Dutch parties try to agree spending cuts, avoid election

THE NETHERLANDS stepped back from the brink of a general election yesterday after talks resumed between the coalition government parties and Geert Wilders’s right-wing Freedom Party (PVV) aimed at finding €9 billion in budget cuts.

Negotiations on the savings – which will allow Holland to force its budget deficit down to the eurozone limit of 3 per cent of GDP by 2013 – broke down on Wednesday when Mr Wilders balked at healthcare reforms and changes to redundancy laws certain to be widely unpopular.

The government has said it will brief Brussels on its plans by April 30th. However, despite €18 billion of cuts already agreed, the deficit will still be around 4.5 per cent of GDP this year and next unless further savings are found, according to the Bureau for Economic Policy Analysis.

Yesterday, the governor of the Central Bank, Klaas Knot, took the unusual step of warning the politicians that they had “no time to lose” if they wanted to maintain the country’s relatively strong economic position, particularly its Triple-A international credit rating.

As the talks resumed, all three parties – Liberals, Christian Democrats and PVV – agreed to observe media silence.