NETHERLANDS – Rating agency Standard & Poor’s says current pension reform could assist the sustainability of the Dutch budget and underpin its credit standing.
“The government has announced an overhaul of the health insurance system and changes to early retirement and pre-pension schemes in 2006 aimed to curb expenditures and increase the labour participation rate,” S&P said.
“The implementation of these reforms, if accompanied by further adjustments in pensions and social benefits, should help to ensure the longer-term sustainability of the public accounts and underpin the Netherlands' credit standing.”
It added that a rapidly ageing population and low employment rates are expected to put a strain on fiscal accounts and long-term growth prospects.
The agency affirmed its AAA/A-1+ rating on the country and said the outlook is stable.
"The affirmation reflects the government's determination to keep fiscal deficit and debt levels in check through expenditure restraint, despite the adverse impact of the recent economic slowdown on the public accounts," said S&P credit analyst Beatriz Merino.
"The ratings on The Netherlands are also supported by consensus-based politics, which ensures broad-based support for economic and fiscal reforms going forward. In addition, they are underpinned by its prosperous, resilient, highly open, and diversified economy."