Netherlands’ Politics Casts Cloud On Future EU Support

AMSTERDAM (Reuters) – The Netherlands, a core euro zone member, was drawn into Europe’s debt crisis at the weekend when the government failed to agree on budget cuts, making elections almost unavoidable and casting doubt on its support for future euro zone measures.

Prime Minister Mark Rutte, whose centre-right coalition has been in power since October 2010, said on Saturday that crucial talks on budget cuts had collapsed after his ally Geert Wilders refused to do a deal, and that new elections were inevitable.

In the short term, the government must seek support for budget cuts from the opposition parties.

But uncertainty over the makeup of a new government, and waning voter support for bailouts and austerity measures, raised questions over Dutch backing for a fiscal responsibility pact seen as crucial to helping Europe cope with its debt crisis.

The catalyst for the crisis was Wilders, who refused to agree to 14-to-16 billion euros ($18.5-$21.1 billion) of budget cuts needed to bring a bloated budget deficit under control.

Now the euro-skeptic, anti-immigration politician has threatened to fight his campaign on a European battleground.

“The Freedom Party benches are unanimously against Brussels diktats and the attack on our elderly,” Wilders tweeted on Sunday, later telling Dutch news agency ANP that Europe would be in “sharp focus” during any coming election campaign.

Wilders most recently has lobbied to jettison the euro and return to the guilder, the old Dutch currency, and he is against immigration not only of Muslims but also of Poles and other central and eastern European members of the EU – views that strike a chord with his supporters.

His Freedom Party had a pact to support Rutte’s minority government in parliament, giving it the majority to pass legislation, but after seven weeks of budget talks, Wilders suddenly backed out just when a deal appeared close.

His supporters are against budget cuts, particularly cuts in welfare, health and unemployment benefits.

“This was a package that would damage our economy over coming years and increase unemployment. And all that to meet a demand made by Brussels, accepted by the Liberals, of reaching a 3 percent deficit in 2013,” he said on Saturday.