Dutch Socialists Would Cut Growth, Inhibit Job Creation

The Netherlands’ ruling liberal party would create more jobs than the opposition Socialists, a report shows.

Dutch Socialist Party leader Emile Roemer debates Prime Minister Mark Rutte in Amsterdam, August 26
Dutch Socialist Party leader Emile Roemer debates Prime Minister Mark Rutte in Amsterdam, August 26 (RTL)

The Netherlands’ opposition Labor and Socialist Parties would inhibit economic expansion and job growth if they were to come to power. The ruling liberals, by contrast, would add jobs to the economy and reduce the deficit if they remain in office.

Those are among the findings of the European country’s Bureau for Economic Policy Analysis, a government think tank, which studied the effects of the platforms of the main parties that vie for seats in September’s parliamentary election.

With the exception of the nationalist Freedom Party, which calls for a withdrawal from the European Union, all major parties plan to reduce the deficit to under 3 percent of gross domestic product in order to comply with European fiscal rules.

The Socialist Party, which is neck in neck in the polls with Prime Minister Mark Rutte’s liberals, would reduce spending by €10 billion by 2017.

The Christian Democrats, Rutte’s coalition partners, and Labor would cut several billions short of what is needed to balance the budget — €14 and €15 billion, respectively.

Although unemployment is expected to rise in the short term under the liberals’ spending plan, their proposed regulatory reforms and tax cuts should enable up to 250,000 jobs to be created between now and 2040.

Under the Socialists’ proposals, an equivalent number of workers would lose their jobs in the same period.

Analysts expect the economy to shrink another 1.8 percent over the next five years if the far left were to set policy.

Similarly, under Labor’s plans, unemployment would rise and gross domestic product contact by 2.3 percent, “the worst score of all political parties,” according to the Bureau for Economic Policy Analysis’ report.

The Dutch economy contracted 3.7 percent in 2009 and has seen a sluggish recovery since, burdened by high levels of household debt and a dependence on exports to other European countries.

This year, the economy could shrink more, although modest growth is expected for 2013.

The Netherlands has among the lowest unemployment rates in the European Union at 6.5 percent, but some 100,000 more people have lost their job since Rutte became prime minister two years ago.

The ruling coalition of Christian Democrats and liberals collapsed in April when Freedom Party leader Geert Wilders refused to do a budget deal with them for €14 billion in deficit reduction.

The far-left Socialists have since emerged as Rutte’s main rivals, polling at upward of thirty seats, double their current delegation.

The largest party, even if it does not secure an absolute majority, traditionally delivers the prime minister in a coalition government.

The Socialists as well as Labor, which has shifted more to the left, call for higher taxes on incomes over €150,000.

Both also want to raise taxes on wealth and reduce a popular home mortgage interest deduction that the liberals have vowed to defend.

They would further block or reverse liberalizations in health care and raise salaries for public workers, including teachers.

Rutte warned of a socialist menace when he kicked off his election campaign on Saturday. “The socialists destroy wealth,” he told supporters. “Eventually, everyone is equal because everyone is poor.”

Later, he argued there was no “discernible difference” between the platforms of Labor and the Socialist Party.

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