Budget deal reached, but with elections looming, for how long?

The general election will take place on September 12. Then, just six days later, the 2013 budget – drawn up on Thursday by the outgoing government and its allies – will formally be presented to parliament. How does this add up?

The minority cabinet has officially collapsed and elections will be held in nearly five months time, after the summer break. In the meantime, the Netherlands needs a spending plan for 2013 – and one which meets Brussels rules.
Commentators all agree that the deal reached on austerity measures on Thursday between the minority government and an alliance of three small parties (D66, ChristenUnie and GroenLinks) will take the heat off the Netherlands – in terms of both Brussels and the financial markets.
However, this easing of pressure may well only be temporary, given a general election will take place just days before the budget is formally presented to parliament by the queen. This makes it unclear how many of the measures will actually come into effect and how many will have been shredded during the election campaign.

Financieele Dagblad

The Financieele Dagblad says the budget agreement was not only reached very quickly, but is a far-reaching one, especially given elections are looming in September.
It is an agreement which includes economic reforms that have been hanging over our heads for years, and will help the treasury far beyond 2013, the paper states.
In particular, GroenLinks leader Jolande Stap was brave to stick her neck out and say yes, and has been rewarded with several green and left-wing gains. However, her main challenge will be to translate this into electoral success in September.
And, the paper points out, if another coalition government emerges after the September vote, all these plans can be amended.
Jeroen de Boer writing on business website Z24, argues that the agreement might show daring, but is has become immediate fodder for the election campaign.
The five parties in the Kunduz coalition – so called because these five parties ensured there was majority support for the Netherlands’ continued involvement in Afghanistan – have done their best to reduce the budget deficit to below 3%. The Netherlands will meet European targets and has shown strength of character to the financial markets.
Nevertheless, everything depends on what happens in September, De Boer writes. Only if these five parties control a majority of the 150 seats after the election will there be majority support for this 2013 budget.
However, he points out, the longer it takes to form a new government after the election, the greater the likelihood the measures agreed this week will actually be put into practice. And in the meantime, the Netherlands has averted the risk of being punished by both the financial markets and Brussels.
Eric van de Walle points out on the NRC website that the opposition parties – Labour, the Socialists and the anti-immigration PVV – are already trying to create the impression that the agreement is only valid until the general election. As soon as that has taken place and a new batch of MPs are sworn in, the package will be fair game.
However, prime minister Mark Rutte has made it quite clear the austerity measures will remain current until there is a new government – which may take several months to form. It is the budget for 2013 and so many of the plans will be implemented, the prime minister assured parliament on Thursday.
Political scientist Philip van Praag told the Volkskrant he has doubts about this. ‘It is an agreement, so a letter can be sent to Brussels. You can say you want to increase the state pension age, but you then have to actually do this. And it remains to be seen if the same parties are in the coalition after the election.’
GroenLinks and D66 have played such a leading role in brokering the deal because they have an ‘enormous need and ambition’ to show that they can play a responsible role in government, Van Praag said.
By contrast, the PVV and Socialists can use the results – particularly the increase in the state pension age for their own benefit. Labour has also been influenced this. ‘Any concession leader Diederick Samsom makes now will make him very vulnerable in the campaign’.

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