Netherlands Other


Netherlands: Dutch government collapses on disagreement over budget cuts

April 24, 2012

The Dutch governing coalition dissolved on 21 April after Freedom Party leader Geert Wilders walked out from negotiations over new austerity measures aimed at meeting European deficit limits. As a consequence, Prime Minister Mark Rutte tendered his cabinet's resignation on 23 April. The right-wing Freedom Party had backed Rutte's government for the past 18 months, but refused to reform the pension system in order to meet the European Union deficit requirements. The austerity plan aimed at cutting EUR 14 billion from the 2013 budget, and included a slight rise in the value added tax, a freeze on civil servants' wages and cuts to both the health and development budgets. The Dutch queen called elections on 12 September, leaving the country with a caretaker government for more than four months. Despite the deadlock, opposition lawmakers expressed their willingness to work with Rutte. The 2013 budget needs to be cut by at least EUR 9.5 billion in order to meet the 3.0% of GDP required by the Maastricht criteria. Caretaker Finance Minister Jan Kees de Jager insisted that he intends to present a draft budget to Brussels by 30 April, as part of the EU's fiscal surveillance of member states. The Dutch central planning bureau forecasts the fiscal deficit to reach 4.6% of GDP this year and next under current conditions.


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