Dutch general quits over spending cuts

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The Independent Online
BRUSSELS - A senior Dutch general has resigned over plans to slash spending on defence, writes Andrew Marshall. His departure is the first sign that the new coalition government could face a rough ride in its attempts to reduce public expenditure.

The planned defence cuts amount to almost 1 billion guilders ( pounds 372m), a hefty chunk from a defence budget that amounted to 13 billion guilders in 1993, according to Nato figures. Aria van der Vlis, the Chief of Staff, resigned on Monday, saying that this undermined defence policy. Concern at Nato headquarters about previous defence cuts in the Netherlands is likely to be redoubled; spending has been cut in every year since 1989 in real terms, and the Netherlands is an important member of the alliance.

But these are only one part of spending reductions totalling 18bn guilders planned by the government, aimed also at health care, pensions and child benefit. The proposals are contained in a draft plan approved at the weekend that will be the basis for a new coalition government under Wim Kok, the former finance minister and a member of the Labour Party. Spending cuts wrecked earlier attempts to form a coalition between the Labour Party, the centrist D66 and the centre-right Liberals.

The reason for the cuts is that the government is spending more than it gets in taxes, and is trying desperately to close the gap. The share of taxes and social security in the economy is already one of the largest in Europe, and the ratio of government debt to GDP is rising.

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