Dutch to cut 4.3 bn euros in 2014 budget to hit EU deficit ceiling

The Netherlands' Liberal-Labour coalition government said Friday they had agreed to slash over four billion euros from the 2014 budget in the hope of driving down the deficit to Europe's three percent ceiling.

"We have agreed on a package of savings of 4.3 billion euros ($5.6 billion)," Liberal Prime Minister Mark Rutte told journalists after a cabinet meeting.

The announcement came the day after the Dutch Central Statistic Bureau (CBS) said the public deficit would be 3.3 percent this year and 3.4 percent in 2014, above the EU limit at a time when the Netherlands is seeking to set a good example to other eurozone members.

The deficit hit a high of 4 percent in 2012.

Rutte said Thursday's deficit predictions from the CBS were "a setback", but insisted no more cuts would be made from the 2013 budget.

"We will not make any more cuts in 2013 because the savings can only be made through taxes," Rutte said.

"We will take these measures in 2014, to strengthen public finance and respect the three percent" limit, he said.

The savings will be made largely through ending some tax breaks, cuts from ministerial budgets and some wage freezes.

The CBS also predicted Thursday that the Dutch economy would return to growth in 2014, increasing by 1.0 percent, after a contraction of 0.5 percent in 2013.