Doing Business in the Netherlands 2012 - American Chamber of ...

Moreover, its financial services industry is disproportionately large
and has suffered heavy losses since the downturn started.
2012 Budget Memorandum
The Budget Memorandum 2012 ((Miljoenennota) focuses on -- in line
with the coalition agreement -- restoring financial stability, improving
public finances, strengthening the ability of the economy to grow and
the ambition of a more compact government.
Public finances in the Netherlands are slowly recovering from the
crisis, but have not stabilized yet. In 2012, the budget deficit (EMU
balance) is expected to be EUR18 billion, expressed in a percentage of
the economy that results in a deficit of 2.9 percent of Gross Domestic
Product (GDP). This means that in 2012, for the first time since the
crisis started, the Netherlands would meet the important 3 percent
requirement of the Stability and Growth Pact, the European standard
for healthy public finances. At the same time, there are major
uncertainties and because of the lower economic prognoses, the
budget deficit will shrink less than intended at the end of 2010 on the
basis of the coalition agreement. The budget policy of the government
aims at keeping a steady course even if the economy faces a
headwind. Extra measures are only needed when the budget deficit
gets below the allowed margin by more than 1 percent (warning
margin). However, that is not the case. Therefore, no extra cost
cutting, on top of the EUR18 billion cost-cutting package, is included
in this Budget Memorandum.
Debt and Interest
Public debt (EMU debt) is expected to amount in 2012 to EUR407
billion, or 65.3 percent of the GDP. That is an increase of 0.6
percentage point compared to the most recent estimate for 2011. In
order to finance the debt, the 2012 budget has a budget item of
EUR10.4 billion for interest expenses.
16 Baker & McKenzie