The Dutch governing coalition collapsed on Saturday when far-right politician Geert Wilders pulled out of budget cut talks, saying it was not in the Netherlands’ interest to meet the deficit limit of three per cent imposed by the new European fiscal pact.
EU-imposed austerity measures have cost leaders in southern European countries, including Greece, Italy and Spain, their jobs. With the fall of the conservative Dutch government, and the possibility that Nicolas Sarkozy may lose the French presidential election that begins on Sunday, the damage seems to have spread to Europe’s prosperous north.
Highlighting widespread voter anger over EU-imposed budget cuts, Mr Wilders said he could not allow Dutch citizens to “pay out of their pockets for the senseless demands of Brussels”.
“We don’t want to follow Brussels’ orders. We don’t want to make our retirees bleed for Brussels’ diktats,” Mr Wilders said.
The loss of Mr Wilders’ support left the conservative government of Mark Rutte, prime minister, with just over a third of the seats in parliament.
Mr Rutte and other party leaders said that made new elections inevitable. He is expected to offer his cabinet’s resignation to the Dutch Queen on Monday, but leave the cabinet in place as a caretaker government until elections are held, probably in September.
The fall of Mr Rutte’s government is ironic because the Dutch were among the most vociferous supporters of strict budget limits during negotiations over Europe-wide fiscal reforms at Brussels summits last year.
After the slowing Dutch economy led the Netherlands’ own 2013 deficit estimates to jump to 4.6 per cent, Mr Rutte was forced in early March to launch negotiations with his coalition partners – the Christian Democrats and Mr Wilders’ Party for Freedom – over new cuts.
While awaiting elections, the conservative caretaker government will be forced to seek agreement on a budget with leftwing opposition parties. The leaders of the opposition Labor and left-liberal D66 parties said they might back some cuts with a view to long-term deficit reductions below 3 per cent. But they said they were not interested in ensuring that the deficit met the 3 per cent limit in 2013.
D66 leader Alexander Pechtold said the government would need to go “hat in hand” to Brussels to see whether a smaller package of cuts would be acceptable.
But a person with knowledge of the government negotiations said the Liberals and Christian Democrats were both determined to reach the 3 per cent goal, and that it might be possible to create shifting coalitions to pass different measures to reach that goal.
The fall of the government has unpredictable ramifications for the future of Mr Wilders. On Saturday, Mr Rutte and Christian Democrat leader Maxime Verhagen rushed to paint him as irresponsible for having triggered the collapse of talks.
Mr Rutte said the negotiators were “completely done”. He said an agreement on budget cuts had already been reached when Mr Wilders abruptly said Saturday he was no longer willing to approve them.
Exiting the government at this stage will allow Mr Wilders to disclaim any responsibility for unpopular budget cuts. But the biggest winner in elections could be the far-left eurosceptic Socialist party, which has seen its support rise to as much as 20 per cent of the electorate over the past year.
Meanwhile, Dutch analysts said the inability of even the prosperous, deficit-averse Netherlands to generate voter support for Europe-directed budget cuts called the sustainability of the EU fiscal pact into question.
“Enforcing [the pact] would always be difficult. Punishing countries is a naive concept,” said Arnoud Boot, a professor of finance at the University of Amsterdam.
Mr Boot said fiscal harmonisation would be possible once the European economy returns to normal growth, but that trying to execute it in times of crisis causes “undue pain, which would lead to too much opposition to EU enforcement”.
Dutch government falls after budget talks
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Originally Posted by Treize
. Noboby dares to make any form of 'radical' choices, slash the extreme bureaucracy or do something in our own interest anymore.
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