€6bn cuts package puts pressure on Dutch coalition

The centre-left coalition in the Netherlands has reached agreement on a new round of public spending cuts worth €6 billion aimed at keeping the country's budget deficit within EU guidelines next year – despite fierce public opposition to further austerity.

Details of the cuts will be published on budget day, September 17th, but there was widespread dismay yesterday when the social affairs minister, Lodewijk Asscher, warned publicly that the savings would affect "nine out of 10" Dutch families.

Families receiving state support, Mr Asscher revealed, would see payments reduced by 0.75 per cent on average, as part of “a rebalancing” of welfare payments in favour of working families, making income-dependent allowances account for a greater share of payments.

'All parents will feel it'
As a result, single parents living on welfare, for example, will have their payments cut by 4.5 per cent on average, while a single parent on the minimum wage could receive as much as 10 per cent more.

“All parents will feel it,” acknowledged Mr Asscher, who said those reforms alone would save about €810 million, a target which had been adjusted downwards because incomes had continued to fall over the summer as the country languishes in recession.

The deal was expected to include a blanket public sector pay freeze. However, yesterday it emerged teachers’ unions, involved in parallel talks on a national education accord, had negotiated a pay increase next year after a four-year freeze, in return for changes in work practices.

Political impact
The latest €6 billion round comes on top of €13 billion worth of cuts last year. Finding those cuts led to the collapse of prime minister Mark Rutte's Liberal-Christian Democrat minority coalition, when right-wing leader Geert Wilders withdrew his support over the impact of the savings.

The latest round of negotiations has put pressure on Mr Rutte’s new Lib-Lab coalition, which has seen two Labour MPs resign in the past two months. The latest, Myrthe Hilkens, said she was giving up politics to focus on “socially relevant issues”.

Mr Rutte had been hoping to build a broad political consensus behind the package, but the Greens and centre-left D66 found the cuts too politically difficult to stomach.

The same may be true of the electorate. Polls show just one in three voters wants the coalition to complete its term.