UTRECHT, The Netherlands, March 9, 2005 (PRIMEZONE) -- Rabobank's Heemskerk 'optimistic' about economy:
* Argument for easing the financial burden
* Stimulus for infrastructure investments
* Investment programme for sustainable energy
Rabobank supports a government plan aimed at accelerating and reinforcing the economic recovery already underway in the Netherlands. During the presentation of the 2004 annual results, Bert Heemskerk, Chairman of the Executive Board of Rabobank Group, called for measures to stimulate spending:
1. easing the financial burden of Dutch residents by deferring the abolition of the 'Zalmsnip' rebate;
2. additional investment via the Economic Structure Enhancing Fund (Fonds Economische Structuurversterking - FES);
3. an investment programme for sustainable energy. This set of measures could be funded from the budget surplus to be collected by Minister of Finance, Gerrit Zalm, this year.
"Fortunately, the economy seems to be fairing better again. All around us we see positive developments, as if the business sector is finally emerging from a period of hibernation", said Board Chairman Heemskerk this morning. "However, this recovery could use a helping hand. And in doing so, 'The Hague' would also send out the right signal."
A one-off boost to consumer spending and investment is feasible since the Dutch budget deficit will remain within the permitted margins of the Stability and Growth Pact this year. "I can appreciate the argument for reducing the national debt, especially in order to buffer the government budget to cope with the increasing aging of the population", says Heemskerk. "But if the current recovery is to accelerate, the government would be wise to take action now." This is especially true where simultaneous government measures only serve to increase consumer caution. The government essentially froze its expenditure in 2004 by means of major cost cutting and by shifting the burden to the citizens (e.g. expenditure under the Exceptional Medical Expenses Compensation Act - AWBZ). Thanks in part to the high oil price and increased taxation revenues, the government income for 2004 and 2005 is considerably higher than forecast.
For this reason, Heemskerk is calling on politicians to use the windfalls to stimulate domestic spending in the Netherlands. Deferring the abolition of the 'Zalmsnip' rebate would cost a mere EUR 325 million, while giving each household an additional amount of over EUR 45 as part compensation for the steep rise in municipal charges.
Heemskerk believes that the government could provide a major boost to the Dutch economy by making an additional contribution to the Economic Structure Enhancing Fund. "By deploying the available (additional) funds sooner, the Dutch knowledge economy and industry in this country would receive a strong stimulus", according to Heemskerk.
Rabobank also wants to raise the profile of investments in sustainable energy. Within Europe, the Netherlands scores poorly in this area. It is not even certain whether the fairly unambitious target of generating 5% of total energy from sustainable sources by 2010 will be met. "Reason enough to raise the level of investment in bio-mass, wind energy and solar power as soon as possible," according to Heemskerk.
Rabobank: Accelerate Economic Recovery For more information: Thematic message, the Dutch economy (url for download): http://hugin.info/133178/R/983923/146525.pdf