国际英语新闻：European debt crisis affects Dutch economy

THE HAGUE, June 11(Xinhua) -- The Dutch economy is facing uncertainties due to the European debt crisis, the country's central bank said.

The economy is expected to grow 1.2 percent this year, but prospects for 2011 and 2012 are surrounded by huge uncertainties, according to a report released by the DNB bank on Friday.

As European governments are busy with consolidating public finances, the cutbacks implemented by trade partners will depress foreign demand for Dutch products, the bank predicted."This will dampen Dutch growth."

At home, lower public expenditure and higher taxes will also hold back growth in private spending, said the DNB.

In a scenario in which European governments follow agreements under the Pact for Stability and Growth, the Dutch economy could grow by 1.3 percent in 2011 and 1.7 percent in 2012, the bank said.

However, in case that countries fail to sort out their public finances, negative confidence effects and high interest rates would keep Dutch economic growth hovering around low levels for a prolonged period.