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Subscribe to RSSThe Dutch government, one of the most vocal critics of European countries failing to rein in their budgets, quit Monday after failing to agree on a plan to bring its own deficit in line with European Union rules.
The government information service announced Queen Beatrix had accepted the resignation of Prime Minister Mark Rutte and his Cabinet after a meeting in which Rutte told her talks on a new austerity package had failed over the weekend.
Rutte is to address parliament Tuesday to discuss interim measures to keep public finances in order and schedule new elections. No date for elections was immediately announced, but opposition lawmakers called for a vote as soon as possible.
The Dutch government collapse came a day after the first round election victory of France's soft-on-austerity socialist candidate Francois Hollande. It calls into question whether austerity policies that are causing trauma in countries such as Greece, Spain and Portugal can be enforced even in "core" European countries such as France — or the Netherlands, one of the few along with Germany to maintain an AAA credit rating.
Rutte's hopes to clinch a deal to cut the target below the EU's 3 percent target evaporated on Saturday, when his most important political ally, populist euroskeptic Geert Wilders walked out of the talks, saying a slavish adherence to European rules was foolish and would harm the Dutch economy.
One third of land in debt-ridden Greece is up for sale
That view is shared by some, such as the government's own Central Plan Bureau, and opposed by others, such as Dutch Central Bank President Klaas Knot.
"We don't want our pensioners to suffer for the sake of the dictators in Brussels," Wilders said.
Opposition lawmakers say they are prepared to work with Rutte to draw up a 2013 budget.
However, Diederik Samsom, leader of the opposition Labor Party, signaled he would not insist on bringing the Dutch deficit back in line with EU norms next year.
Although the Netherlands has relatively low levels of national debt, its economy is in recession and it is expected to post a deficit of 4.6 percent in 2012.
The package Rutte had been negotiating with Wilders would have slashed foreign aid and hastened a planned increase in the retirement age to 66 from 65.
Wilders, who is publishing a book in the U.S. next week about his struggle against Islam, said abruptly Saturday he could not support the package because it was unfriendly to the elderly.
Ratings agency Fitch last week warned the Netherlands stands to lose its AAA credit rating depending on the outcome of the budget talks that failed Saturday.
Central Bank President Knot has predicted Dutch interest rates will increase by around 1 percent if the country's rating is cut, making budget reform vital.
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All these counties have large welfare commitments, unemployment, medical, state pensions etc. They believe that they have to tax to pay for this, instead of allowing thier people to retain more of the hard earned money in their pockets and subsequently spending it, raising income from growth not making everyone huddle down.
A government tending towards tantrum should go. How lucky for the Dutch people these quitters have quit. Now a new elected government can sit in for the duration, make their decisions. Austerity, or drop out of the union, that is the question. Balance your budget or lose AAA, even in dinky Holland.
What a bunch of lousy choices, foisted on the public by cowardly govt officials who won't make the tough calls, or more accurately choices we've foisted upon ourselves by being too selfish to vote for the country's best interests instead of our own.
Of course Austerity will lead to economic pain! Compare that with having no economy at all when it collapses due to no one being willing to lend to it anymore. That's what Greece has been trying to avoid and we've all seen how painful that's been.
Or you can be like the US that controls its own currency and inflate your way out debt. How's that for screwing the elderly or anyone on a fixed income?
And why these lousy choices? Because we elect people who promise to give us what we want, not what the country needs. If we ran our budgets properly instead of pandering to various interest groups, we wouldn't be faced with any of this.
Term limits. And take the money out of politics.
Sounds a lot like the "Super Committee" we had going for awhile, doesn't it?
"Oh we can't come to an agreement so f*ck it!"
Agreed. Lobbyists and special interests are crashing our government with their constant demands, and we are letting them. Every bill written to curtail the abuse of industry is written by the industry itself to make it look like the government is being tough.
There hasn't been any real change in the government in 30 years
FrugalDemocrat: I wasn't really talking about lobbyists, although they are a large part of the problem. I was also thinking of us: Don't touch our Medicare, or Social Security, or raise taxes, or eliminate my deductions, or raise the retirement age, or any number of relatively small changes that could solve a lot of problems.
We complain about the corporations while giving no consideration to our own special interest group.
Frankly you lose all credibility when you don't include war spending reduction when orating about problem solving.
The defence dept. spending has doubled in the last ten years. Are you any safer?
AG99- Very good point and I completely agree, we are just as spoiled and the only time we are ok with reducing the deficit is when the money comes from someone else
I agree with Bored as well. It seems very hypocritical for the party that calls for smaller government and cost cutting to keep pushing higher military budgets
Oh, don't get me wrong, I'm all for reducing DoD as well. It's the biggest spender (slightly) than anything else. The military vote is right up there with AARP and others in adding to the problem, but it's a much smaller group than the public at large. I was listing out those programs that affect most everyone and that people scream the loudest about.
