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Euro Crisis: Even the Good Kids are Getting Hurt


Despite Europe’s problems, thrifty and well-organized northern European countries have so far managed reasonably well—but that is beginning to change. Negotiations in the Netherlands next week will focus on how to cut the country’s budget deficit by €6 billion, or one percent of GDP, to meet EU budget laws. The WSJ reports:

The government aims to reach a deal in August, Finance Minister Jeroen Dijsselbloem said Friday. He promised that he would look for ways to stimulate growth but warned there was no easy fix.

“I hear too many people saying that spending cuts are bad, and that we should lower taxes,” he said. “There is simply no money for that. The time for easy solutions is over.” […]

The Dutch government had decided in April to postpone introducing new austerity measures, estimated at €4.3 billion in spending cuts and tax increases, following a deal with unions on overhauling the labor market.

WRM was in the Netherlands this week and found that even in this “core” Northern country, from the foreign ministry to the public schools, austerity is truly beginning to hurt. A sharp rise in unemployment has hit the country hard. According to the chairman of a lobbying group for small businesses, reports the WSJ, 800 companies went bankrupt just last month, and further austerity measures are now being contemplated in Amsterdam. The Netherlands is not alone, however. The Belgian government needs to come up with €500 million in savings this year to shirk EU sanctions, and Finland is also mulling over more austerity.

As the downturn continues, infighting among parliaments and peoples will worsen as more tax hikes and spending cuts are considered. No one seems to be safe from this awful mess, which is now causing pain even among the more frugal and responsible nations.

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