Reported earlier in the Washington Times, that the Dutch Government is on the verge of collapse after disagreeing on austerity measures. The minority government was in discussion but Geert Wilders who is anti-EU was dead set against the cuts. This is a major embarrassment for the Dutch as they pushed for austerity in Greece knowing how harsh it was on the Greek people and knowing how damaging it was to the Greek economy.
THE HAGUE, Netherlands — The ruling Dutch minority government was on the brink of collapse Saturday after anti-EU lawmaker Geert Wilders torpedoed seven weeks of austerity talks, saying he would not cave in to budget demands from “dictators in Brussels.”
New national elections that will be a referendum on the Netherlands’ relationship with Europe and its ailing single currency are now all-but-certain.
But before Prime Minister can tender his resignation — possibly as early as Monday — he must consult with allies and opposition parties on how to run a caretaker government that will have to make important economic decisions in the coming weeks and months.
“Elections are the logical next step,” Rutte said.
Opposition leader Diederik Sansom of the Labor Party joined others across the political spectrum in calling for new elections as soon as possible.
Austerity talks began in early March after the Dutch economy sank into recession and forecasts showed the 2012 budget deficit will reach 4.6 percent — well above the 3 percent limit mandated by European rules. Dutch politicians have strongly demanded that Greece and other countries meet that target.
Rutte leads the free-market Liberal Party in a minority coalition with the center-right Christian Democrats with outside support from Wilders’ Freedom Party. The outspoken Wilders is widely known for his anti-Islam and anti-EU opinions, including calls for Greece to return to the drachma and the Netherlands to leave the euro.
Rutte said negotiations had been rounded off Friday to deliver a “balanced package” of cuts, but Wilders walked out after discussing the package with his Freedom Party.
Will their credit rating take a hit from this? Already it’s under pressure.
The collapse of talks could endanger the Netherlands’ coveted AAA credit rating and drive up its borrowing costs.
The Netherlands is one of only four nations using the euro that has the top rating, though it already is under review by rating agencies. Central Bank President Klaas Knot said last week borrowing rates would rise by 1 percent if the Netherlands’ ratings are cut.
Once considered one of Europe’s strongest economies, the Netherlands is suffering from high levels of personal debt, mostly mortgage related.