Monday, April 23, 2012

Dutch coalition offers to resign in budget cuts row

Dutch Prime Minister Mark Rutte tendered his government's resignation today in a crisis over budget cuts, creating a political vacuum in a country which strongly backed an EU fiscal treaty and lectured Greece on getting its finances in order.

Rutte said he had offered his minority coalition's resignation to Queen Beatrix after a split with the populist Freedom Party, which had backed his government for the past 18 months, opening the way for elections possibly as early as June.

Rutte said the Queen was considering the resignation offer and had asked the cabinet to keep working for the country's good. However, government ministers openly speculated that new elections would be needed to break the impasse.

Finance Minister Jan Kees de Jager, who has taken a tough line with euro zone "budget sinners" such as Greece, tried to reassure markets that the country was not about to ditch its commitment to good housekeeping.

"The Netherlands will retain its solid fiscal policy and will also show the market it will lower its deficit and also have a path of sustainable government finances," he said.

Within a week, the Netherlands is supposed to tell Brussels how it will cut its budget deficit next year to meet EU rules, and it then faces months of uncertainty before elections, with the possibility that they produce a eurosceptic government.