D66 and CDA agree deal with Pro to save budget, VVD frozen out

Coalition parties D66 and CDA have agreed an eleventh-hour deal with the left-wing Pro to break the deadlock in the Dutch budget talks.

The opposition party announced an amendment to raise an extra €1 billion in taxes on assets and savings, shortly after a 2pm deadline for changes to the cabinet’s tax plan expired.

The third party in the minority government, the right-wing liberal VVD, is expected to vote against the amendment, but enough minor parties are likely to support it to ensure a majority in the Lower House.

Prime minister Rob Jetten has cancelled a trip to Dublin for an EU leaders’ summit so he can attend an extra debate on the budget scheduled for Thursday morning.

The VVD has not responded to the announcement on the deal, but will now have to decided whether to accept the amended budget or withdraw its support altogether, which would trigger a cabinet collapse.

The amendment is a watered-down version of the original plan, tabled by Pro and pro-European party Volt, to raise an extra €1.5 billion by creating a new top tax rate for savers and investors with assets of more than €1.3 million. D66 and CDA described that proposal as “too coarse”.

The updated version will also bring an increase in tax on inheritance and cash gifts, and a pledge to crack down on tax avoidance schemes.

Millionaires’ tax

“This is a breakthrough,” said Pro party leader Jesse Klaver. “In the last few days we have held talks to bring about a compromise to make the Netherlands fairer. If this plan is accepted, the Netherlands will have a millionaires’ tax.”

The VVD was not involved in the negotiations, Klaver added. “We have talked to D66 and CDA. If you want to know if the VVD support it, you’ll have to ask them.”

Earlier the VVD said it was “unthinkable” it could vote for the amendment in its original form, with MP Wendy van Eijk saying the plan crossed her party’s “pain threshold” and was “bad for the Netherlands”.

Now the deadline to submit amendments has passed, the VVD will have to decide whether it can still support the budget with the wealth tax included. If not, it will mean the end of the coalition.

On Tuesday parliament voted for a motion calling on the cabinet to explore alternative coalitions before it decides to call early elections, in an attempt to prevent the third general election in just over three years.

If an election is called, it is expected to take place in March. In the meantime a caretaker government would have to try to cobble together a majority in parliament for a new budget plan.