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Dutch Cabinet returns to talks over spending cuts

 Netherlands' Prime Minister Mark Rutte arrives on his bike at the Prime Minister's Catshuis residence in The Hague, Netherlands, Thursday, March 29, ...

APTOPIX Netherlands Politics

Netherlands' Prime Minister Mark Rutte arrives on his bike at the Prime Minister's Catshuis residence in The Hague, Netherlands, Thursday, March 29, ...

The Dutch Cabinet returned to negotiations Thursday on new spending cuts to bring the budget deficit within European guidelines, a day after the government nearly collapsed amid a debate over austerity measures.
Prime Minister Mark Rutte and his key allies said a deal is now in sight as Central Bank President Klaas Knot urged them to quickly complete their talks, now in their fourth week.
"Whatever the political constellation may be, we need a credible package of spending cuts and reforms to win back the confidence of the financial markets," Knot told state broadcaster NOS.
Knot acknowledged the reforms need political support.
But "somehow a majority must be found to push these measures through, because the measures are unavoidable," he said.
The Dutch economy has long been considered one of Europe's strongest, with relatively low levels of national debt and a top AAA credit rating. But as a large exporter within Europe, with a big banking sector and high levels of personal debt, conditions have been steadily worsening.
The talks began after the Dutch economy went into a recession and forecasts showed the 2012 budget deficit will reach 4.6 percent _ well above Europe's 3 percent limit. Dutch politicians had strongly demanded that Greece and others meet that target.
Rutte's conservative minority Cabinet depends on the party of anti-Islam lawmaker Geert Wilders to reach a majority in parliament. Wilders broke off the talks Wednesday to decide whether he is prepared to defend spending cuts that are likely to target health care and retirement benefits.
Many of his voters, although social conservatives, are middle class or lower middle class, making them among the most likely to suffer from government spending cuts.
He has also cast himself as a euro-skeptic, voting against bailouts for Greece and demanding the Netherlands leave the shared euro currency _ making it difficult for him to appear to be supporting unpopular reforms in order to satisfy the European Union.
Finance Minister Jan Kees de Jager said European national budgets for 2013-2015 must be submitted to the European Union by April 30. He said the Dutch government will comply, including as many details of the budget cuts that are available at that moment, and an outline of other plans not finalized.
"Whether this will satisfy the demands of the Stability and Growth pact, and what any consequences (of an unsatisfactory plan) would be, is for the judgment of the European Commission," he said in a letter to parliament.
Some prominent economists, including the head of the government's own Central Plan Bureau, have advised against carrying out the cuts now despite the European rules, arguing they will damage the economy.

Updated : 2021-10-18 01:04 GMT+08:00