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Dutch government unveils budget overshadowed by virus

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Resplendent in orange suit, tie and shoes and a black hat with gold bow and protected by a homemade "corona bumper" decorated with a model carriage, Johan Vlemmix, center, stands in front of Royal Palace Noordeinde, in The Hague, Netherlands, Tuesday, Sept. 15, 2020. Vlemmix drove three hours to get to The Hague, as he has done every budget day for more than 20 years, to watch King Willem-Alexander and Queen Maxima appear on the palace balcony, rear. The balcony appearance of the king and queen has been cancelled due to COVID-19 related measures. "It's surreal," he said. "You see the red carpet has been rolled out, the king has arrived and there's nobody here. I've never experienced this. (AP Photo/Mike Corder)

THE HAGUE – The Dutch government plans to invest in protecting jobs and businesses during the coronavirus crisis but warned Tuesday as it laid out its spending plans for the coming year that the Netherlands must brace for the harsh economic impact of the pandemic.

Public health precautions meant the pageantry that normally accompanies the traditional state opening of parliament and budget presentation was dialed back significantly to ensure lawmakers adhered to the government’s social distancing guidelines.

There was no horse-drawn carriage ride through The Hague by King Willem-Alexander and Queen Maxima and no joint meeting of the two houses of the Dutch parliament, known as the States General of the Netherlands, in the historic Knights Hall.

Instead, lawmakers gathered to hear the king's speech in a church near the parliament building.

Finance Minister Wopke Hoekstra said as he introduced his budget plan that the Netherlands had slumped since reporting a 23rd consecutive quarter of economic growth in February into “the greatest economic contraction since World War II.”

“To a large extent, the hit has yet to come,” the minister warned. "Unemployment will rise next year; more companies will go bankrupt, and public finances will have a hard time.”

Hoekstra's ministry expects to spend an extra 45.9 billion euros ($54.5 billion) this year and in 2021 to protect businesses and jobs. During the same period, it expects to miss out on an estimated 16.6 billion euros in income such as taxes because of the coronavirus crisis.

Instead of having a budget surplus like last year, the government anticipates a deficit of 7.2% — 56 billion euros — this year and a deficit of 5.5% or 45 billion euros in 2021, the Finance Ministry said.

Hoekstra said the numbers could change depending on the course of the pandemic and its impacts.

“It's like steering in mist,” he said.

But with a national election scheduled for March, the government also stressed that it had built up solid buffers in recent years, and it found the money to woo voters with income tax cuts to go along with the billions to safeguard jobs and businesses threatened by the virus.

The king laid out the broad themes in his annual “speech from the throne” written by the government.

“The government is choosing not to make cuts in these uncertain times, but rather to invest in job retention, good public facilities, a stronger economic structure and a cleaner country now and in the future,” Willem-Alexander said.

Prime Minister Mark Rutte’s coalition government already has pumped billions of euros into propping up hard-hit sectors of the economy in an attempt to safeguard jobs. It also is investing in programs to help people who lose their jobs find work in other professions such as health care and education.

The country's public health institute reported that 8,265 people tested positive for COVID-19 in the last week, compared to 5,427 in the week earlier. The percentage of positive tests also rose from 2.8% to 3.9% and was significantly higher in the major cities of Amsterdam, Rotterdam and The Hague.

The Organization for Economic Cooperation and Development said Monday that the gross domestic product in the world's 20 major industrialized nations dropped by a record 6.9% in the second quarter from the previous three-month period.

Usually, thousands of people line the streets and gather outside a palace on budget day to catch a glimpse of the royal family, but police and local officials urged the public to stay away this yyear.

Early Tuesday, there was just one man standing outside Noordeinde Palace.

Resplendent in an orange suit and a black hat with a gold bow, and standing behind a homemade “corona bumper," Johan Vlemmix said he drove three hours to get to The Hague, as he has done every budget day for more than 20 years.

“It's surreal,” he said. “You see the red carpet has been rolled out, the king has arrived and there's nobody here. I've never experienced this.”


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