The budget deficit of the Dutch government

BNR Economists panel
Erasmus School of Economics

In the economists panel of BNR Nieuwsradio, Casper de Vries, Professor of Monetary Economics at Erasmus School of Economics, discusses the budget deficit that the Dutch government is currently facing.

According to De Vries, Europe should do more to cooperate in the field of defence. There is still a lot of profit to be made: every country wants to arrange its own defence, resulting in too little coordination and there is a huge variety of weapon systems which cannot be coordinated well. It is good that the Netherlands recognises that the defence budget must be increased; in any case, efforts must be made to close the gap with NATO's 2% standard, which has not been achieved for years.

Borrowing money?

Reference is made to the situation in which the Netherlands finds itself, that the national debt is relatively small and for that reason there is room to borrow money. De Vries emphasises that the degree to which it is responsible to do so depends on the destination of the money. If it is invested, this may be a sensible choice; if it is actually for consumption, this is a completely different situation. In the case of healthcare, for example, one must seriously ask oneself whether the situation remains sustainable if the working population in the Netherlands uses a quarter of its earnings to pay for healthcare.

Professor
More information

You can listen to the broadcast of BNR Nieuwsradio, 25 April, here.

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