THE HAGUE, Netherlands: 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.
Opposition lawmakers say they are prepared to work with Rutte to draw up a 2013 budget. However, Diederik Samsom, leader of the opposition Labour Party, signaled he would not insist on bringing the Dutch deficit back in line with EU norms next year.
"As far as we are concerned, you don't have to reach 3 percent by 2013," he said.
Although the Netherlands has relatively low levels of national debt, its economy is in recession and it is expected to post a deficit of 4.6 percent in 2012.
The package Rutte had been negotiating with Wilders would have slashed foreign aid and hastened a planned increase in the retirement age to 66 from 65.
Those sound fairly sensible for a small country...
Wilders, who is publishing a book in the US next week about his struggle against Islam, said abruptly Saturday he could not support the package because it was unfriendly to the elderly.
He's a better agitator than he is a leader...
He's right about the Muslim issue and Israel, but he is a Socialist party heretic, with all that entails.
Yields on Dutch bonds were up 0.11 of a percent higher than they were before the weekend. Netherlands government bonds are trading around 2.35 percent for 10-year debt, about 0.6 percentage points more than Germany.
Ratings agency Fitch last week warned the Netherlands stands to lose its AAA credit rating depending on the outcome of the budget talks that failed Saturday. Central Bank President Knot has predicted Dutch interest rates will increase by around 1 percent if the country's rating is cut, making budget reform vital.
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Posted by: Steve White ||
04/24/2012 00:00 ||
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#1
Wilders would be a hypocrite if it was HE who had advocated the 3% limit. If the Dutch government, in a fit of euro-philism, had advocated the limit, but Wilders did not, then Wilders is off the hook and Kroes is trash-talking.
[Bloomberg] Francois Hollande, the winner of the first round of La Belle France's elections, said Europe's austerity drive fueled despair and created conditions for the record-high score for anti-euro National Front leader Marine Le Pen. It couldn't have anything to do with continuous assaults against European culture by large numbers of North African colonists...
Le Pen, the leader of the nationalist, anti-immigrant party, won 17.9 percent, or 6.4 million votes, surpassing poll estimates with the highest tally for the National Front created by her father Jean-Marie Le Pen in 1972. Hollande, the Socialist candidate, got 28.6 percent in the April 22 ballot, leaving him to face President Nicolas Sarkozy ...23rd and current President of the French Republic and ex officio Co-Prince of Andorra. Sarkozy is married to singer-songwriter Carla Bruni, who has a really nice birthday suit... in next month's runoff. Sarkozy won 27.2 percent.
"It's this austerity everywhere that brings desperation to people and leads them to vote for the far-right," Hollande said yesterday in a speech in Quimper, in Brittany, where the National Front almost doubled its score from 2007.
Europe's front against austerity has expanded in recent weeks after Spain struggled to meet European Union ...the successor to the Holy Roman Empire, only without the Hapsburgs and the nifty uniforms and the dancing... -imposed deficit targets, election campaigns in Greece faced anti- austerity rumblings and a revolt against extra spending cuts in the traditionally budget-conscious Netherlands propelled Prime Minister Mark Rutte's coalition toward an early breakup.
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Posted by: Fred ||
04/24/2012 00:00 ||
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#1
Europe is what happens when you try and implement an oxymoron.
You cannot have a viable political system where the (supposedly) sovereign entity, France, Spain, etc., do not have control over their own currency. It just won't work.
So, you either have to cede most sovereignty to the EU to go along with their control of the Euro. or you have to revert to the individual currencies.
No question that the elites want the former, effectively a United States of Europe where the central government has all the power and the regions get a few crumbs; less then our states have. Leaves the UK in an anamolous position cause they'll either have to leave the EU or join the euro.
In anycase all the central bankers of the various "countries" will have to devolve into one. That should provide a few laughs when it becomes apparent.
#2
""It's this austerity everywhere that brings desperation to people and leads them to vote for the far-right," Hollande said yesterday in a speech in Quimper, in Brittany, where the National Front almost doubled its score from 2007."
Ergo, responsible government leads people to vote for more responsible government?
#5
You cannot have a viable political system where the (supposedly) sovereign entity, France, Spain, etc., do not have control over their own currency.
Two solutions to that:
a) return currency controls to individual sovereign nations
or
b) impose a single sovereignty over all those countries
#6
Yep, the whole history of the EU dating back to the '20s was for the continent to be subsumed. Kinda had a little hiccup in the '30s & '40s but that served to accelerate the movement with the first treaty of the Coal & Steel Community circa 1950 rith on up to the present day.
Still may crumble at least around the edges due to trying to take on too much at once with all the countries...fall of USSR...etc.
We will see, but, the EU is not at all a democracy and was never so intended.
#7
Bingo, AlanC. But - the 20s? The EU is the fourth attempt to unite Europe. The first three were Charlemagne, Napoleon, and Hitler. Not sure why they thought this would work out any better.
#8
"Not sure why they thought this would work out any better."
Because of the definition of insanity, Random. :-(
Posted by: Barbara ||
04/24/2012 17:41 Comments ||
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#9
I said when the Germans abandoned the Deutschemark* that they'd regret it - looks like I was right. :-(
*Didn't much care about the other countries.
Posted by: Barbara ||
04/24/2012 17:43 Comments ||
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#10
Hell, many Germans regretted it at the time! So did the Dutch. Always getting swallowed by grand European projects.
To be fair, I'd say it's situational myopia. Like women who keep winding up with wife-beaters. They recognize the pattern, but not that their own decision-making is the problem. And, well, look at the US. We put Ogabe in charge and getting rid of him is not a given. We've fucked ourselves pretty good too, so I'm disinclined to accuse Europeans of insanity/stupidity these days.
#11
The Germans couldn't actually "regret" it (the people, that is) because they were never asked.
There would never have been a majority for that in Germany.
Eurocrats still try to convince the Germans that they benefitted from the Euro. Cheaper expots and all that.
They seemed to have a point. But Germany managed to export its stuff very well under a strong Deutschmark, and we're finding out now that many Euroland countries bought our stuff but couldn't afford to pay for it. We're paying off their debts they accumulated with buying our products (and corruption, of course).
Won't go on forever.
Posted by: European Conservative ||
04/24/2012 22:10 Comments ||
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#12
Agreed, EC. I make a sharp distinction between Europe's rulers, and the ruled.
Right, so the exports were purchased with a credit card, they now can't pay, and Germans are being handed the bill. On top of solidarity tax (if that is still in effect?); and if I understand correctly, Germany only recently (2009?) completed paying WWI reparations.
No, it won't go on forever - it can't. I'm surprised that Merkel remains so committed to The European Project. Being a physicist from the DDR, I expected her to recognize the folly of a centralized superstate. But I suppose suggesting the alternative - a return to the sovereign nation-state - is just too radical. Similar problem in the US.
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