Kaag: we no longer have the financial buffers from before corona

The government will continue to monitor purchasing power developments, but cannot promise that it can offer further compensation if prices continue to rise. The financial buffers that the Netherlands had built up in the years before the corona crisis are no longer there, warns the Minister of Finance and Deputy Prime Minister Sigrid Kaag after the weekly Council of Ministers.

The cabinet has earmarked 2.8 billion euros to ease the worst pain of the sharply increased energy and fuel prices. The poorest families can therefore receive an extra energy allowance so that they can continue to pay their fixed costs. In addition, the excise duties on petrol and diesel and the VAT rate on gas and electricity will be reduced.

These measures are financed from the additional income that the government expects from gas extraction. A pot is also used that was actually intended to dampen the consequences of Brexit. As a result, the national debt does not have to increase further. Economists have warned that it would be unwise to borrow extra money to repair purchasing power.