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Dutch cabinet resigns over budget cuts

Dutch Prime Minister Mark Rutte tenders his government's resignation in a crisis over budget cuts, creating a political vacuum in the country.

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The Dutch Prime Minister has resigned after European Union demands for budget cuts to bring the Netherlands into line with euro spending rules caused the collapse of his government.

Elections as early as June 27 are likely to become a popular vote on EU-imposed austerity measures after the fall of a government that over the past year strongly backed the eurozone's fiscal union treaty and urged that Greece be stripped of sovereignty for falling behind with its own programme of spending cuts.

Mark Rutte quit after his fragile liberal-conservative coalition government, which has no parliamentary majority, fell apart at the weekend when the far-Right Freedom Party walked out of talks to implement €14.5 billion in cuts.

The Dutch Prime Minister, Mark Rutte, leaves the royal palace Huis ten Bosch after handing in his resignation to Queen Beatrix in The Hague.

The Dutch Prime Minister, Mark Rutte, leaves the royal palace Huis ten Bosch after handing in his resignation to Queen Beatrix in The Hague. Photo: AP/Peter Dejong

"The government now knows that it is no longer sufficiently assured of the necessary parliamentary support to do what is necessary for our national economy," he said in his resignation letter to Queen Beatrix.

The leader of the pro-European opposition Labour Party, Diederik Samsom, accused Mr Rutte of "dropping the ball at the worst possible moment" and demanded snap elections.

The impasse in one of the euro's last remaining countries to have a AAA credit rating comes as financial markets have been jolted by the prospect of an anti-austerity Socialist French president and high Spanish banking debt threatens to reignite the single currency's debt crisis.

The vote will call into question whether eurozone austerity policies that have triggered the fall of governments and the rise of technocratic administrations in "peripheral" southern Europe can even be enforced in "core" northern European countries such as the Netherlands and France.

The Dutch crisis came after Geert Wilders, the leader of the Freedom Party, withdrew support for Mr Rutte's minority Liberal and Christian Democrat government, after accusing it of bowing to Brussels demands to "bleed" the people.

The decision by Mr Wilders, whose anti-Islam party has switched its focus to campaign against the EU, came as Dutch opinion polls on Sunday suggested that 57 per cent of voters opposed the cuts.

The European Commission yesterday repeated its demand for the Dutch government to submit measures to balance the budget in line with euro spending rules to Brussels within nine days.

"The commission trusts that the Dutch government will continue to seek a budget solution," said a spokesman.

"Governments change but commitments on behalf of states cannot be changed without discussion with European partners."

Telegraph, London