Hoekstra: No spending cuts to cover lost Groningen gas income

The government will not have to make any extra budget cuts to cover the losses incurred by reduced gas production in Groningen, finance minister Wopke Hoekstra said on Monday.

In his spring budget statement, Hoekstra said extra income from other parts of the economy, such as an underspend of €350 million on public health, would offset the effect of scaling back gas production for the time being.

The estimated cost to the state between now and 2022 is expected to amount to €1.1 billion, comprising €900 million in lost revenues and €200 million of extra investment in Groningen province.

The current government’s coalition agreement states that any lost income from the gas fields must be compensated for by savings in the public sector rather than by increasing borrowing. But Hoekstra said that the healthy state of the economy meant spending cuts were not necessary at present.

Economic affairs minister Eric Wiebes is currently negotiating with Shell and Exxon, the owners of the joint-venture company NAM which is responsible for gas production, to decide who should pay for the extra investment in Groningen.