Budget cut talks to last two more weeks at least

Talks between the minority government and anti-immigration PVV are set to continue for a further two weeks at least, the Volkskrant said on Wednesday quoting sources close to the negotiations.

The cabinet – made up of the VVD Liberals and Christian Democrats – and alliance partner PVV are trying to find extra cash and savings totalling at least €9bn to reduce the budget deficit.
The talks started on March 5 and almost collapsed last week when PVV leader Geert Wilders apparently threatened to pull out.

Economic effects

Sources told the paper the three negotiating teams want the government’s macro-economic think-tank CPB to calculate the likely effect of their plans before going public. That will take at least five days, the paper says.
In particular, the CPB will look at the impact on spending power and economic growth as well as the budget deficit. That is set to reach 4.6% next year, but must be brought back to 3%, in line with eurozone monetary union rules.
Economists say the knock-on effect of the cuts will lead a further slow down in growth and spending, meaning the total package of savings may need to be as high as €16m to achieve the right effect.

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