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Netherlands: 2011 Budget Proposals Include Some Austerity Measures

(Sept. 23, 2010) The Netherlands' 2011 draft budget was presented to the Lower House of Parliament on September 21, 2010. According to THE WALL STREET JOURNAL, the caretaker government's plan introduces “modest budget cuts to fix public finances” next year, but “will likely be superseded by a more austere package once a new government emerges.” (Maarten van Tartwijk, Dutch Government Presents Modest Cuts, THE WALL STREET JOURNAL (Sept. 21, 2010),
.) THE LOS ANGELES TIMES characterized the proposal as “an austere annual budget … that slashes government jobs, spending on immigrants, and tax breaks for families – a foretaste of more far-reaching cuts likely to come under the conservative Cabinet now being formed.” (Toby Sterling, Dutch Government Presents Budget Cutting Jobs and Social Benefits; More Austerity to Come, LATIMES.COM (Sept. 21, 2010),,0,6555078,print.stor

Under the draft plan, government spending will be cut by €1.8 billion (about $2.35 billion) in 2011, and annual outlays would be reduced by €3.2 billion from the 2010 level by 2015. Entitlement programs, such as child and health-care benefits and funds to integrate immigrants (e.g., through language and citizenship classes) would be cut by the measures, civil servants would face a salary freeze, and 4,000 government jobs would be eliminated. The cuts are designed “to bring the public-sector deficit within reach of the euro-zone limit of 3% of gross domestic product by 2013″ (van Tartwijk, supra). Although labor unions and employers' associations have voluntarily agreed to raise the national retirement age to 66 in 2020 and 67 in 2025 from the current 65, the incoming government would reportedly like to see those increases instituted more quickly (Sterling, supra).