Government surplus in first quarter of 2013

In the first quarter of 2013, the Dutch government has realised a surplus, predominantly due to the one-off revenue from the auction of telecom frequencies. The nationalisation of SNS REAAL does not affect the government balance sheet. The public deficit over the past four quarters has fallen to 2.9 percent of the GDP.

Government balance sheet

Windfall from auction of telecom frequencies

In the first quarter of 2013, the government had a positive balance sheet of 4.5 billion euros. For the first time since the fourth quarter of 2008, public revenue exceeded public expenses. The surplus is mainly due to the auction of frequencies for mobile communication paying 3.8 billion euros into the government coffers.

Nationalisation SNS REAAL does not affect government balance sheet 

In the first quarter of 2013, SNS REAAL was nationalised. The government invested 2.2 billion euros and granted a loan of 1.1 billion euros. Cancellation of debt contributed to improvement of SNS REAAL’s financial position. The current value of SNS REAAL is higher than the nationalisation price and the capital is expected to bring in a decent return. According to EU monetary rules, this makes it an investment rather than a bailout, which will have no effect on the government balance sheet, although the bailout causes public debt to increase by 3.3 billion euros.

Government balance sheet and public debt on an annual basis

Deficit below EU budget deficit limit

Calculated over the past four quarters, the government deficit will be 2.9 percent of the gross domestic product (GDP) on an annual basis. At the end of the first quarter of 2013, the deficit will be below the European budget deficit limit of 3 percent. The public debt will be 72 percent of the GDP, which is well above the European debt-to-GDP ratio of 60 percent.

Floris Jansen