The Netherlands sought to restore economic confidence by implementing austerity measures, but those same measures could end up hurting economic future growth. The Central Planning Bureau (CPB) predicted that the economy would contract 0.5% in 2013 after previously predicting that it would expand by 0.75% in past reports.
The result could be a new set of budget cuts in the country that has already been undergoing harsh austerity over the past three years. While the conservatives currently control the government, socialists are demanding increases in spending to help improve growth and offset the debt in an entirely different way.
The iShares MSCI Netherlands ETF (NYSE: EWN) is trading up nearly 10% over the past three months.