The Dutch government, one of the most vocal critics of European countries failing to rein in their budgets, quit Monday after failing to agree on a plan to bring its own deficit in line with EU rules.
Queen Beatrix‘s office said she had accepted the resignation of Prime Minister Mark Rutte and his Cabinet after Rutte informed her talks on a new austerity package collapsed over the weekend.
Rutte is to debate with parliament Tuesday on whether and how his caretaker government can still improve the budget, and when to schedule new elections. No date was immediately announced, but opposition lawmakers called for a vote in late June.
Another Coalition Government within the EU faced collapse over the past weekend, as well as the more publicised problems of Holland, the Czech Republic similarly faces early elections as the Prime Minister, Petr Necas, announced last evening that the governing centre right coalition was dissolving itself, read here.
Strangely enough, earlier in the weekend, the Bruges Group had announced that Czech President Vaclev Klaus, would be in London on 3rd May, (as disastrous local election results for the UK Coalition will be being announced,) to explain his views as the sole sane leader of any nation amongst the 27 former nations now mere EU member states.
The technical suspension of trading to be extended
More than £122.3bn was wiped off the value of Europe’s biggest companies on Monday amid fears that the eurozone’s commitment to austerity was being swept away by political rebellion – just as its debts hit record levels.
Stockmarkets plunged as traders panicked that Angela Merkel could lose her key allies in France and the Netherlands and that the debt crisis rescue plans could unravel.
The Dutch prime minister Mark Rutte, who is one of the eurozone’s “hardliners” on fiscal discipline, dramatically quit in the wake of his coalition’s refusal to accept Europe’s debt pact. Snap elections could be called as early as June.
Traders were also rattled by Francois Hollande’s victory over Nicolas Sarkozy in the first round of the French presidential election. The socialist Mr Hollande has vowed to renegotiate the fiscal pact that including a 3pc of GDP deficit limit.
The political concerns were compounded by data that showed eurozone debt has hit 87.2pc of GDP - the highest level since the launch of the single currency in 1999. Eurostat said that the 17 eurozone members had reduced their deficits from 6.2pc of GDP in 2010 to 4.1pc in 2011 – but overall debt levels had risen by 1.9pc.
Spain, meanwhile, officially sank back into recession as the economy shrank 0.4pc in the first quarter of the year, and German manufacturing shrank at its fastest rate for three years in March. The French composite PMI also fell, according to Markit.