Dutch Government Near Collapse The Dutch government’s failure to reach an agreement in talks to achieve tough spending cuts could see ratings agencies cut the country’s prized AAA-rating and nervous investors push up the country’s borrowing costs, and it will also have wider implications for the euro zone as a whole, analysts said on Monday. Dennis Flaherty / Getty Images Amsterdam, the Netherlands Prime Minister Mark Rutte will meet the Dutch queen on Monday afternoon to tender the government’s resignation, Dutch broadcaster RTL reported. Dutch Finance Minister Jan-Kees de Jager sought to reassure investors on Monday, telling CNBC in The Hague that the Netherlands had always displayed budget discipline and would continue to do so. "The perception of financial markets is always important...and that's why I also have the message for financial markets that for decades the Netherlands have shown a solid fiscal budgetary policy and this will not change. In any government we have seen in the past we have seen solid policy and this will remain in the future," de Jager said. The talks between the Dutch multi-party coalition government and the right-wing “Freedom Party,” or PVV, which supports it in parliament, dragged on for seven weeks. On Saturday, Prime Minister Mark Rutte announced the talks had collapsed and blamed PVV leader Geert Wilders for the failed negotiations. The spread between Dutch and benchmark German government bonds – the premium investors demand in order to hold Dutch debt rather than German paper – widened to a 3-year high on Monday, and the cost of insuring Dutch government debt against default shot up, hitting a high not seen since January. The AEX index [.AEX 301.46 -7.74 (-2.5%) ] of blue chip stocks traded lower on Monday. “With Saturday’s decision, it looks likely that new elections will be announced shortly,” Carsten Brzeski, senior economist at ING, said on Monday. Alastair Newton, political analyst at Nomura, said there may still be a possibility of an agreement; but, if so, “it looks to be a slim one at best given that PVV leader Geert Wilders has already openly called for elections.” The country has committed to bringing its budget deficit back to the 3 percent limit prescribed by the EU, from 4.7 percent in 2011, but Brzeski said there no longer appeared to be a political majority to bring the deficit to 3 percent next year. "We have to talk to the parliament about the circumstances we are in now," de Jager said, stressing that the Netherlands had for decades shown a solid fiscal. "And we have shown also in difficult circumstances that we will enter a budget that is solid, that is sustainable and that is also for the long term a good budget," de Jager said. Newton also pointed out that the main left-of-center opposition party, the PvdA, had already called for the Netherlands to seek a derogation, or partial revocation of a law, from the 3 percent target. That, along with developments in France where President Sarkozy’s socialist challenger Francois Hollande has vowed to roll back certain deficit-cutting measures, could mark the beginning of a change in euro zone crisis management, he said. “It should not be excluded that we could see a repetition of the 2002-2004 episode when the fiscal rules were changed after the biggest euro zone countries had breached them,” Brzeski said. http://www.cnbc.com/id/47140237 I remember warning Janpor about the shaky financial situation of EU member nations. He seemed to think that the US would fall first, but that does not seem to be the case. Europe must reject socialism, reject progressive politicians, and use capitalism to crawl out of the socialist debt hole. I wish the sober, sane Europeans the best. _
I've debated for years with Dutch people I know about how some of their social programs can't continue. You just can't keep taking from the productive to give to the unproductive. Eventually the productive move or stop producing
How's the USA method working out for ya? Seriously, this is only news because the government will or has step down, which happens all the time here. I've lost count of how many times the coalition has broken and we've not ahd a government for a while.
Lets also remember that it was Gert Wilders (the darling of the US xenophobic right) who caused this by refusing to buy into the austerity measures.. http://www.bbc.co.uk/news/world-europe-17811509
This is the kind of propaganda that insists there are no alternatives to programmes of austerity and the right-wing ideology that underpins it. It's bogus.
I don't know how much of an effect this has on the rest of the Netherlands, but I know there are some drug addiction problems in Amsterdam. For all practical purposes, a lot of drugs are decriminalized there, and Amsterdam has a reputation for being a place where tourists can easily find cheap drugs. Locals have gotten a bit tired of this, but I'm not sure how this problem can be solved. On the one hand, outright decriminalization of all drugs has worked really well for Portugal. Their economy isn't doing too well, but drug related crimes are way down. The Netherlands could follow suit, but then again, I've heard that their policies on drugs are somewhat similar already.
Well cannabis is de-criminalised but nothing else. How hard the police, police other drugs is of course another matter. The main problem is that behind the scenes, cannabis is imported and grown by hard core criminals. The better option would be to legalise weed and take it away from criminals.
Yeah, legalization does seem like the best move -- along with decriminalizing harder stuff. To be honest, I'm surprised they haven't done this already. The Netherlands usually seems ahead of the curve in terms of social policies.
What a over reaction. A nation loses a Rating system, very few even understand and apprently it is going to collaspe. If that was true, then half the planet should have collasped after the banking crisis including the usa. As the AAA rating was a joke at that point. As the debt levels were horrible.
This is true. The ratings agencies themselves lost all credibility after the crap they pulled before the real estate crash. They've shown that bribery is one of the surer ways to preserve a AAA rating.
That doesn't make sense whatsoever. Belgium, which has a Socialist PM (the first that I know from the top of my head in about 60 years), was able to put in place far greater austerity than the Netherlands was doing. The Netherlands, who by the way, were being ruled by a Conservative Cabinet (CDA-VVD) with support from Geert Wilders' PVV! In effect, it was Wilders who pulled the plug. => Righties can't get the job done, as always.
