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. "In the meanwhile, we in parliament will take responsibility for a careful budget in 2013," he said.
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 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. Christian Democrat leader Maxime Verhagen accused Wilders of
"political cowardice" for refusing to sign off on the cuts -- details of
which have not yet been released.
Wilders was happy to take the blame, saying he "would not accept
that the elderly in the Netherlands have to pay for nonsensical demands
from Brussels." He underlined that an accord would have been possible
had the coalition been less concerned with following European rules to
the letter. "We don't want to bow to Brussels," he said. "We don't want our pensioners to suffer for the sake of the dictators in Brussels."
Wilders has long been a staunch critic of the European Union,
opposing an EU constitution and last month suggesting the Netherlands
should return to its pre-euro currency, the guilder. Most mainstream
Dutch parties are generally pro-EU.
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. Rutte came to power in 2010 and slashed spending by (EURO)18
billion. But after the latest downturn, he needs to cut at least (EURO)9
billion ($12 billion) more, according to estimates by the Central Plan Bureau, the government's economic think-tank.
(...)
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