http://www.brecorder.com/world/global-business-a-economy/53579-dutch-to-approve-eu-fiscal-pact-in-h2-2012-.html
The episode adds an additional dose of uncertainty to the eurozone crisis. We knew that there would be significant opposition to EU-imposed austerity measures in Southern Europe – Greece, Portugal, Spain – but the Dutch? Though it’s far too early to draw conclusions, Germany might have just lost a key ally in its efforts to achieve a euro based on sound money and budget discipline
Early elections, as early as June 27, will become a popular vote on EU imposed austerity measures after the fall of a Dutch government that over the last year strongly backed the eurozone’s fiscal union treaty and urged that Greece be stripped of sovereignty for falling behind with spending cuts.
Governments commit on behalf of states. Therefore commitments are not linked to one government. Governments change but commitments on behalf of states cannot be changed without discussion with European partners.
WEDNESDAY, 18 APRIL 2012 00:33
BERLIN: The Netherlands will approve a key European treaty on budget discipline in the second half of the year after completing the process of ratifying the euro zone's new permanent bailout fund, a Dutch minister said on Tuesday.
European Minister Ben Knapen said the Dutch parliament would endorse the rescue fund, the European Stability Mechanism (ESM), in May or early June.
"The fiscal pact will come somewhat later," he told Reuters during a visit to Berlin. "We have to make significant savings in order to bring our budget deficit down below 3 percent (of gross domestic product)."
The fiscal pact will enshrine German-style fiscal rules in the constitutions of 25 of the European Union's 27 member states as part of the bloc's efforts to overcome its debt crisis.
The Netherlands, one of the euro zone's stronger economies, is firmly in the German camp on the issue of fiscal discipline, but disagreements over how to reduce its budget deficit have threatened the stability of the minority government.
A government collapse would throw into doubt the passage of the fiscal pact in a core euro zone member state. All 25 states that have committed to the treaty must complete ratification by the end of this year.
Knapen sounded a sceptical note about German Chancellor Angela Merkel's calls for closer political union in the EU that would involve national governments ceding more decision-making powers to the European Commission in Brussels.
and....
http://www.telegraph.co.uk/finance/debt-crisis-live/9220235/Debt-crisis-as-it-happened-April-23-2012.html
18.25 Mats Persson, of the think tank Open Europe, says the downfall of the Dutch government is "arguably" more significant for the eurozone crisis than the outcome of the French election.
The episode adds an additional dose of uncertainty to the eurozone crisis. We knew that there would be significant opposition to EU-imposed austerity measures in Southern Europe – Greece, Portugal, Spain – but the Dutch? Though it’s far too early to draw conclusions, Germany might have just lost a key ally in its efforts to achieve a euro based on sound money and budget discipline
Beyond short-term electoral politics, the shifts in France and Netherlands are yet another reminder of the tension at the heart of the eurozone. When European Union leaders forged the euro they gambled on two hugely unpredictable factors: that economic forces could be kept in check, and that national democracies could be managed.
18.05 Shares have fallen, amid Holland failing to agree on austerity meausres and France looking likely to elect an anti-austerity President. What can it all mean, asks Simon Nixon of the Wall Street Journal:
17.50 Bruno Waterfield, the Telegraph's Brussels correspondent, has more details on the resignation of the Dutch government today:
Early elections, as early as June 27, will become a popular vote on EU imposed austerity measures after the fall of a Dutch government that over the last year strongly backed the eurozone’s fiscal union treaty and urged that Greece be stripped of sovereignty for falling behind with spending cuts.
Mark Rutte, the Prime Minister, resigned after his fragile liberal-conservative coalition government, which has a no parliamentary majority, fell apart at the weekend after the far-right Freedom Party walked out of talks to implement £12 billion (15bn euros) in cuts.
“The government now knows that it is no longer sufficiently assured of the necessary parliamentary support to do what is necessary for our national economy,” he admitted in his resignation letter to Queen Beatrix
Bruno also includes a lovely piece of semantics from the European Commission, which is relaxed about the Dutch government's collapse despite the jolt it has given the markets. The Commission said:
Governments commit on behalf of states. Therefore commitments are not linked to one government. Governments change but commitments on behalf of states cannot be changed without discussion with European partners.
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