27 mrt 2024 om 10:30
How much financial space will PVV, VVD, NSC and BBB have for their plans? The wishes vary, but there is hardly any money. “All signals for the medium term are red.”
On Tuesday, the House of Representatives was updated by experts on economic prospects and budget policy. The general picture is that the economy is doing reasonably well after a turbulent period with sky-high inflation. “A soft landing,” Olaf Sleijpen of De Nederlandsche Bank (DNB) called it in Parliament on Tuesday.
At first glance, Diederik Dicou of the Central Planning Bureau (CPB) also had a positive message for parliamentarians: “Many households will see a recovery in purchasing power this year.”
Public finances also show a “sunny picture”, Dicou said. “The debt position is excellent and you don’t have to worry about the budget balance.”
So much for the positive noise. Because although the previous (current outgoing) cabinet has left the housekeeping book in good order, expenditure has also been significantly increased, Dicou warned. “All signals for the medium term are red. It is clear that the course must be changed.”
Sleijpen agreed with him. Without intervention, the deficit will increase to -4.6 percent in 2032. “That is higher than the European budget standard,” the DNB employee noted. “As a result, the Netherlands risks adjustment from Brussels.”
The Hague risks a slap on the fingers from Brussels
The party leaders of PVV, VVD, NSC and BBB also know this. They were visited by DNB President Klaas Knot during the formation discussions. Last week, outgoing Ministers of Finance Steven van Weyenberg and Marnix van Rij came by.
Last autumn, more than two months before the elections, the bill was already passed on to politicians. The Budget Space Study Group, a colorful group of civil servants and financial experts, had calculated that the next cabinet will have to find 17 billion euros in 2028. It does not stop there, because the costs for healthcare, aging and the climate will only continue to rise if no action is taken now.
This requires urgent action, otherwise Brussels will be slapped on the fingers. Clear agreements have been made within Europe about the level of the national debt (maximum 60 percent of GDP) and the budget deficit (maximum 3 percent).
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‘Not everything is possible at the same time, today’
The new cabinet must make tough political choices. Will government spending go down? Or will taxes go up? And if so, where? According to VVD leader Dilan Yesilgöz, it is “a fact” that major cuts need to be made, she said last weekend at WNL On Sunday. “Nothing is a fact,” Geert Wilders (PVV) responded directly via X. “It is true that the PVV wants tax relief for its citizens!”
A clear financial framework, as the previous informant Kim Putters advised, is not an unnecessary luxury given these divergent views. Even if the next cabinet must distance itself from the House of Representatives with the thinnest possible coalition agreement. “Finances are a large and important topic on the formation table,” noted Richard van Zwol, one of the two new informants, last Thursday.
When politicians come up with long wish lists, an old wisdom from former Prime Minister Willem Drees is often invoked: “Not everything is possible, and certainly not everything at the same time.” When asked about what is possible, Van Zwol made his own version of this: “Not everything is possible at the same time, today.” That will also be the message in the negotiations between PVV, VVD, NSC and BBB.
