Herb Prooy: Budget in the balance

The cabinet is not tackling the country’s real problems, writes Herb Prooy

It’s only sixteen months since the cabinet announced it would ‘do whatever it takes to solve the problems and create jobs along the way’. Those were confidence-inspiring words, after the namby pamby years of four cabinets under Balkenende.
For Rutte and company, government financial health is the prime goal. They decided on an 18bn cutback package which would lead to a balanced budget in 2015. The cabinet based its calculations on the CPB’s projected average growth figure of 1.25% until then.
We now know that this figure was far too optimistic. According to Dutch National Bank boss Klaas Knot, we are in ‘a mild recession’. Growth has turned into its opposite and it doesn’t look as if a turn-around will be coming any time soon. This has lead to not-so-mild extra cutbacks to the tune of €16bn.
The people who made this cabinet possible have been discussing ways of finding this money for over a month now. They have to because otherwise we will be faced with a budget deficit of 4.6% next year while the European norm is 3%. It looks as if the restrictions this cabinet is under will make the task virtually impossible. But what if they do find the missing billions?
It seems nobody remembers that balanced budget in 2015. Has the cabinet discarded it? The CPB hasn’t told us yet how many billions more we will have to find after 2013 to achieve that particular goal.
Real problems
The cabinet must know, however. But it must have realised that it would be politically impossible to achieve a balanced budget in 2015 without implementing the necessary economic reforms.
Calling it a day would lead to a loss of face for the cabinet and the polls aren’t looking too good either. And that is why they are trudging on, slashing and burning left and right to get to the 3% norm instead of tackling the real problems this country is facing.
Herb Prooy is an entrepreneur in the field of ‘software as a service’

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