Persian Realm

Dutch Prime Minister Mark Rutte resigned Monday after a far-right party withdrew its support for his government, a government spokesman said. (See Related News) 

The move may clear the way for early elections in the Netherlands, possibly as soon as this summer, the government said. The resignation came after the far-right party withdrew from talks about an austerity package worth €14.2 billion, the equivalent of $18.6 billion, according to a news report reprinted on a parliamentary website.

Lawmakers are scheduled to meet Tuesday to decide how to go forward.

Queen Beatrix asked Rutte and his ministers to stay in their positions until new elections.

Rutte's government had depended on the support of Geert Wilders' Party for Freedom, which came in third in parliamentary elections two years ago.

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US Relations With Netherlands

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FAR RIGHT GOES MAINSTREAM IN NETHERLANDS

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Dutch far-right lawmaker Wilders acquitted (AFP, Jun 23, 2011):

(NOTE: To Watch Double Click Here)

The Rise of The Far Right Across Europe: The Netherlands :

Geert Wilders is the leader of the Dutch Party for Freedom who wants Islam banned in Europe.

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DUTCH GOVERNMENT FALLS IN BUDGET CRISIS

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Dutch government falls in budget crisis (bbc)

Dutch Prime Minister Mark Rutte has tendered his government's resignation to Queen Beatrix, paving the way for early elections.

The government was plunged into crisis when Geert Wilders' Freedom Party (PVV) quit talks aimed at slicing 16bn euros (£13.1bn) from the budget.

Mr Wilders said he would not accept austerity demands to bring the budget deficit in line with EU rules.

His party was not part of the coalition but supported the minority government.

Dutch broadcaster Nos said Mr Rutte spent almost two hours on Monday afternoon at the queen's palace in The Hague where he made the cabinet's resignation official.

Speaking after a cabinet meeting in the morning involving Mr Rutte's liberal VVD and the Christian Democrats (CDA), Finance Minister Jan Kees de Jager said they would "show the financial market and Dutch people that we can also put forward a solid financial policy".

AAA status

Since 5 March, the two coalition parties along with the Freedom Party have been trying to reach agreement on budget cuts. A recent forecast from the Netherlands' Central Planning Bureau estimated that the country's 2013 public deficit would rise to 4.7% of GDP, well above the 3% EU target.

The Netherlands has been asked to submit its budget measures to the European Commission by 30 April, although it is not clear how firm that deadline is.

Mr Wilders said the coalition's proposals would harm economic growth and affect many people's spending power. Socialist Party leader Emile Roemer said he too was not prepared to support the attempt to bring the budget deficit below 3% by 2013.

But there are fears that the failure of the budget talks could harm the Netherlands' prized AAA credit rating status and the low yield on government bonds.

The BBC's Anna Holligan in The Hague says that many are now asking if the Netherlands cannot balance its books without the government collapsing, then which government can; and where it leaves the EU fiscal compact, aimed at enforcing budget discipline.

Economic Affairs Minister and CDA leader Maxime Verhagen said on his Twitter feed earlier on Monday that the main concern was "how, on the way to elections, we can keep the economy and finances on the rails".

Dutch daily NRC Handelsblad reported that confidence in the Netherlands had already fallen on the financial markets on Monday, with the gap widening between Dutch and German government bonds.

Mr Rutte's government lasted just 558 days. Only three other Dutch administrations since World War II have been in office for shorter periods, Dutch news agency ANP says.

A parliamentary debate on the Dutch political crisis is expected to take place on Tuesday afternoon. A key question facing the political parties is whether to hold general elections before or after the summer recess.

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