Dutch government in lockdown as AAA-rated country comes unstuck

Wednesday, March 14, 2012
By Paul Martin

The air in Brussels is thick with tales of pots and kettles as the Netherlands breaks new EU rulebook and fiscal pact

Ian Traynor
Tuesday 13 March 2012

A hush has descended on a handsome 17th century villa in The Hague where the leaders of the Netherlands’ rightwing minority government are huddled over spending ledgers, debt projections, budget balances, housing market analyses and deteriorating pension fund figures.

Mark Rutte, prime minister and leader of the liberal-conservative VVD party, has imposed a vow of omerta on his colleagues locked away in his official residence until they chart a path out of a worsening public finances debacle.

Europe’s two-year debt and deficit crisis has pitted preachy northern creditors against “feckless” Mediterranean spendthrifts – countries the Dutch are wont to dub the “garlic belt”.

But suddenly the air in Brussels and elsewhere is thick with tales of pots and kettles, glass houses and stonethrowing as the triple-A rated Netherlands comes unstuck.

Rutte launched the three-week retreat for the top members of his government at his residence last week after shock budget projections from the CPB Bureau for Economic Analysis, the old and authoritative thinktank which crunches the finance ministry’s numbers.

The CPB, accustomed to delivering inarguable verdicts on fiscal and budgetary policy, said the Netherlands was in flagrant breach of the new eurozone rulebook and fiscal pact it has been highly instrumental in drafting.

“The government has the intention of living up to the rules, but it’s embarrassed that it can’t meet the targets now,” says Coen Teulings, director of the CPB.

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