National Financial Annual Report 2011

Speech | 06-07-2012

Madam Chairman,
In these economically, financially and politically turbulent times there is a strong temptation to look ahead, for instance to the political developments in our country in the next few months. And to look ahead to the financial and economic developments in the course of this year, in which we expect the Dutch economy to take a turn for the better.

However, it remains important to look back and render account for the policy pursued. On Accountability Day we look where we have come from and we ask ourselves a number of questions. What were the most important developments in 2011? Did we do what we had planned to do? And, an important part of the National Financial Annual Report: did we use public funds efficiently and legitimately?

While reviewing the year 2011, I wish to discuss with you, Madam Chairman, some key items from the National Financial Annual Report:

• First the most important economic and financial facts and figures;
• then the fight against the European debt crisis and the measures to avoid such a crisis in the future;
• and finally the quality of government financial management during the past year.  

When I presented the Annual Report of 2010 here last year, I started out with the hope that we had left the worse behind us. However, 2011 turned into a year with stormy weather from an economic and financial perspective for Europe and the Netherlands. Worldwide economic growth slowed down as a consequence of decreasing confidence. And the Netherlands has experienced the consequences of this as well. Halfway last year our economy got into a recession. Our growth amounted to 1.2% on an annual basis. In spite of these disappointing developments I consider it positive that a large part of this growth is the result of exports and company investments. That says a lot about our economic potential.  But whereas the confidence of trade and industry in the future appeared to recover, it decreased among consumers. Families kept an increasingly tight hand on their purse.

In particular as a result of this, economic growth strongly levelled off with lower tax income as a consequence. On the basis of the 18 billion package from the Coalition Agreement, which was intended to bring government finance in order, 2.8 billion euros in savings had to be achieved last year. And we managed to secure this sum. As a result the EMU balance improved compared to 2009 and 2010, but it remained behind the forecast based on the Coalition Agreement. This started from 4% of the gross national product in 2011. But due to the disappointing economic growth and the associated decreased tax income the budgetary deficit amounted to 4.7% last year, that is to say: 28 billion euros.  The figures are worrisome. With such a budgetary deficit the debt will further increase. In the long term nobody can continue to spend more than comes in.

The combination of a high deficit, an increasing debt and an ageing population demands strong measures. We cannot pass the bill on to the future and to the generations succeeding us. The importance of sound government funds is fundamental. The European debt crisis has made this abundantly clear in 2011.  While Greece sunk further and further, the large economies of Spain and Italy were also put under pressure by the financial markets. That is why the interest rate on state loans of these countries increased at a substantial pace.  The Dutch approach has always been focussed on prevention in addition to fighting the European debt crisis. The approach has three pillars.

• Firstly, the Netherlands led the way with its advocating of strictly maintaining the European budgetary rules and the independent supervision in this context. This was supported by Europe. I am convinced that this is the only way to guarantee stability in the Euro zone in the long term and to avoid a new crisis.  

• Secondly, the countries with financial problems have to bring and keep their governmental finance and economies in order. This is in their own interest and it is in the joint interest of the Euro zone.  

• Thirdly, the leaders of the Euro countries have increased the means to combat the acute crisis.  

I now come to the financial management of the central government. This encountered some challenges as well last year. Consider for example the forming a compact civil service.

Ministries have been merged and severe targets had to be set for persons and means.
In spite of these major changes the quality of the financial management continued at the same level last year and a responsible restriction of the expenses of the central government was guaranteed. The legitimacy again amply exceeded the 99% standard.

Madam Chairman,
When I submitted the budget for the year 2011 in 2010, I was an outgoing minister. Today I render account for that same year 2011. Today, we find ourselves in an economically and politically turbulent situation again. And once more I am an outgoing minister. But the continuing political will to do what is necessary – even in hard times – to set our country on its feet again puts me in an optimistic mood. This will take us step by step to where we want to be: on the way up.