Dutch Prime Minister Mark Rutte has resigned after talks to agree a new austerity package failed over the weekend.
The coalition collapsed after Rutte’s political ally, eurosceptic Geert Wilders, walked out claiming that to reduce the Dutch deficit to 3 per cent in line with EU rules would harm the country’s economy.
Current Finance Minister Jan Kees De Yeger fully supports the austerity moves:
“I am convinced that it is in the best interest of the Netherlands, that with the various minorities we can find the support and adopt the measures for solid public finances.”
Queen Beatrix has asked Rutte and his cabinet to stay on in a caretaker capacity in the hope a deal can be thrashed out.
The EU continues to stand by the The Stability and Growth pact.
Dutch levels of debt are relatively low, yet its economy is in recession and is expected to post a 4.6 per cent deficit this year.
Ratings agency Fitch has warned the Netherlands that it risked losing its triple A credit rating if the austerity talks fell through.
The Dutch Central Bank President Klaas Knot has said if the country’s rating is cut interest rates will rise by 1 per cent.