Monetary Policy of The Netherlands

Monetary Policy of the Netherlands Like most European countries, from 1 January 2002, the Netherlands introduced a single European currency – the euro. Today in the Netherlands are used coins of 1, 2, 5, 10 and 50 euro cents, 1, 2 and euro banknotes in denominations of 5, 10, 30, 50, 100 and 500 euros.

Introduction of the euro marked a milestone of European economic integration, in which the Netherlands has one of the leading roles. The contribution of the Netherlands to the European Union budget is € 5.9mlrd. These funds are used, in particular, to finance the development and implementation of European policy in the field of agriculture, transport infrastructure projects in Europe, the overall economic and social projects. The Netherlands also receive funding from the central structures of the European Communities.

The budget of the Netherlands in 2006 amounted to € 132.8 billion. In the third Tuesday of September each year, Finance Minister presents next year’s budget to the lower house of parliament. The budget process in the Netherlands comprises the steps of preparing the budget, the budget presentation, negotiation, execution, audit and report. The total budget of the country is composed of the budget of each ministry.

The majority (about three-quarters), the country’s spending is paid for by tax revenues, about 15% of the funds coming from other sources of profit (sale of gas, etc.), part of the money is borrowed on the international money market.

The structure is dominated by tax concessions, property taxes and income taxes; in the country also exist indirect taxes (VAT and others). Activities of the local authorities paid from the central budget; they also receive a fixed portion of the income from some taxes. Local taxes and other sources of income for local authorities is very limited.

The Netherlands is a member of the European Economic and Monetary Union (Economic Monetary Union, EMU), whose policy is determined by the Central Bank of Europe (European Central Bank, ECB) and is aimed at ensuring a stable purchasing power for the citizens of the eurozone countries.

National banks of the eurozone countries form the European System of Central Banks (European System of Central Banks, ESCB), which conducts monetary policy. In the ESCB system of banks, national banks delegated more authority: certain aspects of monetary policy, including determining the type of payment system issues and issue banknotes.

Terms: currency, ECB, government, Tax

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