Bloomberg News

Dutch Premier Defends Austerity, Says No to More Greek Aid

August 27, 2012

Dutch caretaker Prime Minister Mark Rutte, seeking a return to power after Sept. 12 elections, said he would block a third aid package for Greece and defended austerity as the only way out of Europe’s debt crisis.

“We’ve helped twice and now it’s up to the Greeks to show that they want to stay within the euro,” Liberal leader Rutte, 45, said in a debate between the four main party leaders in Amsterdam last night broadcast on RTL television. “The Netherlands has been severely hit by the debt crisis and the solution is to lower taxes, get government finances in order and make room for investment.”

The Socialists, led by Emile Roemer, have a three-seat lead over Rutte’s party, known in Dutch as the VVD, with enough support for 35 of the 150 seats in parliament, according to a Maurice de Hond poll published yesterday. The survey gave both the Freedom Party and the Labor Party 18 seats. In an Ipsos Synovate poll, published Aug. 24, Rutte’s party led with 34 seats, four more than Roemer’s.

It means a third of Dutch voters back the Socialists, who oppose more spending cuts and refuse to hand over more sovereignty to Europe, or the Freedom Party, which seeks an exit from the European Union and the euro. That will make it tough for Rutte, an ally of German Chancellor Angela Merkel in her efforts to stem the crisis, to find support from perhaps three or four parties for a majority in parliament and keep cutting the deficit.

‘Too Drastic’

“The budget cuts are too drastic and over too short a period of time,” said Roemer, who like Rutte was taking part for the first time last night in a pre-election debate. “People who have less are paying the bill,” the Socialist leader, who turned 50 on Aug. 24, said in a direct response to Rutte.

An assessment of each party’s platform by the independent Dutch planning agency CPB found that Roemer’s program for the next four years would give citizens the most purchasing power while creating half a million fewer jobs than the VVD, Coen Teulings, the CPB’s director, said today at a press conference. The Liberals would produce the lowest budget deficit at the end of a four-year government, at 1.1 percent of gross domestic product by 2017, while under Wilders the economy would grow the most, with 0.7 percent in 2017, according to the CPB analysis.

Elections Triggered

Elections were called after Rutte’s Cabinet resigned on April 23, when Freedom Party leader Geert Wilders, who’d been backing a minority government of Liberals and Christian Democrats, withdrew support for spending cuts and tax increases.

Rutte’s administration and three opposition parties struck a deal three days later on an austerity package to make sure that the budget deficit next year stays within 3 percent of gross domestic product. The 2013 deficit is now forecast at 2.7 percent, the government’s planning agency said Aug. 22.

The five parties that signed the austerity deal don’t have enough backing for a majority, according to polls.

Wilders, 48, has made Europe the key issue of his election program under the slogan “Their Brussels, our Netherlands.” He’s demanding a return to the guilder, after a report commissioned by the party said in March that the Netherlands would eventually profit from abandoning the euro. “We need to become boss in our own country again,” he said in the debate.

More Time

Diederik Samsom, 41, a former Greenpeace activist who took over leadership of the Labor Party from Job Cohen in March, also wants more time for the Netherlands to meet the budget-deficit limits from Brussels. “We have two principles: share the burden and make progress possible,” Samsom said.

Rutte has stood by Merkel as she staves off calls to provide more help to cash-strapped southern European countries. A new Dutch government less willing to pursue austerity or readier to see the euro break up might make the chancellor’s task more complex at a time when she is striving to find common ground with French Socialist President Francois Hollande.

Merkel warned her German coalition partners advocating a Greek exit from the euro to “weigh their words” yesterday, signaling a renewed determination to keep the single currency intact. She told ARD television that the fight against the debt crisis has reached a “decisive phase.”

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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