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Budgetary Policy

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Submitted By dhanaprabhuxl
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Budgetary policy 2011-2015
Budgetary policy refers to government attempts to run a budget in equilibrium or in surplus. The aim is to reduce the public debt.
The Rutte government made agreements on public finances in the coalition agreement and the 2010 parliamentary support agreement. The main financial agreements are to reduce the budget deficit and cut public spending. • Additional measures public finances • Measures to restore public finances

Need for measures

The global financial and economic crisis that commenced in 2008 has hit the Netherlands hard and public finances have deteriorated badly. To overcome the crisis and cushion the worst blows, the economy is being stimulated to keep people in work and investments are being made in business. Public spending has accordingly increased but tax revenue has fallen sharply.
The crisis has led to a serious budget deficit and a sharp jump in the national debt. The gap in public finances will not go away by itself. The public debt will continue to rise as long as there is a budget deficit, as will the interest the government has to pay on the debt every year. Public finances in the Netherlands will be untenable without drastic measures. Furthermore, without robust public finances the Netherlands will lose the confidence of the financial markets.
At the beginning of its term of office (October 2010), the Rutte government proposed a package of measures of €18 billion in total. As a result of the disappointing economic development the budgetary deficit is decreasing more slowly than expected. That is the reason why the outgoing government has reached an additional package of measures in cooperation with 5 parties in the Lower House of Parliament (D66, GroenLinks, ChristenUnie, VVD and CDA) in order to get the state budget of the Netherlands in order. The budgetary deficit will be cut back with the

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