‘Ten billion extra in spending cuts in the middle of a new crisis is idiotic’

9 December 2011

‘Ten billion extra in spending cuts in the middle of a new crisis is idiotic’

Far from cutting a further ten billion from expenditure, the government should be stimulating the economy, argues SP Member of Parliament Ewout Irrgang. 'New cuts can push the Dutch economy over the brink and into recession and will make the Eurocrisis even worse,” he says.

Ewout IrrgangAccording to Irrgang, who is the SP’s parliamentary spokesman on financial affairs, new cuts are a very bad idea, and for numerous reasons. Much of Europe is already mired in recession as a consequence of the eurocrisis and the enormous cuts in expenditure in southern Europe to which they are linked. In northern Europe a renewed recession threatens. The Dutch economy shrunk during the third quarter, unemployment is rising and people are spending ever less.

“It’s possible a new recession has already begun”, says Irrgang, “and so we are going to hit some heavy weather. In addition, the Netherlands, together with Germany, is one of the few countries that can put the European economy back on track. We can’t expect this to come from southern Europe. So this cutting ten billion from spending is really an idiotic plan from the government. This is the way to make the eurocrisis even more hopeless. What’s more, I know that this right-wing cabinet has no more illusions than I do as to who will pay the bill for these new cuts.'

The SP Member of Parliament argues that the government must stimulate the economy instead of proposing further cuts in spending. “This would indeed lead to higher spending and thus to a bigger deficit. But ten billion in new cuts will shrink the economy of the Netherlands still further which will mean that the deficit expressed as a percentage of what we earn in total will increase. The government’s aim of achieving a balanced budget by 2015 will then, in this situation, be impossible.”

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