Dutch unions attack fresh austerity plan A €4bn package of additional austerity measures aimed at enabling the Netherlands to hit EU deficit targets in 2014 has set up a bitter clash with trade unions, after the largest labour federation attacked the cuts as "stupid and ill-advised" and the government pleaded for negotiations. The clash marks a further weakening of the four-month-old Dutch centrist coalition, which took office with a mandate for deep reforms but has faltered owing to round after round of austerity measures and worsening economic news. Following this weekend's mass demonstrations in Portugal and the results of Italy's elections, the impasse in the Netherlands reflects the tensions over austerity measures that are testing the limits of European governments. The government of Mark Rutte, prime minister, proposed the wage freezes and tax rises at the end of last week after official estimates showed the Netherlands" budget deficit would come to 3.3 per cent of gross domestic product in 2013 and 3.4 per cent in 2014. The government expects Brussels to give it a waiver on the 2013 limits, but wants to bring the budget back below the 3 per cent limit the following year. The Dutch economy shrank by 1 per cent in 2012, and is expected to contract a further 0.5 per cent in 2013. Ton Heerts, head of the FNV federation of unions, condemned the package, saying billions in further austerity measures on top of the €16bn already announced in the autumn were the "stupidest thing you could do right now" and would send the struggling Dutch economy further into recession. In a television appearance on Sunday, Lodewijk Asscher, the deputy prime minister from the Labour party, pleaded with Mr Heerts to join negotiations over the cuts, saying he was "prepared to discuss adjustments." The government hopes to conclude negotiations over its budget plans with labour federations and business groups over the next two weeks to create a broad majority for a deal. Such negotiations are a traditional part of the Dutch "polder model" of consensual governance including social stakeholders. Consensus has become especially important because the cabinet, a coalition between the centre-right Liberals and centre-left Labour party, lacks a majority in the Dutch upper house, or Senate. The Senate has traditionally been a minor body with little power, but under the pressure of austerity, opposition parties have turned to it over the past two months to block proposed cuts. That has forced the government to cut deals with small parties to get its budget plans and reforms through. Plans to shorten unemployment insurance cover and lift legal impediments to firing workers already face stiff opposition. The new package includes pay freezes for civil servants and for the government-subsidised healthcare sector. The government also proposes to raise taxes by dropping the inflation indexation of tax brackets for one year. In a letter to parliament, Jeroen Dijsselbloem, Labour party finance minister, said the cabinet aimed "to create as broad social support for its proposals as possible" and was "open to alternatives." But where union leaders were willing to negotiate last year over what kinds of cuts were least damaging, they are now rejecting further austerity as such. Corrie van Brenk, head of the Abvakabo labour union, said austerity "will only worsen the Dutch economy and increase unemployment." Gaining enough support from opposition political parties may prove tough as well. The leader of the centre-right Christian Democrats said on Sunday on television he could accept pay freezes, but not tax rises. The leader of the far-left Socialists said the opposite.