Although yields on Japanese government bonds (JGBs) are stable at a historically low level, this is simply because the credibility of Japan’s fiscal management in financial markets has been ensured.
A recent DNB survey shows that Dutch citizens acknowledge this necessity. The European agreement to narrow the deficit back to below 3% of GDP by 2013 enjoys broad support. But that alone is not enough. In addition, the Netherlands should at least aim to bring the budget close to balance by the end of the new cabinet period.