Ministers have agreed how to implement a €6bn austerity package aimed at reducing the budget deficit to below the eurozone-required 3%, according to media reports on Friday.

The plans will not be finalised until after the macro-economic forecasting agency publishes its latest forecasts in mid-August, but the broad sweep of the deal has now been agreed, the Volkskrant says.

The most notable decision is a plan to allow people who used set up a special investment fund using golden handshakes – which allowed them to avoid tax on the package – to access that money more cheaply. This, ministers say, will generate €1bn in extra tax income and put money back into circulation.

Budgets

A further €700m will be raised by shaving ministerial budges. More healthcare cuts are also on the cards, and the income limit for help with health insurance costs will be raised, according to the NRC.

The bulk of the cuts will come from bringing back the previous €4.3bn austerity package which was shelved earlier this year in the hope that consumer spending would pick up.

That means a pay freeze for civil servants and increases in income tax will now be implemented. Both measures are expected to generate €1bn.

Opposition

The government’s failure to agree a broad approach with opposition parties means ministers are hoping to delay presenting the complete package as long as possible, the Volkskrant says.

This will give time for behind the scenes deals to ensure individual aspects of the package can be pushed through the senate. The government does not have a working majority in the upper house of parliament.

Ministers will meet for the first time after the summer break on August 16 but the proposals need to be finalised by the end of the month, ahead of the September budget presentation.

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