Dutch Cabinet cuts spending in 2011; more to come

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 -- 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.