You guys can say what you want. But I am still a firm believer in bringing our jobs back home. In doing so you increase the tax base and increase revenue in to the government . We have what ??? Some 25 million people out of work now. That is a ton of tax money not cumming in to the government . F.I.C.A. and social security monies not being paid by these people also medi care and medi cade . Bring our jobs back and most of our problems will solve them selves ( but only if we can keep congresses hands out of the cookie jar.
bob
Agreed bob1/28,
End free trade and the jobs return. Its really that simple.
Wait a minute, didn't the Dutch support the Greek bailout ?
LOL, an EuroPIIgs Nation with financial problems helping another EuroPIIgs Nation to obtain a bailout. Time for the Dutch to severe ties with the Euro.
Sheeesh, and I thought we had major financial problems in the United States with Mr. Geithner and Mr. Bernanke at the helm of screwing things up. Wait a minute, the IMF's bailout pot of money is running out and they are going to ask the "member Nations" to increase the amount of funds. Here comes the printing presses again.
hopefully the dutch will take the side of wisdom and follow the same path as iceland.
the public should not be resposible for private debt of bankers bad choices and hopefully they will go after the bankers with civil and criminal charges as iceland did
Agreed. When will we take their lesson and stop the looting and star prosecuting?
lilbear68,
Now how, exactly is something like that going to work out for the Dutch? Every country that has followed the Keynesian economic model for the past 70 years is in the same shape; BROKE. The Every country is running a deficit (Spending more than they take in) so they have to BORROW in order to pay out the necessary entitlements. If they do as Iceland, who exactly will lend to them? If they can't borrow, they have no other choice than to print money with both hands. Then you have Zimbabwe or the Wiemar Republic of the 1930's . Do you care to explain how that will help anyone?
Much of the sovereign debt held by the Dutch and German banks (which is causing them trouble in the Netherlands) was purchased at the REQUEST of the EU Governments. In an attempt to stabilize the Euro and keep things afloat during the PIIGS Crisis, the individual governments pressured their banks to buy Greek, Spanish, Portuguese, Italian, and Irish debt instruments (Bonds and Promissory Notes). The Idea was to keep the PIIGS supported until they could get their houses in order; with Greece, it only exasperated the problem. Now, many of the Dutch banks are on the verge of under-capitalization. Care to tell me where that will lead? If you need a clue, look at US History regarding the Run on the banks and FDR's Bank Holiday.
chris, well for starters if you would read the history of how iceland was able to accomplish this it might give you some insight. do you agree that the common citizen is responsible for the private debt created by bankers bad choices?? there are many resources to read about icelands success. and what would have happened had they taken the path of the rest of those in the euro zone. naturally this is not a popular story for the lamestream media in europe to write about but the facts are available if you dig a lilbit
lilbear68
Try reading Michael Lewis' Boomerang: Travels Through the new Third World. But you leave out some major issues that make Iceland unique in this global debacle.
First, Iceland is a nation of only 300,000 (Raleigh, NC has a greater population than that). Add to it that they import "nice to have" things, but the "Must Haves" are available to them in their country. They don't import much fuel (they have Geothermal). They have lived on fish and cattle for about 1000 years, so they can continue doing it. They have been a fairly self sufficient island. That is why they can tell the banks and the Euro-zone to GFY; while it will hurt a bit, they can still survive.
I believe that they are PARTIALLY responsible if those debts and bad choices were made by and force upon them by the self serving politicians that were elected by the people on promises of "all this stuff we are giving you is free." If the banks made bad choices and bad decisions on their own (like in the case of the Housing Bubble, Savings & Loan Crisis, etc.) then THEY are responsible. If, on the other hand, they were ordered by the authority of their "Duty" the the government (who in most European countries hold and issue the bank charters), it is a different matter and you are comparing apples to Grapefruit.
As much as I hate banks,Bankers and any of the other practitioners of "usury", They have been a part of our world since the Knights Templar. Since the advent of the Federal Reserve, they have become so intertwined in our economy that to just let them fail would be disastrous to all. Unlike Iceland, the rest of the world is not even close to being self sufficient. If the economic systems fail and people cannot feed or clothe themselves like they did in the great depression, things will really get ugly in a hurry.
If they follow your advice and Iceland's Lead, what do you think will happen when the banking system (and related economies) hit the ground like ValuJet 592? You do know that we have raised several generations of people that believe corn grows in a "Green Giant Can"; right? How many people do you know that can fix their own cars or house, grow their own food, hunt for and butcher their own meat? We have created a society that is dependent on he government's stipend. What will happen if they don't get it, it isn't enough, or the food stores close? Do you think these people will just sit on the corner and cry or will they turn into an Athens style mob complete with Torches, Pitchforks, and a .45 Colt for everyone ? My money is 4 to 1 on the mob; that won't be pretty.
