Three Dutch opposition parties on Friday reached an agreement with Prime Minister Mark Rutte’s government that should allow him to get a budget through the Senate where his ruling parties do not have a majority of their own.
To persuade the liberal Democrats, who have five seats in the upper chamber, to back the coalition’s budget, Labor and Rutte’s liberal party agreed to raise education spending €600 million next year.
They also agreed to make it easier for firms to lay off workers, a key condition for the centrist party that believes it will boost employment.
It is a measure that does not sit well with Labor nor with its trade union allies. Party leader Diederik Samsom had seemed to rule out deeper labor market reforms in a parliamentary debate two weeks earlier. He also rejected proposals from the Christian Democrats for tax relief, prompting them to walk out of budget talks with finance minister Jeroen Dijsselbloem.
To lure two small Christian parties, which have three votes in the Senate between them, into the pact, the government promised to cancel planned child benefit cuts that were supposed to raise €560 million.
The deal should allow the ruling parties to avoid further embarrassment in the Senate where, last week, their proposed pension reforms were voted down by the entire opposition.
It will probably not enable the Netherlands to keep its deficit under the 3 percent European treaty limit. The International Monetary Fund said on Thursday it expects the nation’s shortfall to reach 4.8 percent of economic output in 2015.
The Dutch central bank as well as right-wing opposition parties blame the government’s many tax increases for stifling growth. The Netherlands’ economy contracted 1.7 percent in the second quarter of this year when the eurozone’s as a whole expanded .3 percent.