Tuesday 24 April 2012

Rutte's Dutch government falls

The Dutch government has collapsed with the minority Liberal (VVD) - Christian Democrat (CDA) coalition government unable to agree an austerity budget with the far-right PVV led by Geert Wilders. The so-called Gedoogcoalitie ("Tolerance Coalition") relied on the votes of the anti-Islamic Partij voor Vrijheid (Party for Freedom) and had been discussing the budget, which would have delivered around €16 billion in cuts to bring the Netherlands into line with the EU's 3% deficit rule, when Wilders stormed out at the last moment.

Wilders said (from De Volkskrant):
"Ik accepteer niet dat ouderen moeten betalen voor onzinnige Brusselse eisen. Als ik hier ja tegen had gezegd, had ik de kiezers met het schaamrood op de kaken tegemoet moeten treden.

['I do not accept that the elderly must pay for Brussels' nonsensical rules. If I had agreed (to the budget), I would have to face the voters with shame' (own translation)]"
It seems odd that Wilders has decided to pull the plug on the government now since his PVV has gone down in the polls recently while the party of the Dutch PM, the right-wing liberal VVD, has been doing well in the polls. However the Socialist Party has overtaken the Labour Party in the polls, and is against the 3% rule, so perhaps Wilders has calculated that by avoiding endorsing the austerity measures (and campaigning on a more populist anti-EU line) will be better for him and the PVV in the long run, rather than buying into the establishment and damaging the PVV's populist appeal (where the SP might be a challenger in an anti-EU austerity campaign at a later date).

In any case the fragility of the Dutch government in adopting austerity measures while its economy has been performing comparatively well in Eurozone terms strikes a strange image. This is, after all, the Netherlands that has waged its finger at other Eurozone countries and told them to fix their budgets. Even the Commission has picked up on this theme:

"For their part, EU commission spokespeople retorted by saying the rules were not invented in their institution, but instead agreed among EU governments in meetings chaired by no other than the Dutch authorities. "The three-percent target comes from the Stability and Growth Pact agreed in Amsterdam in June 1997, under the Dutch EU presidency. It is perhaps good to remind everyone the history of the deficit target," commission spokesman Olivier Bailly said during a press conference."

For the near future it doesn't look like the Dutch political scene will simplify in terms of political parties any time soon, so a certain level of instability might remain even after elections...

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