New elections in the Netherlands after the summer

POSTED: 04/23/12 8:38 PM

Wilders pulls the plug

GREAT BAY / THE HAGUE– St. Maarten will be confronted with the fourth Dutch Minister of Home Affairs and Kingdom Relations later this year after the Rutte-cabinet fell on Saturday. Parliamentary elections are expected to be held in September or October. The cabinet fell after Freedom Party-leader Geert Wilders withdrew his support for a package of austerity-measures worth more than €14 billion ($18.4 billion).

Liesbeth Spies, who succeeded Piet Hein Donner in December as minister, visited St. Maarten in February. Donner held the post since October 14, 2010. His predecessor was Ank Bijleveld-
Schouten. Spies may well have paid her only visit to St. Maarten in her capacity as a minister, given the dismal ratings of her party in political polls.

Rutte, Wilders and CDA-leader Maxime Verhagen negotiated for seven weeks behind closed doors about the measures that are necessary to bring the budget-deficit below the maximum of 3 percent demanded by the European Union.

Stef Blok and Sybrand van Haersma Buma, the faction-leaders of the VVD and the CDA, called upon opposition parties to help out. The Telegraaf reported yesterday that there is no parliamentary majority for meeting the European demands about the budget-deficit.  The Labor party, the socialist Party and GreenLeft all find that this can wait. Together with the Freedom Party they have a majority in the parliament.

Wilders pulled the plug on the negotiations about the austerity measures on Saturday shortly before three o’clock local Dutch time. Wilders argument is that the elderly would suffer too much loss of purchasing power. “I don’t want to let pensioners become the victim of these nonsensical European demands,” Wilders said.

VVD and CDA were astonished by Wilders’ decision, saying they had the impression they were close to an agreement. VVD-leader Blok said yesterday that Wilders had been called to order by his faction, but the Freedom Party leader denied this.

Because the so-called Catshuis-consultation broke down, the austerity measures will not be implemented for the time being, because an outgoing cabinet has no authority to establish new policies. Rutte will visit H.M. Queen Beatrix today to offer his cabinet’s resignation.

Among the now stalled austerity-measures were an increase of the low VAT-tariff from 6 to 7 percent, and the high tariff from 19 to 21 percent, combined with lower income tax in 2014 and 2015. A freeze on all salaries, also in the private sector, was also part of the package. The cabinet furthermore wanted to cut the budget for public broadcasting by €25 million ($33 million) next year, and another €50 million ($66 million) in 2014. NRC Handelsblad political editor Erik van der Walle wrote that there was also an agreement to cut development aid next year by €500 million ($660 million) and in the two years after that by another €750 million ($990 million).

If elections were held today the VVD would win 33 seats, two more than it currently has in the parliament. The Freedom Party would lose 5 seats and end up with 19; the CDA would lose almost half its support and fall from 21 to 11 seats. The Socialist Party would double up from 15 to 30 seats, while the revived Labor Party that struggled for months with low ratings, would win 24, 6 less than it has now. The poll-results are from Maurice de Hond.

The researcher also asked voters which parties should form the new government later this year. The biggest support (19 percent) is for a five-party coalition with the Labor Party, the Socialist Party, GreenLeft, D66, and the Christian Unions. Together these parties would hold 80 seats in the 150-seat parliament based on this weekend’s poll results. A new political adventure with VVD, CDA and Freedom Party has the support of only 8 percent of the participants in the poll.

Harrie Verbon, a professor in public finance at the University of Amsterdam told the Volkskrant that the austerity-measures the cabinet was negotiating “would not have been good for the Netherlands. Economist Sweder van Wijnbergen said in the same article that the fall of Rutte’s cabinet is the best that could happen. “We need a decisive government. We will not meet that 3 percent European standard, and the budget-deficit increases, but what is the alternative? This cabinet is weak, we knew that already, and now it appears that they have been sitting in the Catshuis for seven weeks staring at each other. Should this cabinet then be allowed to continue with even less support?”

With the 2013 budget in jeopardy, the deficit will increase to 4.6 percent next year. The potential consequences are diverse: fines from the European Union, higher interest on state bonds and the loss of the coveted triple A-rating in the financial markets.

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