NETHERLANDS - The president of the Dutch central bank has told unions to stick to the wage agreement struck between the government and employers in the autumn last year.
Nout Wellink said that economic recovery would falter if unions went back on the agreement and demanded wage rises.
The wage agreement entailed a wage freeze for two years on the condition that the government would offer some concessions on early retirement.
On Monday unions rejected the government’s offer on pre-pension schemes, jeopardising the entire early retirement and pre-pension agreement.
Wellink warned unions that unemployment was rising rapidly and would soon spiral out of control if wages were not moderated.
He said that he was “strongly” in favour of people working longer and the effective retirement age should be increased to atleast 65 years. Currently, the effective retirement age is around 61 years.
In its annual report, the central bank said: “For the structural growth rate of the Dutch economy to be sustained, both the overall participation rate and labour productivity rate need to be boosted.”
The OECD said in its economic survey on the Netherlands that the government should push ahead with its plans to end tax-incentives for early retirement schemes by 2006.
GDP per capita could also be increased by raising the annual number of hours worked per employee, which is the lowest in the OECD region, the report added.
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