27 August 2013

Nasdaq: Dutch budget deal to impose more austerity despite resistance

The Dutch government reached a deal on an austerity package for 2014 in a bid to meet European Union budget requirements, despite fierce resistance to more belt-tightening at home and concerns that it could further harm the already struggling economy

The coalition government struck a deal on €6 billion ($8 billion) in tax increases and spending cuts, Finance Minister Jeroen Dijsselbloem said on Tuesday. "I'm satisfied that we have already reached a deal now", he said, adding that details of the package will be given on September 17, when the government will present the 2014 budget.

The government, one of the main allies in Germany's call for austerity, entered negotiations on new budget cuts in June against a backdrop of growing resistance to more austerity.

The Netherlands is stuck in a severe economic crisis and was among the few eurozone economies to contract in the second quarter. Economists blame the slump on the country's troubled housing market, which, in combination with high mortgage-debt levels, has led to a sharp drop in domestic consumption.

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