Prinsjesdag, the third Tuesday of September, is nearly upon us and the Dutch government is set to present next year's budget. This will be the first annual budget since the onset of the global recession, and many are questioning the government's strategy including its own advisory board.
 
Back in the 1970s and 80s, a combination of factors sent the Dutch economy into a slide. Those factors came to be known as 'Dutch Disease'. Lots of things have changed since then. But that doesn't mean the Dutch Disease is gone for good. Just look at news bulletins about the Mexican flu: "While the symptoms are similar to previous flu's, the strain itself is entirely new. Meaning no one knows how quickly it might spread."
 

In this case no one knows how quickly the problems facing the governments running huge deficits will spread. This country's current economic policy, and the government's broad plans for next year's budget, have lead some to wonder if the Netherlands is about to catch an illness similar to the lurking Mexican flu.
 

Dutch Finance Minister Wouter Bos is dotting the last i's and crossing the last t's in next year's budget.
Meanwhile, the fate of his last budget looms large. The ink was barely dry on the budget for 2009 when it was made obsolete by the global recession. How carefully is Minister Bos protecting this country from a new sort of Dutch disease?

 
For one thing he's playing fast and loose with loan guarantees to banks. He wants to raise the ceiling for those guarantees to 300 billion euros. That's a lot of debt to come onto the books if things go wrong. And deficit spending is an important contributor to the new Dutch disease.
 

From different parts of the world optimism is voiced over the careful recovery of the global economy. Likewise  the Mexican flu is said not to be so dangerous as it was expected to be. But many have been warning that danger from the H1N1 virus is not over. It could come back this fall with a vengeance.
 

The same can be said for those complacent about the Dutch economy. Over the years, the Dutch government has taken a number of precautions to protect this country from the disease: strict budgetary rules, some of them imposed when the Euro was adopted.
 

But the main restraint on deficit spending, the European Union's stability and growth pact limiting countries to overspend their budgets by no more than 3 percent, is now out the window. In addition, another important indicator, the debt ratio, is climbing fast.
 

The H1N1 virus provides health care workers around the world with a challenge in the coming months. The budgetary dangers lurking on the horizon provide financial experts a challenge for years to come.
 

Next year's budget will have cuts across the board. But no major changes - the government is facing stiff resistance just trying to implement raising the age of retirement from 65 to 67. But an optimistic outlook for recovery may leave the Netherlands vulnerable.
 

This recession may not be just a dip; the economy may have shrunk permanently. In which case, the few budget-cutting measures currently on the table will not prove to be an effective Tamiflu against a new kind of Dutch Disease.