- Category: News
- Created on Thursday, 14 June 2012 21:08
- Written by Amsterdam Herald
Coen Teulings, head of the Netherlands Bureau for Economic Planning Analysis (CPB), said politicians needed to act to save the currency or face years of low growth.
His verdict carries extra weight because the CPB is the independent agency which is charged with vetting all government economic policy before it becomes law.
It also came on the same day that the the CPB said the next government would need to find an extra €25 billion in savings in 2017 in order to balance the books.
Speaking on BNR Nieuwsradio, Teulings said the collapse of the euro had become a "genuine and serious possibility" following Spain's application for an emergency loan worth €100 billion and the ongoing Greek crisis.
He said: "For politicians the question arises: if we don't want this, we need to take far-reaching steps. We can no longer say 'wait and see', solve today's problems and see what tomorrow brings. That's not an option."
Teurlings said that if the euro fell apart, it would lead to years of low growth and enormous losses. "So it's a very big risk," he said.
The CPB was more positive about the Spring Accord, the five-party budget deal agreed in the wake of the collapse of Mark Rutte's cabinet to bring the Dutch budget deficit within the European Union's 3 per cent limit.
The agency forecast that the deficit would fall to 2.9 per cent next year if the measures in the deal were implemented in full, but significant further reductions would only be possible if more budget savings were made.
The Labour Party (PvdA) and Christian Democrats (CDA) have pledged in their election manifestos to wipe out the budget deficit by 2017.
The two liberal parties - the centre-right VVD and the centre-left D66 group - are expected to include similar promises, while the populist parties, the Socialists and the Freedom Party (PVV) favour a more long-term reduction.
BNR: CPB directeur: Uiteenvallen euro serieuze mogelijkheid