Budget: cabinet in panic, say economists

The government is over-estimating the long-term effect of the economic crisis, according to a number of top economists in Tuesday’s NRC.

The gloomy picture painted by the government is unnecessary, but at the same time, ministers are putting off making difficult choices, the paper quotes economists as saying.
‘If the aim of the panic is to protect essentials, then that is a good thing, but I have to be convinced,’ public finance professor Harry Verbon told the paper.
The cabinet’s plans to allow senior civil servants to look at ways to cut spending in some policy areas by up to 20% are ‘completely unnecessary’, the Tilburg University professor said.
The economic crisis has led to state debt of €100 per person per year and that is not an amount to have sleepless nights over, he told the paper.
‘This is the most boring budget I have ever seen,’ said Erasmus University professor Bas Jacobs.
There are some measures the cabinet could take now, such as reforming the redundancy system and reducing the cost of employing staff. The introduction of part-time unemployment benefit earlier this year has only hidden the true jobless rate, he told the paper.
And Sweder van Wijnbergen, professor at Amsterdam University, said the budget was a testament to the cabinet’s poverty of ideas. ‘The cabinet is in panic, has no idea what to do and is buying time by hiding behind commissions and big stories about 2015.’

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