The Dutch government deficit according to the EMU definition was 2.3 percent in 2004, once again within the limits of the European norm of 3 percent. In 2003 the deficit was still 3.2 percent. Central government accounted for most of the decrease in the deficit. The government debt according to the EMU definition was 55.2 percent of GDP, according to provisional figures from Statistics Netherlands.
Deficit of central government drops
The total government deficit in the Netherlands was 10.7 billion euro in 2004. Most of this – 8.4 billion euro – was accounted for by central government. In 2003 central government deficit was still as high as 13.4 billion euro. The substantial fall was mainly caused by higher tax revenues, while spending was also down slightly. Local government had a deficit of 2.8 billion euro in 2004. This is still relatively high, as a result of high investment and stagnating land sales. The social funds had a slight surplus of 0.5 billion euro, fractionally more than in 2003.
EMU debt increases further
After years of decrease, the EMU debt rose for the second year in a row in 2004. It grew by 10.8 billion euro last year, about the same amount as the government deficit in that year. The deficit was mainly financed by the emission of government bonds. Net long-term debts increased, short-term debts decreased. The increase in the government debt was tempered slightly by sales of government shares in telecom company KPN.
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