When people can't feed their kids, and it takes a wheelbarrow full of money to buy a loaf of bread, normally sane and rational people will start doing some really friggin' crazy things. It has been my experience that civilization is a veneer that we CHOOSE to wear. If you place people into the right (or wrong) situations and apply enough pressure, most of us will both quickly and cheerfully strip it off faster than the dancer at a nudie bar. Necessity, Hunger, and Survival are the most ruthless of our natural instincts and it won't take much for us to revert to the animals from whens we came. We will do whatever it takes to survive.
I served with the 3rd Marines in Quang Tri and Thua Thien provinces of Vietnam and have looked the 2nd horseman in the eyes before. I can promise you that you don't want to even consider going there. It has been almost 45 years since I acted in that "movie" and I am in no hurry to see a screening of anything close to it ever again.
Excellent model for the work ethic: "Work is hard, so we quit."
Sounds a bit like the "Obama Bucks" gang:
Now, if the US could get Obama to balance the budget, eliminate the deficit OR RESIGN!
Obama doesn't balance the budget, or make any spending decisions whatsoever. He proposes a budget, but it is up to congress to accept or reject portions and make their own
Interesting how socialism takes out all the dim bulbs,... reminds me of those old Christmas tree lights that would drive us nuts in the 60's. It was hard to find the weak link in a weak system.
Germany a SOCIALIST state is doing better then we are.
Because the German economy is based on manufacturing and production. Our economy is based on healthcare and emergency room visits.
Due to so called free trade and the contrived Global economy nonsense.
Socialism just doesn't work. You end up making a welfare/nanny state with little incentive to excel.
An interesting facet of this breaking story: the media has largely tried over the past few weeks to assert that Europe's economic woes have been largely contained within Greece and Spain.
Even Hans Brinker couldn't plug Holland's dike this time.
The media have been trying to convince us that everything is wonderful because that's what Obama believes too.
This is why the EU was such a bad idea. Shouldering other countries bad investments is causing havoc. In this case, it's making the Netherlands have to do things it does not want to do because of the agreement of the EU to keep their deficit under a certain number (3%, even though they are only at 4%), even though the Netherlands has been weathering the downturn fairly well and is the fifth largest economy in Europe. Austerity only benefits the bankers by socializing their losses and it's hurting Greece and Spain. I hope the Netherlands tells the EU to get screwed and does what's best for their country.
Like how the blue states carry the red states, yet they must allow the red state dogma and pay for it as well.
It is just the height of hypocrisy to watch red state pols on the floor of the congress rale against "socialism" all the while taking blue state cash.
Incredible!
No government? Does this mean riots? Is the Netherlands now an anarchist stronghold?
not in the Netherlands; they'll just wait it out smoking their weed ;)
Of course they would quit.
There's no money to pay them.
Just the latest example of political cowardice by spineless politicans serving there countries badly...not that we're much better. Not to worry, though. Forces beyond their control will settle the issue over time, one way or another...and most likely not in a manner the populace will like. Pay me now, or pay me later....but, eventually your going to pay me.
Mr. Johnston: Do you still beat your wife? The canary in the mine is already dead, and you're presenting arguments concerning whether the bird is actually a canary and the what the definition of is is. Your set piece is grossly misleading at best, but more likely just plain dishonest.
OK just a few points. First of all, the Netherlands are not broke, at least compared to most other nations in the world. As for the "socialism is a bad thing" agrument: nonsense; people in the Netherlands are better off than most in the world, even if they are stoned half the time :P As for the point that socialism does not invite people to exell: where do you think the machinery came from to make the chips and processors in the computer you are currently using? Otherwise, check how many medals they won at olympic games, or any other positive list of countries; you'll find them in the top 10 most of the time even though they have a population smaller than New York.
Whatever the case, many people here seem to jump to conclusions and just copy-paste their political mantras or preconceptions about Europe, socialism, Obama, w/e. Final note: considering the few allies the U.S. has left, a little more understanding and tollerance (there's a Duch value for you) would go a long way in keeping those allies.
Just my two cents, cheers.
Another one bites the dust. Let's offer a Nobel Prize to whoever can fix our Western world problem. Well, we might be in a cul-de-sac here, never mind.........
Forgive the debt or be slaves forever. We spent more than we brought in, we had willing participants (everybody) and willing bankers. I'm glad the Chinese are benefiting so much. bankers did pretty well too. let's gather our stuff, box it and send it back to China for the debt we owe them. and bring back our jobs fast. Foreign nations don't give us their jobs, except the military ones and we pay for it and we give them cash on top. If things don't change quickly the "American way of life" is over and say hello to the Global way of life, which is fairly established already.
@ Chris-382117 #4.4
Thank you for your service, and your now mature perspective. Your concern for the dire consequences are indeed real. While alarming, thank you for not being alarmist. It will get dicey though.
Like the US and China, the EU's socialist economy is in the grips of Industrial Ownership. The wealth of this ownership is now distributed beyond national borders -- leaving the cost-of-living (without the income) for national debt. Revolutions against governments will not be solutions. It will take UN laws and understandings to balance and reap the benefits of technology owned by this Industrial Ownership.
This will take a renewed Ludd Rebellion -- a fight for the commons.