TOBY STERLING

AMSTERDAM (AP) â¿¿ The Netherlands' queen and the outgoing prime minister presented an austere annual budget on Tuesday that cuts spending on health care, immigrants, and government workers â¿¿ a foretaste of more far-reaching cuts likely to come under the conservative Cabinet now being formed.

At the start of an afternoon full of ceremonies, rituals and conspicuous hats, Queen Beatrix rode through the streets of The Hague in her gold-trimmed horse-drawn carriage, waving to thousands of fans who lined the route leading to the 13th-century Hall of Knights.

In her speech to both houses of Parliament, she outlined the government's plans for the year ahead â¿¿ despite the lack of a new Cabinet 104 days after national elections.

"A far-reaching package of cuts is necessary now to improve the position of our country in the long term," she said, reading a text written by outgoing Prime Minister Jan Peter Balkenende.

Balkenende's budget targets euro1.8 billion ($2.4 billion) in spending cuts in 2011, reducing the deficit to euro19.7 billion or 4.0 percent of economic output next year.

The major savings in the budget presented Tuesday include increasing patient health care payments, slowing pay raises for government employees to below the inflation rate, and reducing a tax break for child care.

In a nod to the anti-immigrant sentiment prevalent among many Dutch, it also reduces the amount of funding for language and citizenship classes that were made mandatory for immigrants by the outgoing administration. Immigrants will have to cover the gap.

Mark Rutte, who is likely to become the next prime minister after his free-market VVD party finished first in the June elections, praised the cuts as a "good start." He said he hopes to cut another euro16 billion by 2015.

The minority Cabinet under negotiation includes the VVD and Balkenende's Christian Democrat party, with outside support from the fast-growing anti-Islam Freedom Party.

The Netherlands economic situation is strong by comparison with most industrial countries, with forecasts for 2011 showing debt at 66 percent of GDP, economic growth of 1.5 percent, and unemployment falling to 5.5 percent.

But Finance Minister Jan Kees de Jager said a relatively good performance doesn't disguise the fact that "the Netherlands has become a good bit poorer" since the crisis.

"It's time to turn off the money faucet," of stimulus packages and deficit spending, he said.

With politicians deadlocked over reforms to the country's pension system since before the election, Dutch labor unions and employers' associations have agreed on their own accord to raise the retirement age from 65 to 66 in 2020 and to 67 in 2025.

Rutte hopes to effect those increases more quickly.

There was a heavy police presence in The Hague Tuesday since recent appearances of the Royal Family have been plagued by disturbances. The most notable came in April 2009, when an unemployed loner targeted Beatrix and her family in an assassination attempt on the Queen's Day national holiday.

The man came within meters of slamming his car into an open-topped bus carrying the royal family before he swerved into a stone monument, killing himself and seven innocent bystanders.

A 29-year old man was tackled by police and arrested for throwing a small candleholder at Beatrix's carriage on Tuesday. No one was injured. His motive is not known.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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