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Netherlands PM and cabinet resign

Right-wing Dutch Prime Minister Mark Rutte and his cabinet resigned on Monday after failing to reach agreement on reducing the country's budget, paving the way for new elections.


AFP - Dutch Prime Minister Mark Rutte's liberal government resigned on Monday after the collapse of its parliamentary partnership with a far-right party over austerity measures.

The premier, who has faced mounting pressure for weeks over demands that he bring the budget deficit within European Union lines, tendered his cabinet's resignation at a two-hour afternoon meeting with Queen Beatrix at her Hague palace.

The turmoil has raised fears that the Netherlands' gold plated triple A credit rating could be in danger. It is one of only four eurozone countries to still retain AAA status among the three main credit rating agencies.

After Rutte left the palace, the Dutch government's information service said in a statement: "Prime Minister Mark Rutte has offered to her Majesty the Queen the resignation of all ministers and deputy ministers with immediate effect."

"The Queen is considering the resignation, but has asked all ministers and deputy ministers to continue to do everything that is necessary in the interests of the kingdom," the statement added.

The resignation had been widely expected since the weekend when Rutte acknowledged that a rift with anti-Islam politician Geert Wilders' Freedom Party would likely lead to early elections, otherwise due in May 2015.

Although not part of the ruling coalition, Wilders' party had effectively guaranteed the government's majority for the last 18 months by agreeing to support it in parliament.

That arrangement came to an abrupt halt at the weekend when talks on a new package of austerity measures foundered.

A debate has now been scheduled for 2.00 pm (1200 GMT) on Tuesday before the Lower House in which Rutte is expected to address MPs.

"The ball is now in parliament's court," Finance Minister Jan Kees de Jager told reporters, adding that he hoped to have "more clarity" on Tuesday on the austerity package, for which Brussels gave an April 30 deadline.

Rutte's liberal VVD party, its coalition partner the Christian Democrats and Wilders' Freedom Party had been negotiating on a near-daily basis, in private, for seven weeks but divisions were made public when Wilders walked out on Saturday.

Rutte, Verhagen and Wilders had held near daily talks at the premier's official Catshuis residence in a bid to reach agreement on how to cut 16 billion euros (U$21 billion) from the budget, which stood at 4.7 percent of gross domestic product for 2011.

The EU's deficit ceiling is three percent of GDP.

The talks had been in their final stages when Wilders dropped his political bombshell and the Dutch press said on Monday the country was still in shock.

A visibly upset Rutte told reporters Saturday: "I have to inform you today that the three parties have failed to come to common answers."

Elections now seemed likely, he added.

The austerity package at the centre of the row included a slight raise in Value-Added Tax (VAT), a freeze on civil servants' wages and a cut in spending in both the health and development aid sectors.

"The plan is not in the interest of (Freedom Party) voters," Wilders announced at a press conference, held at the same time on Saturday afternoon.

"We cannot live up to the demands Brussels is putting on us. Money is being taken from the wallets of pensioners."

"We remain confident that the Dutch government will continue its efforts to adopt measures, not to please Brussels or win votes in an election, but because this is beneficial to the country's economy and to its citizens," Amadeu Altafaj, spokesman for European Commissionner for Economic and Financial Affairs Olli Rehn said in Brussels.

Rutte's government was sworn in in October 2010 following the fall of the then prime minister Jan Peter Balkenende in February that year in a dispute over continued military support to NATO forces in Afghanistan.

Wilders' eurosceptic party support had ensured that Rutte's coalition had a one seat majority in the 150-seat parliament up until March 21 when one of its deputies resigned.


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