Dutch PM offers to resign after budget talks collapse
by Daniel Mason
The Netherlands' Prime Minister Mark Rutte has offered his government's resignation after negotiations over bringing the budget deficit into line with European Union rules collapsed at the weekend.
The prime minister met Queen Beatrix this afternoon to offer his resignation, triggering new elections likely to take place in September or October.
Rutte's minority coalition failed to get backing for cuts worth about €16bn from far-right Freedom Party leader Geert Wilders, who opposes toeing the EU line. The government depends on Wilders' support for its majority.
The lack of agreement came after weeks of negotiations. Recent forecasts showed that the Netherlands' deficit was set to come in at 4.6 per cent in 2012, exceeding the EU's limit of 3 per cent and potentially putting the country's AAA credit rating at risk. The yield on 10-year government bonds rose today due to the uncertainty.
Rutte, leader of the conservative-liberal People's Party for Freedom and Democracy, has been in power since October 2010, in partnership with the centre-right Christian Democrats.
The leader of the Socialists and Democrats group in the European Parliament, Hannes Swoboda, said it was inevitable that relying on a right-wing party would lead to "a negative spill-back at a certain moment in time". He added: "Conservative parties and leaders should learn from this and not accept any government formations in which they are dependent on far-right parties."
Meanwhile, Alliance of Liberals and Democrats leader Guy Verhofstadt criticised Wilders for calling for steeper austerity measures in Greece while refusing to accept relatively modest budget cuts at home.
"Wilders takes a hypocritical position by calling the Greeks 'lazy' while at the same time refusing necessary fiscal consolidation himself," he said. "The Netherlands has lost a lot of time negotiating with someone who seems not to have been honest about his intentions from the start. His attitude is bad for the Dutch economy."
According to The Guardian, Dutch finance minister Jan Kees de Jager said the government would continue look for support for its budgetary measures in parliament, despite losing the support of Wilders. The Netherlands has taken a tough line with other eurozone countries that have failed to meet deficit targets.