The collapse of austerity talks between the minority government and anti-immigration PVV make it unlikely the Netherlands will meet the April 30 deadline to come up with a package of at least €15bn in spending cuts, commentators said on Sunday.
There are just nine days to go before the Netherlands should submit its plans to Brussels to cut the budget deficit to below 3%, in line with monetary union rules.
Although ministers and opposition parties say they will meet to discuss which of the €14bn-worth of plans can be salvaged, commentators say its is unlikely that much progress will be made ahead of new elections.
Finance minister Jan Kees de Jager arrived back in the Netherlands on Sunday after cutting short an International Monetary Fund meeting because of the crisis.
De Jager told the Telegraaf he still expects to be able to submit a 2013 budget to Brussels by the deadline.
The Netherlands, with its Triple A rating, has a reputation for financial discipline and that should be maintained, De Jager said.
Sybrand Haersma Buma, who leads the Christian Democrats in parliament, said he hoped the opposition parties would work with the CDA/VVD government to draw up a budget. The crisis needs solving and there is no time to waste, the MP told a television talk show.
However, any compromises on the 2013 budget are likely to be overshadowed by election campaigning. The leaders of the main opposition parties are united about the need for new elections as soon as possible – but that is unlikely to be before September because of Dutch electoral rules.
Labour, for example, has said it wants to raise €6bn through higher taxes on companies and high earners. It also wants to phase out the tax break on mortgages to 30%.
The left-wing greens Groenlinks, by contrast, want a switch towards a tax on pollution. Both parties do not see the need for the Netherlands to duck under the 3% budget deficit limit next year, as the minority government insists.
An added complication is the fact that many of the measures agreed by the government to cut spending by €18bn when it came to power in October 2010 have not yet been implemented. Many of them will now be declared ‘controversial’ once the cabinet has officially fallen and becomes a caretaker administration.
Several measures, such as cuts in spending on special education and help for the handicapped, are likely to be scrapped, further adding to the pressure on the budget deficit.
Other measures, such as further limits on dual nationality, are also likely to disappear.
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