No fast, painless solutions for economy, says finance minister

The cabinet wants to ensure the Dutch economy undergoes a ‘sustainable recovery’ with substance, finance minister Jeroen Dijsselbloem told parliament on Tuesday.

Outlining the state of the government’s finances, Dijsselbloem said the Netherlands is now back at the position it was held in 2007.

‘We have lost six years of growth,’ Dijsselbloem said. The wealth the Netherlands has built up since 2008 is beginning to take its toll, the minister said. The Netherlands has financed its wealth with debt.

Even though interest rates are low, the Netherlands is still paying €11bn a year in interest, making the €6bn austerity package unavoidable. ‘There are no fast, painless solutions,’ he said.

Growth

But despite the cuts, there is room for growth, he said. He emphasised the three spear points of government policy: sustainable growth, balanced government books and an even distribution of income.

One of the Netherlands’ strengths is that there is an equitable division of income, he said. This is why the cabinet thinks it important to help people on the lowest incomes.

And he stressed the Netherlands will again spend €55bn more next year than will come in to the treasury. This cannot continue indefinitely, Dijsselbloem said.

Spending power

He pointed out that education will be exempt from the next round of cuts.

The minister also had some good news; average spending power will fall by 0.25% next year, not 0.5% as stated earlier.

This is because of an agreement with the main civil service pension fund about new premiums for civil servants. However, some households – pensioners and single people in work – will be harder hit.