Wednesday, 22 October 2008

The Netherlands and the economical crisis

Já várias pessoas me perguntaram como estão os Países Baixos a reagir à crise financeira actual?

A Rainha Beatriz,no discurso de abertura do Parlamento em Setembro último,em Haia,mostrou um optimismo moderado.

Fiz "copy/paste" deste artigo para que possam ter uma ideia mais precisa.

"As investment banks crumbled in New York, the US government was forced to nationalise an insurance giant and stock prices nosedived worldwide, Queen Beatrix gaily announced that the Netherlands is in relatively good shape. This was the thrust of her budget speech on behalf of the government on Tuesday.

This moderate optimism is due to the surpluses in the budget presented by finance minister Wouter Bos. But he also warned: “The Netherlands has an open economy which is very susceptible to developments in the rest of the world.”

Bos says his budget can take a few knocks. But economic uncertainty is bigger than in previous years. The finance minister has stretched his budgetary policy to the limit with measures to maintain consumer spending power for most people.

There is no safety margin, should the economy take an unexpected turn for the worse. Then he will be forced to cut spending. At the same time, the positive welcome unions and employers organisations have given the budget underlines their restored belief in the Dutch consensus model.

Bos can claim several milestones in his budget. For the fourth consecutive year there is a budget surplus; state debt as a share of gross domestic product (GDP) has fallen to its lowest level since records began in 1814; consumer spending power has been maintained despite high inflation; and the Netherlands has avoided inflation despite low growth and a stable unemployment rate.

The government’s economic policy office CPB, whose forecasts the cabinet uses for its budget, sketches a couple of potential scenarios. Much depends on three external factors: the price of oil, the strength of the euro and the growth rate of world trade.

And the CPB sits on the fence in respect of what the final outcome will be.

There are many uncertainties. Although the CPB has discounted the effects of the credit crisis in its latest economic forecast, serious consequences cannot be ruled out, it says.

If world trade subsides next year, all the core economic figures for the Netherlands will flash red. Economic growth will virtually grind to a halt, consumer spending and investment will slow down, exports and job creation will slump. All this will result in a deterioration of government finances.

The open economy is the country's weak spot, the CPB says. The Dutch economy is more susceptible to a decline in world trade than most other countries in the European Union.

The CPB bases its forecast for 2009 on an oil price of 125 dollars a barrel, on a euro-dollar rate of 1.57 and on 4.75 percent growth in global trade.

Since its forecast, the price of oil has fallen to 90 dollars and dollar has strengthened. If these core figures change, so do the forecasts for economic growth, consumer spending power and employment.

A lower oil price means lower revenue from natural gas sales for the treasury, but more spending power for consumers and lower energy bills for companies. The economy will grow faster than the 1.25 percent forecast for 2009, meaning more tax revenues for the treasury so that the government's budget remains intact.

A weaker euro will result in higher import prices for raw materials and other goods and will therefore push up inflation. Exporters will consequently benefit more from trade outside the euro-zone.

But the doom scenario does not have to happen. Dutch companies outside the financial sector have solid revenue buffers, the housing market is not as jittery as others in Europe and mortgages in the Netherlands are mainly at a fixed, rather than variable, rate."

Roel Janssen in

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