Brussels, 11/06/2013 (Agence Europe) - “It is essential that the Netherlands make a structural effort of at least 1% in 2014, equal to €6 billion”, said Economic Affairs Commissioner Olli Rehn on Tuesday 11 June in a debate at the Dutch parliament.
If this is done and there is an unexpected deterioration in the economic situation, then the European Commission might consider extending the timing for achieving the budget targets in structural terms, he said, noting that “today it is premature to talk about further decisions”. Rehn said he was “aware of the forecasts of the central bank, and other forecasts on Friday” of a deficit of 3.9% of GDP in 2014, but said “EU economic governance cannot be an exact science, work on basis of the spring forecasts based on the hard data of Eurostat and a multitude of soft data, then we will make an assessment in the light of that forecast”.
Forecasting a public deficit in the Netherlands of 3.6% of GDP in 2013 and the same in 2014 ceteris paribus, the Commission recommends that the country be given an extra year, until 2014, to bring its excessive deficit down to 2.8% of GDP. Amsterdam has until 1 October to unveil the measures it is planning to achieve this. Commissioner Rehn said that 2.8% had been set as the target to leave a safety margin below the 3% cut-off point. He said there were problems on the housing market, where “imbalances and rigidity continue to have negative effect on the economy, tax incentive for ownership”, and the labour market could be made more efficient.
In response to criticisms from Dutch parliamentarians about his department's decision to give some countries, France for example, two extra years (rather than one, like the Netherlands), the Commissioner said that the “breathing space should be used for structural reforms” and the rules were the same for everyone. He said that, despite the relative calm on the markets recently, there was “no time for complacency”. He said it would be good to use a series of social indicators when preparing economic policies, with tackling youth unemployment a top priority. (EL/transl.fl)