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Surprising news last week. The Dutch government suffered an unexpectedly large budgetary setback. A pay hike for government workers turns out to have a bigger impact on the budget than previously thought. But why? In the news we read: “the pay hike for government employees is a bigger burden than previously estimated, because inflation is near zero. The government budget is linked to that inflation and, as a result, barely grows. This has resulted in a €2.5-billion-euro windfall.

 

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