Council Opinion of 22 January 2002 on the updated stability programme of the Netherlands, 2000-2004
Date: 2002-01-22
Institutions: Council of the European Union
Subjects: Economic and Monetary Union, Netherlands, economic policy, economic stabilisation, gross domestic product

6.2.2002

EN

Official Journal of the European Communities

C 33/3

COUNCIL OPINION

of 22 January 2002

on the updated stability programme of the Netherlands, 2000-2004

(2002/C 33/03)

The Council notes that for 2003 and 2004, which are beyond
the term of office of the present government, the budgetary
estimates in the updated programme are technical projections
based on a cautious macroeconomic scenario under
the
assumption of unchanged policy.

surplus

is projected for 2002;

The Council notes that despite the economic slowdown, a
general government
the
Council expects that surpluses will continue to be projected
for the remaining years of the programme implying that they
will be in line with the stability and growth pact objective of a
fiscal position close to balance or in surplus;
the Council
considers that the progress already made by the Netherlands
in improving the general government budgetary position
provides
to cope with the
budgetary impact of normal macroeconomic fluctuations
without breaching the 3 % of GDP deficit threshold.

adequate margin in order

implementation of overall

The Council notes the modification in the 2002 budget,
in
favour of debt reduction, of the fifty-fifty rule of allocation
of additional revenues to debt reduction and tax alleviation.
It acknowledges that this was done in order to comply with
the Council recommendation of March 2001 as well as with
the broad economic policy guidelines, but also in view to
strengthen the budgetary position and better prepare for the
consequences of the ageing population. The Council notes that
the
targets made
possible increased goverment spending in priority areas and
reduction in the tax burden, while respecting the requirements
of the stability and growth pact. The Council welcomes the
growth pact. The Council welcomes the structural reforms
efficiency of
underway, which aim at
government
care,
health
education and social infrastructure, as well as increasing the
participation rate and competitiveness which should reduce the
tightness of the labour markets and help to moderate wage
pressures.

improving
particular

expenditure

expenditure

the
in

in

The Council welcomes the clear strategy for improving the
sustainability of public finances and meeting the consequences
of population ageing; it encourages the gvernment to maintain
the effort
towards reducing the debt ratio and improving
labour supply and employment rate in order to achieve these
objectives.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July
1997 on the strengthening of the surveillance of budgetary
positions and coordination of economic policies (1), and in
particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 22 January 2002 the Council examined the updated
the period
stability programme for Austria which covers
2000-2004.

Real GDP growth decelerated sharply in 2001 to about 1 %
the deterioration in the general
from 3,5 % in 2000;
government balance, although significant, but partly due to
the implementation of
the tax reform as from 1 January
2001, was less dramatic, the surplus falling from 1,5 % to an
estimated 0,7 % of GDP; besides the contribution of
these
surpluses, the government debt ratio continued to decrease
due to developments in nominal GDP.

The Council notes that, since the presentation of the 2001
updated stability programme on 17 October 2001, the macro-
economic projections
for 2001 and 2002 have been
significantly revised downwards by the Netherlands Bureau
for Economic Policy Analysis,
in order to take into account
the full impact of the international economic downturn and
the estimated effects of the 11 September events. The Dutch
authorities, acknowledging the economic slowdown and its
impact on budgetary conditions, have presented revised
figures reflecting the latest information (December) available
resulting in budgetary surpluses of
on economic growth,
0,7 % of GDP in 2001 and 0,4 % in 2002.

(1) OJ L 209, 2.8.1997.