The Council of State (RvS) has been critical of the Spring Memorandum, the interim adjustment of the budget, presented by Finance Minister Sigrid Kaag (D66) at the end of April. According to the advisory body, the document ‘only partially’ complies with European and national fiscal rules. Holes in the budget are also closed with “unmotivated and untargeted cuts”. That appears from a report that the Council of State published on Monday.
The Council says it understands the government’s challenge to cut spending and also says it sees steps being taken in this regard in the Spring Memorandum. But at the same time, the cabinet is “steering close to the guardrail” by pursuing an “expansive fiscal policy”, with expenditure growing and income shrinking. Moreover, the explanation in the Spring Memorandum is “very technical” and lacks a total overview of how the government intends to cover the expenditure. The Council also sees no reasons for terminating a specific policy.
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According to the Council of State, the Spring Memorandum offers “no buffers for economic setbacks”, while recent crises show that Dutch public finances are “very sensitive to an economic turnaround”. Rising asylum costs and interest charges on the national debt in particular create setbacks that must be cushioned, the report says.
It is the first time in years that the government has had to cut spending. According to the advisory body, the cabinet is mainly busy buying time before taking real measures. This is not because the cabinet had to get used to cutbacks, but is mainly due to the hasty process. The Council warns against ‘stay of execution’.