Sunday 17 October 2021

Opposition raises doubts about treasury windfall of €3bn

Opposition MPs have raised their doubts about a financial windfall amounting to €3bn revealed by finance minister Jeroen Dijsselbloem on Friday.

Christian Democrat MP Pieter Heerma described the windfall, which the minister said is derived from central bank guarantees, as ‘creative accounting’.

He and ChristenUnie MP Arie Slob have called on parliament to critically examine the minister’s claims. They want either a committee of experts or the national audit office to look into the origins of the windfall.

Dijsselbloem said the extra cash for the treasury will amount to €800m this year and €3bn over the entire cabinet period.

Technical

The windfall is derived from the profit the central bank makes on emergency loans to eurozone countries which are in trouble. The interest the bank earns on these loans was used to shore up its capital buffers because the loans are considered risky.

Now, however, the government has extended the central bank a guarantee of a maximum €5.7bn. This means the money earned on the loans can be paid to the state as profit instead.

The windfall was announced shortly after the government agreed a package of housing reforms with three opposition parties which will cost the cabinet some €1bn over the next four years.

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