Dutch budget deficit drops to 2.9%; prime minister says don’t cheer too soon

Prime minister Mark Rutte said on Friday afternoon it is too soon to cheer about the news the Dutch budget deficit has fallen to 2.9%.

 

 

‘This is purely bookkeeping and does not alter the need to make spending cuts,’ the Telegraaf reports Rutte as saying. ‘Let us not congratulate ourselves just yet.’

 

The 2.9% figure, which is below the EU limit of 3%, was published by the central statistics office CBS on Friday morning. The CBS said the improvement was mainly thanks to a windfall from the auction of telecom networks.

 

The government currently has a budget surplus of €4.5bn, the first time it has been in credit since the fourth quarter of 2008.

SNS Reaal

 

The nationalisation of financial services group SNS Reaal also had a small effect on bringing down the deficit, the CBS said. Nationalising the group cost the government €3.7bn, with a further €6bn in loans.

Because the value of SNS Reaal is higher than the nationalisation price and the capital brings in a decent return, under EU monetary rules this makes the group an investment rather than a liability.

 

It is not expected that the fall in the budget deficit will affect the forecast of an above 3% deficit for 2014 or the €6bn extra in spending cuts the government is currently trying to find.