The Netherlands is on the brink of a period of deep government budget cuts as the government aims to cut up to 20 percent in spending in some areas to cope with the global recession, Dutch media reported.
The government will unveil its 2010 budget on Tuesday, but the major figures leaked out on Friday with media reports saying flat economic growth and a budget deficit of 6.3 percent of Gross Domestic Product (GDP) are expected in 2010.
The leaks continued on Saturday, when a newspaper and a TV station said they got their hands on the budget documents, revealing the government was looking at drastic cuts to improve its finances. "We know one thing: after the crisis we will encounter stubborn problems, particularly the labour market and government finances. Doing nothing is no option, difficult choices will be unavoidable," Finance Minister Wouter Bos was quoted saying in the budget documents by commercial broadcaster RTL 4.
The Dutch cabinet believes 'fundamental political reconsiderations' are necessary and wants a broad social debate about how the Netherlands can emerge in 2020 "cleaner, smarter, stronger, more solid and with greater solidarity". It has become almost an annual event for the budget to be leaked to the Dutch media prior to its official publication, with RTL especially successful in obtaining draft documents.
The Netherlands is the eurozone's fifth-largest economy and heavily reliant on trade, with exports equivalent to 70 percent of GDP. That has made the global recession's impact especially hard. The economy has contracted for five straight quarters and the government pumped more than 31 billion euros into the system to either buy or shore up struggling banks and insurers in the past year.