The break-down of talks on cutting government spending following Geert Wilders’ decision to pull out means new elections are now on the cards.

The strong words used by prime minister Mark Rutte and Christian Democrat leader Maxime Verhagen to blame Wilders for the failure make it extremely doubtful the rift with the PVV can be healed, commentators said.
It is now likely that Rutte will visit queen Beatrix and tender his resignation on Monday. However, there will not be an election before the summer. In Dutch electoral law, there must be some 80 days between the collapse of a government and new elections. Given the summer holidays, it is unlikely the election will be held before September.
Caretaker
According to the NRC, the prime minister will update parliament on Tuesday. If elections are being called, the government will then have a caretaker status. This means it cannot continue with any controversial legislation without parliamentary backing. This would probably mean, for example, the end of plans to stamp out dual nationality.
However, parliament has to decide on the 2013 budget and the government will have to look for support to get the budget deficit under control in line with EU demands.
Under monetary union rules, the Dutch budget deficit must be below 3% next year, but without action, it is likely to rise to around 4.6%, according to government economists.
This will then impact further on the economy and could lead to the loss of the Netherlands’ Triple A status on the financial markets.
Proposals
Rutte has already said he will put some of the proposals agreed in the austerity talks to MPs and will try as hard as possible to win majority support for them. The decision to scrap the tax break on new interest-only mortgages would be a likely candidate.
‘We in parliament will take responsibility for a careful budget in 2013,’ Labour leader Diederick Samsom said.
However, with elections pending, party leaders will also be keen to profile themselves to the electorate, making compromises difficult, commentators point out.
Overshadowing the domestic situation is Brussels. A spokeswoman for president of the European Commission Jose Manuel Barroso said Brussels is following developments in the Netherlands closely.
News agency AP said in its coverage of the crisis that the election will be ‘a referendum on the Netherlands’ relationship with Europe and its ailing single currency’.
Rutte’s minority cabinet – made up of the VVD Liberals and CDA – came to power in October 2010, four months after the June 2010 general election. The cabinet formed an alliance with the anti-immigration PVV, which agreed to support its economic policies in return for tougher immigration controls.
The VVD still leads the opinion polls, although Labour, under new leader Samsom, is making strong gains.