Dutch government quits after austerity talks fail

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THE HAGUE — The Dutch government, one of the most vocal critics of European countries failing to rein in their budgets, quit Monday after failing to agree on a plan to bring its own deficit in line with EU rules.

The government information service announced Queen Beatrix had accepted the resignation of Prime Minister Mark Rutte and his Cabinet after a meeting in which Rutte told her talks on a new austerity package had failed over the weekend.

Rutte is to address parliament Tuesday to discuss interim measures to keep public finances in order and schedule new elections. No date for elections was immediately announced, but opposition lawmakers called for a vote as soon as possible.

The Dutch government collapse came a day after the first round election victory of France’s soft-on-austerity socialist candidate Francois Hollande. It calls into question whether austerity policies that are causing trauma in countries such as Greece, Spain and Portugal can be enforced even in “core” European countries such as France — or the Netherlands, one of the few along with Germany to maintain an AAA credit rating.

Rutte’s hopes to clinch a deal to cut the target below the EU’s 3 percent target evaporated on Saturday, when his most important political ally, populist euroskeptic Geert Wilders walked out of the talks, saying a slavish adherence to European rules was foolish and would harm the Dutch economy.

That view is shared by some, such as the government’s own Central Plan Bureau, and opposed by others, such as Dutch Central Bank President Klaas Knot.

“We don’t want our pensioners to suffer for the sake of the dictators in Brussels,” Wilders said.

European Commissioner Neelie Kroes called Wilders a hypocrite, since the Netherlands itself, along with Germany, had been one of the loudest in demanding Brussels adopt 3 percent deficit limit in the first place.

“Pointing to Brussels now is dumb, it’s untrue, it’s distracting, and it doesn’t solve anything,” said Kroes, who is a member of Rutte’s free-market VVD party.

A spokesman for the German finance ministry said that despite developments over the weekend, approval for Europe’s plan to tackle government debt by cutting spending is actually “increasing.” He didn’t give evidence backing that assertion.

“We should not now simply let ourselves be thrown off track by daily developments,” Martin Kotthaus told reporters in Berlin.

He said Europe’s recent reforms had been well-received at a weekend meeting of the International Monetary Fund. “The road is right; Europe has done its homework,” he said.

Finance Minister Jan Kees de Jager insisted he still plans to submit an outline budget to Brussels by April 30, as mandated by European rules.

He said he was optimistic about prospects for agreeing some cuts with opposition parties in Parliament.

“We’ll show the financial markets, in consultation with Parliament, that the Netherlands‘ decades-long budgetary discipline will remain,” he told reporters after a brief Cabinet meeting ahead of the resignation.

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