Dutch opposition parties refuse to back budget cuts
Source: Agencies |
April 25, 2012, Wednesday
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THE biggest Dutch opposition parties said yesterday they would not back the prime minister's budget cuts, deepening a political crisis after the government lost the support of its main ally and collapsed.
Caretaker Dutch Prime Minister Mark Rutte appealed to a polarized Parliament yesterday to help him make painful budget cuts rather than let the country drift in political limbo until new elections.
Speaking publicly for the first time since he tendered his resignation on Monday, Rutte said the nation, long considered one of Europe's most fiscally responsible, has no time to waste.
"I stand here in the hope that parties in this chamber are prepared ... to work with the Cabinet to do what is necessary to pull the Netherlands through these difficult economic times in a responsible way," he told lawmakers.
Several opposition leaders rejected Rutte's appeal for help in getting his 14 to 16 billion euros savings package through.
In parliament yesterday, Socialist leader Emile Roemer said: "I understand that you have to bring finances in order but you cannot cut rigorously because it hurts the economy and people. Three percent is not feasible."
Rutte's 18-month old conservative coalition government collapsed on Monday after it failed to reach a deal on cutting its own budget deficit to meet the EU limits it had demanded of other countries.
The immediate question facing party leaders will be what budget statement they can allow Rutte to deliver to Brussels by April 30, a deadline for submitting a preliminary 2013 budget. The note must explain how the Netherlands plans to bring its projected 4.6 percent 2012 budget deficit below the 3 percent European limit.
The Netherlands has a privileged economic place in Europe, one of only four of the eurozone's 17 nations to have a coveted top ranked AAA credit rating, with national debt under 70 percent of GDP. However the economy is in recession and the government wants to reassure markets it is doing all it can to rein in spending and meet the EU deficit limit. Rating agencies have warned they are closely watching events in The Hague.
A credit downgrade would drive up borrowing costs for the government, further compounding the Dutch economic malaise.
So far, financial markets appear to be giving the Netherlands the benefit of the doubt: early yesterday the government was able to auction around 2 billion euros (US$2.6 billion) in bonds at highly reasonable rates, according to treasury spokesman Ben Feiertag.
The Netherlands is "not under market pressure" said International Monetary Fund fiscal policy expert Xavier Debrun.
Caretaker Dutch Prime Minister Mark Rutte appealed to a polarized Parliament yesterday to help him make painful budget cuts rather than let the country drift in political limbo until new elections.
Speaking publicly for the first time since he tendered his resignation on Monday, Rutte said the nation, long considered one of Europe's most fiscally responsible, has no time to waste.
"I stand here in the hope that parties in this chamber are prepared ... to work with the Cabinet to do what is necessary to pull the Netherlands through these difficult economic times in a responsible way," he told lawmakers.
Several opposition leaders rejected Rutte's appeal for help in getting his 14 to 16 billion euros savings package through.
In parliament yesterday, Socialist leader Emile Roemer said: "I understand that you have to bring finances in order but you cannot cut rigorously because it hurts the economy and people. Three percent is not feasible."
Rutte's 18-month old conservative coalition government collapsed on Monday after it failed to reach a deal on cutting its own budget deficit to meet the EU limits it had demanded of other countries.
The immediate question facing party leaders will be what budget statement they can allow Rutte to deliver to Brussels by April 30, a deadline for submitting a preliminary 2013 budget. The note must explain how the Netherlands plans to bring its projected 4.6 percent 2012 budget deficit below the 3 percent European limit.
The Netherlands has a privileged economic place in Europe, one of only four of the eurozone's 17 nations to have a coveted top ranked AAA credit rating, with national debt under 70 percent of GDP. However the economy is in recession and the government wants to reassure markets it is doing all it can to rein in spending and meet the EU deficit limit. Rating agencies have warned they are closely watching events in The Hague.
A credit downgrade would drive up borrowing costs for the government, further compounding the Dutch economic malaise.
So far, financial markets appear to be giving the Netherlands the benefit of the doubt: early yesterday the government was able to auction around 2 billion euros (US$2.6 billion) in bonds at highly reasonable rates, according to treasury spokesman Ben Feiertag.
The Netherlands is "not under market pressure" said International Monetary Fund fiscal policy expert Xavier Debrun.
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