance minister Wouter Bos and prime minister Jan Peter Balkenende have agreed that they will give a sneak preview of middle-term economic developments when they present next year's spending plans on September 15.

The paper says far-reaching reforms of the housing and labour market are 'no longer taboo'.

Spending power

The government has already agreed not to take steps to claw back extra spending on beating the recession until 2011. It also plans to raise the state pension age from 65 to 67.

Nevertheless, spending power is set to decline across the board next year, according to leaked figures from the government's macro economic forecasting agency CPB. Social affairs minister Piet Hein Donner said yesterday ministers had no plans to compensate families, without confirming the figures.

Ministers are expected to put the final touches to their budgets at today's cabinet meeting, the Volkskrant says.

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