Dutch aid to be slashed by one billion euros

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The Dutch conservative-Christian Democrat government and the Freedom Party agreed to slash development aid by one billion euros during Thursday’s negotiations on reducing the 2013 budget deficit to within EU limits.

Each year, the Dutch spend 4.6 billion euros on development aid. The one-billion euro cutback amounts to more than 20 percent of the total budget, reducing the Dutch contribution to less than 0.6 percent of the country’s gross domestic product. The United Nations norm is 0.7 percent.

To ensure the Dutch budget deficit remains under the European norm of 3 percent, the Dutch government would need to cut another 9.6 billion euros on top of earlier proposed 18 billion euros.

Christian Democrats’ aid norm no longer sacred
The plan to axe development aid to under the 0.6 percent limit is a particularly sensitive issue for the Christian Democrats (CDA), the smaller partner in the coalition government. Two ‘dissident’ CDA MPs, Kathleen Ferrier and Ad Koppejan, had voiced their concerns earlier about doing a deal with Geert Wilders’ far-right Freedom Party (PVV), which props up the minority coalition in parliament.

The support of the two Christian Democrat MPs is crucial for the stability of the government, all the more so since MP Hero Brinkman’s departure from the PVV last week because of the lack of democracy within the party. The two coalition partners and the PVV now hold 75 seats in the 150-seat parliament.

Last November, Development Cooperation Minister Ben Knapen gave assurances that the present cabinet would do everything within its power to keep development aid at or above the 0.7 percent limit.

The 0.7 percentage of gross domestic product is recommended by the global Organisation for Economic Cooperation and Development, which strives to improve the economic and social well-being of people around the world.

Cabinet fall speculation
The Conservative VVD – the largest coalition partner - and the CDA have been engaged in a round of negotiations for over three weeks with Geert Wilders’s PVV about the extra cutbacks. On Wednesday the talks were suspended and Dutch media speculated about the possible fall of the government.

The VVD and the CDA have been pressing not only for more massive cutbacks but also for systematic reforms. These are said to include reducing the generous tax breaks on mortgage interest payments, quickening the introduction of a higher pensionable age and raising some health insurance premiums.

Geert Wilders, in turn, repeatedly said he would not support these measures – which would break his electoral campaign promises – unless the development aid budget were cut drastically.

Bill Gates appealed to Dutch government
Last Friday, US billionaire Bill Gates tried to influence the talks on the development cooperation budget. He telephoned Dutch public broadcaster NOS on his own initiative to express his concern and said he feared that if the Dutch cut the aid budget to developing countries other countries will follow.

(jn/hs)

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