The Dutch Don’t Like Austerity Either

The BBC reports on the latest government wiped out by the Austerians: Dutch government falls in budget crisis

Dutch Prime Minister Mark Rutte has tendered his government’s resignation to Queen Beatrix, paving the way for early elections.

His cabinet was plunged into crisis when Geert Wilders’ Freedom Party (PVV) quit talks aimed at slicing 16bn euros (£13.1bn) from the budget.

Mr Wilders refused to accept austerity demands to bring the budget deficit in line with EU rules.

His party was not part of the coalition but supported the minority government.

Dutch broadcaster Nos said Mr Rutte spent almost two hours on Monday afternoon at the queen’s palace in The Hague where he made the cabinet’s resignation official.
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The Dutch economy, the eurozone’s fifth largest, has survived the eurozone crisis relatively well with a national debt of around 65% of economic output but its projected budget deficit falls foul of new EU rules requiring eurozone governments to keep below 3% of GDP.

A recent forecast from the Netherlands’ Central Planning Bureau estimated that the country’s public deficit would rise to 4.7% of GDP.

The Netherlands has been asked to submit its budget measures to the European Commission by 30 April, although it is not clear how firm that deadline is. Since 5 March, the two coalition parties along with the Freedom Party have been trying to reach agreement on budget cuts before the deadline.

Mr Wilders, who was said to have stormed out of talks at the last minute, said the coalition’s proposals would harm economic growth and affect many people’s spending power. Socialist Party leader Emile Roemer said he too was not prepared to support the attempt to bring the budget deficit below 3% by 2013.

When Geert Wilders is the voice of common sense, you should know you have really failed to grasp reality.

As Greece, Ireland, and Spain have shown, austerity in a weak economy is the quickest way to drive that economy into recession.