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Commission says Dutch face serious challenges on deficits

30 May 2012, 18:39 CET

(THE HAGUE) - The Netherlands faced a number of serious challenges in its attempts to steer the eurozone's fifth-largest economy below a European Union deficit target, the European Commission said Wednesday.

Presenting its report card to 27 European countries, the EU's executive arm said "the Netherlands continue to face a number of serious challenges in the short to medium term" in bringing its deficit in line.

Under pressure from Brussels to get its public deficit back to the EU limit of 3.0 percent of gross domestic product, five Dutch political parties hammered together a cut-backs package late last month, days after the Dutch government handed in its resignation.

The Netherlands aims to save 12.4 billion euros ($15.3 billion) in 2013 under the April 26 agreement, concluded four days after the Dutch ruling coalition threw in the towel over a collapse in austerity talks with its far-right parliamentary partner.

In its recommendation, the Commision on Wednesday said the Netherlands' most pressing challenges were in areas of fiscal consolidation, the long-term sustainability of public finances, especially pensions, the labour market, education and housing.

But it added: "Constrained by a highly complex political context, the Netherlands has only adopted a limited number of far-reaching policy initiatives."

It said "rigorously pursuing the budgetary strategy for 2012 and specifying the measures necessary to ensure the implementation of the 2013 budget with a view to timely correcting the excessive deficit, will be of paramount importance."

Reacting to the Commission report card Dutch Finance Minister Jan Kees de Jager said it has given the Dutch budget plan the green light, adding he believed it was "completely satisfactory" to the Commission.

"We must not stop at the 'green light', we have to follow through with the plan," the Dutch news agency ANP quoted him as saying.

The Commission's recommendations must now be discussed and approved by the next EU heads-of-state summit on June 29, before formally being approved by finance ministers in July.

2012 country-specific recommendations 
in the context of the 
European Semester - guide
Conclusion of 12 in-depth reviews - 
correcting macroeconomic imbalances
Excessive Deficit Procedure 
recommendations on Bulgaria, Germany
and Hungary - guide

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