Budget Memorandum 2014: lower deficit – lower growth
In the Budget Memorandum 2014 the Dutch government sets out the public finances for 2013 and 2014, as well as its policy priorities. The main emphasis is on putting the treasury in order.
Alongside the previous deficit-reducing measures, the government has come up with a further EUR 6 billion in spending cuts and higher taxes and social insurance contributions. Nevertheless, public expenditure is still high and the deficit remains above the 3% limit. Meanwhile, the economy will shed a quarter percentage point of growth in 2014. But more growth will be lost: in the period 2015017, average growth will continue to be constrained by the same percentage.
While the outlook for the public finances appears to be improving now that economic growth is likely to move back into positive territory, this area remains vulnerable.
As the government does not have a majority in the Dutch Senate, the survival of the measures outlined in the EUR 6 billion package is open to question.