The decision by Brussels to give the Netherlands an extra year to reduce its budget deficit to under 3% is a good one, Christine Lagarde, head of the International Monetary Fund, told current affairs television show Nieuwsuur.

European commissioner Olli Rehn said on Friday that the Netherlands had until next year to ensure its budget deficit meets eurozone rules.

‘It is important the Netherlands meets European budgetary rules but people should not hurry unduly. I am very pleased with the European Commission’s decision to give countries more time,’ she said.

However, cuts in spending are not enough, Lagarde said. The Netherlands should make it easier to start a company, more must be invested in research and development and the problems in the housing market need solving.