Dutch deficit talks collapse

Anti-eu lawmaker foils deal; new elections expected

THE HAGUE, Netherlands — The ruling Dutch minority government was on the brink of collapse Saturday after antiEuropean Union lawmaker Geert Wilders torpedoed seven weeks of austerity talks, saying he would not cave in to budget demands from “dictators in Brussels.”

New national elections that will be a referendum on the Netherlands’ relationship with Europe and its ailing single currency are now all but certain.

But before Prime Minister Mark Rutte can tender his resignation, possibly as early as Monday, he must consult with allies and opposition parties on how to run a caretaker government that will have to make important economic decisions in the coming weeks and months.

“Elections are the logical next step,” Rutte said.

Opposition leader Diederik Sansom of the Labor Party joined others across the political spectrum in calling for new elections as soon as possible.

“In the meanwhile, we in Parliament will take responsibility for a careful budget in 2013,” he said.

Austerity talks began in early March after the Dutch economy sank into recession and forecasts showed the 2012 budget deficit will reach 4.6 percent, well above the 3 percent limit mandated by European rules. Dutch politicians have strongly demanded that Greece and other countries meet that target.

Rutte leads the free-market Liberal Party in a minority coalition with the center-right Christian Democrats with outside support from Wilders’ Freedom Party. Wilders is widely known for his anti-islam and anti-eu opinions, including calls for Greece to return to the drachma and the Netherlands to leave the euro.

Rutte said negotiations had been rounded off Friday to deliver a “balanced package” of cuts, but Wilders walked out after discussing the package with his Freedom Party.

Christian Democrat leader Maxime Verhagen accused Wilders of “political cowardice” for refusing to sign off on the cuts — details of which have not yet been released.

Wilders was happy to take the blame, saying he “would not accept that the elderly in the Netherlands have to pay for nonsensical demands from Brussels.” He underlined that an accord would have been possible had the coalition been less concerned with following European rules to the letter.

Wilders has long been a staunch critic of the European Union, opposing an EU constitution and last month suggesting the Netherlands should return to its pre-euro currency, the guilder. Most mainstream Dutch parties are generally pro-eu.

The Netherlands is one of only four nations using the euro that has the top AAA credit rating, though it already is under review by rating agencies. Central Bank President Klaas Knot said earlier this month that borrowing rates would rise by 1 percent if the Netherlands’ ratings are cut.

Once considered one of Europe’s strongest economies, the Netherlands is suffering from high levels of personal debt, mostly mortgage-related.

Rutte rose to power in 2010 and slashed spending by $24 billion. But after the latest downturn, he needs to cut at least $12 billion more, according to estimates by the Central Plan Bureau, the government’s economic think-tank.

His administration was cobbled together after months of talks after a 2010 election that returned a splintered Parliament. Few analysts expected the coalition helped by Wilders to achieve a one-vote majority in Parliament to survive a full four-year term.

The collapse came just days before Wilders is to fly to the United States to launch his new book, titled Marked for Death. Islam’s War Against the West and Me.

Wilders did not return calls seeking comment.