Dutch central bank chief sees more government cuts ahead

klaas knotThe president of the Dutch central bank has warned in an interview with the Telegraaf that the government may be forced to impose a new round of spending cuts.

Klaas Knot told the paper that if the structural budget deficit rises, ‘politicians will have to look critically at government spending again’. The central bank has estimated the budget deficit will reach 2.2% in both 2016 and 2017. Under eurozone rules, the deficit may not exceed 3%.

If the deficit increases any more, ministers will have to take steps to make sure they are on a ‘sustainable path’, he said. The paper said this implied that it is extremely unlikely that the cabinet will be unable to avoid further cuts.

Knot would not go into details about the size of any future cuts but said the government would need to build up a buffer.

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