* Rutte needs small parties to get budget cuts through
* Acting PM favours September elections
* Opposition say austerity will hurt Dutch
By Gilbert Kreijger and Thomas Escritt
THE HAGUE, April 24 The biggest Dutch opposition
parties refused on Tuesday to back austerity cuts needed to meet
EU budget targets after the government fell, deepening the
crisis in a nation probably facing a long period of uncertainty
Prime Minister Mark Rutte, whose minority government
collapsed on Monday, must now turn to a clutch of tiny parties
for help if he is to have any chance of forcing his plan for 14
to 16 billion euros in budget cuts through parliament.
With doubts growing across Europe about the price of
austerity, parties t o Rutte's left said trying to meet the
European Union's deficit target would hurt the economy and the
To Rutte's right, Freedom Party leader Geert Wilders - who
brought down the c oalition by refusing to support the cuts -
declared that the elections would be a referendum on the EU and
Rutte, who remains acting premier , appealed to parliament
for support in striking a deal on cutting the budget deficit to
the EU's target at three percent of annual economic output.
The Dutch economy, traditionally one of Europe's strongest,
was not in good shape, he told lawmakers, adding that he
favoured waiting until September before holding elections.
"The problems are serious, the economy is stalling,
employment is under pressure and government debt is growing
faster than the Netherlands can afford," he said. "Those are the
facts and nobody can run away from them. I'm standing here
without pretences, it is up to parliament and the voters."
Rutte's appeal drew no sympathy from the major opposition
parties. "I understand that you have to bring finances in order
but you cannot cut rigorously because it hurts the economy and
people. Three percent is not feasible," Socialist leader Emile
Roemer told parliament.
The centre-right government tendered its resignation on
Monday after only 18 months in power, worrying financial
markets. Rutte's two-party coalition had relied on Wilders to
get legislation through parliament, even though the Freedom
Party remained outside the government.
Wilders withdrew that support at the weekend after seven
weeks of negotiations on the extra budget cuts, without which
the deficit is forecast to overshoot the EU target next year at
4.6 percent of gross domestic product.
Rutte said he must submit his budget plan to the European
Commission by April 30, meaning he has less than a week to find
backers among the smaller opposition parties in parliament.
His coalition of VVD Liberals and CDA Christian Democrats
has 52 seats in the 150 member parliament, so he needs to win
the backing of at least 24 opposition lawmakers.
The Dutch parliament is fragmented. It has 10 parties,
including the Party for the Animals, plus one independent but
opposition members may be reluctant to sign up to unpopular
austerity measures before the elections.
Despite the crisis, the state debt agency held a successful
sale of government debt on Tuesday and bonds rallied.
Dutch debt is proportionately below the euro zone average at
about 65 percent of GDP and its budget deficit is modest
compared with those of many of its peers.
However, the fact that even one of the best-managed euro
zone economies is struggling to meet EU targets underlines the
gravity of the bloc's troubles, and investors are watching
closely for any sign that the Dutch crisis is getting worse.
Rutte played down talk of elections as early as June,
suggesting the nation may have to wait five months for a vote.
"There is no automatic majority to have elections before the
summer. Weighing all sides I come to September 12," he said,
adding that the cabinet was expected to make a decision on the
election date on Friday.
The euro zone's fifth-largest economy has been a haven of
stability during the regional debt crisis and its officials have
criticised countries struggling to get their budgets in order,
Wilders said he was fed up with demands from Brussels for
cuts and funding for the European Stability Mechanism (ESM),
which the euro zone will use for any future bailouts.
"We don't want to cut spending by 14 billion euros and at
the same time transfer billions of euros to Brussels for the
horrible ESM emergency fund and the weak Greeks," Wilders said.
"Elections are likely on Sept. 12 and these elections will
become, as far as I am concerned, a big referendum about the
European Union, about Brussels, about our own sovereignty and
specifically conserving it."
Dutch media characterised Wilders as irresponsible with one
cartoonist depicting him as a toddler in diapers playing with
matches and setting the country on fire.
Rutte said the package had been pretty much stitched up by
Friday night to produce a budget deficit of 2.8 percent of GDP
and that would have left about a billion euros of wiggle room to
address Wilders's concerns about weaker purchasing power.
However, Wilders changed his mind overnight and the deal was
off by Saturday, Rutte said.
Some opposition parties argued that the Netherlands could be
given more time to achieve the budget deficit goal. "The 3
percent deficit target exists," said Diederik Samson, who leads
Labour, the largest opposition party. But "you don't need to
comply if there are exceptional circumstances in the economy."
But Rutte said Brussels was unlikely to allow extra time to
meet the goal, or show any leniency.
An opinion poll at the weekend showed that many Dutch are
fed up with their politicians.
"There have to be cuts," Geert Hogema, a 66-year-old
pensioner, told Reuters as he sat reading a newspaper in an
"But instead of taking difficult decisions, they sat there
just talking for seven weeks, telling the outside world nothing,
until one of them decided to leave the table. We've had four
cabinets in five years and none of them have acted," he said.
The crisis has also attracted the attention of credit
ratings agency Moody's which said on Monday the government
crisis was a negative factor for the country's credit but
maintained its Aaa rating with a stable outlook.
But it said if the country weakened its commitment to fiscal
discipline, the rating could face downward pressure.
"This development is clearly credit-negative for the Dutch
sovereign given that it generates both political and policy
uncertainty," Moody's analysts wrote. "Having said that, the
Netherlands is entering this testing period from a position of