Finance minister Wouter Bos took on his critics on his weblog on Monday evening following the 6.1% slide on the AEX blue chip index, calling their comments ‘negligent, inconsistent and opportunistic’.
Earlier on Monday Liberal (VVD) party leader Mark Rutte accused the cabinet of ‘sticking its head in the sand’ and called for tax cuts to give the economy a lift. The VVD always want tax cuts, but when they are in power they give with one hand and take away with the other,’ Bos wrote. ‘Their argument is opportunistic.’
Central bank president Nout Wellink’s remarks that it would not be ‘sensible’ for the cabinet to allow the budget deficit to take its course, contracted accepted treasury rules, Bos said.
The accepted rule that extra cutbacks are not immediately necessary during an economic downturn has always been supported by the central bank, economists and the VVD but they now want to ‘drop it like a hot potato’, Bos wrote.
Bos claimed support for his position from former VVD finance minister Gerrit Zalm, who drew up the rules. Zalm said last week that the Dutch economy would receive ‘a slight knock’ from the credit crisis in the US but that a recession was a long way off.
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