In the face of rising inflation, Dutch Prime Minister Mark Rutte warned on Wednesday that there is a “limit to what a government can do.”
Rutte told CNBC at the World Economic Forum in Davos, Switzerland, that the Dutch government would assist people on lower and lower-middle incomes with growing energy expenses.
“You can’t help everyone,” he added, “therefore… we in the West will be a little poorer because of high inflation, high energy expenses.”
According to the Dutch statistics organisation CBS, inflation in the Netherlands reached 9.6 per cent in April. This was lower than the 9.7 per cent inflation rate registered in March, but it was still historically high.
In March, the Dutch government proposed measures to alleviate the burden of rising costs. This includes doubling the one-off energy allowance for persons with salaries close to the country’s social assistance benefit level to 800 euros ($852).
Rutte agreed that rising costs will result in “societal pressures,” which he claimed might be observed in European elections.
“People generally recognise that there is a limit to what a government can do,” he added, “as long as they believe it is done in an honest way and that you’ve helped people who need it the most.”
Social mobility is one of Rutte’s top concerns for his coalition government, which was formed in January after a roughly 10-month process.
He said that the government was trying to break the country’s “meritocracy trap” and that other variables, such as education, might help individuals achieve the “Dutch dream.”
Rutte said there are “ramifications coming out of the energy crisis and out of the Ukraine crisis that are unavoidably also impacting on the macroeconomic figures that I cannot blame the central bankers for,” when asked about the European Central Bank’s approach to tackling inflation in the eurozone.
(Adapted from CNBC.com)