ONE AFTER THE fall of his government, the Netherland’s now-caretaker Prime Minister Mark Rutte addressed parliament to discuss interim budget cuts and schedule new elections – and to urge MPs to act “responsibly” in relation to the country’s economic problems.
Yesterday, Rutte’s minority government collapsed over internal disagreements about austerity measures and how to cut €16 billion from the national budget in order to meet deficit targets laid down by the EU.
Rutte admitted the talks had collapsed after his centre-right coalition, which has been in power since October 2010, failed to agree on budget adjustments with ally Geert Wilders who refused to do a deal.
However, despite the political turmoil, the Netherlands raised €2 billion at a bond auction today, a comfortable amount as the government had been hoping to raise between €1.5 and €2.5 billion.
It is feared that the government’s collapse could cost the Netherlands it triple-A credit rating; the country is currently one of the last in the eurozone to retain the top rating with the three major credit ratings agencies.
Last night, Moody’s said the political situation was “credit negative” but that the country had a stable outlook.
On 30 April, the Netherlands must present the European Commission with a 2013 preliminary budget outlining its plans to bring the the country’s projected budget deficit of 4.6 per cent of GDP to the EU limit of 3 per cent.