New Dutch coalition unveils 16-billion-euro austerity drive

THE HAGUE – The Netherlands' new coalition government on Monday unveiled an austerity programme aimed at saving 16 billion euros by 2017, in a bid to cut the country's deficit.

"Between 2012 and 2017, we will again ask of the Dutch an effort of 16 billion more euros ($21 billion), which means 1,000 euros per Dutch resident," said Liberal VVD party head Mark Rutte at a press conference.

"It's necessary because our country is still living beyond its means," added Rutte, who is expected to stay on as prime minister in the coalition with the centre-left Labour PvdA party.

The two pro-European parties announced on Sunday that they had agreed to form a Liberal-Labour coalition.

The austerity drive, which is expected to be put to debate in parliament in the coming days, will include reforms in health insurance, real estate, unemployment benefits and a reduction in development aid.

The aim is to rein in the country's public finances, after the Netherlands came under fire from its European partners when its deficit tipped to 4.7 per cent of gross domestic product last year, above a three per cent ceiling imposed by the European Union.

Talks on budget cuts led to the collapse of Rutte's government in April when his far-right parliamentary ally walked out of talks.

During the elections last month, which were seen as a test of Dutch anti-European sentiment, the Liberals obtained 41 seats while Labour took 38 out of a possible 150 up for grabs. AFP