Eurogroup head cancels IMF trip due to Dutch budget talks
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Eurogroup head cancels IMF trip due to Dutch budget talks

Last Updated: Thursday, October 10, 2013, 18:58
 
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Eurogroup head cancels IMF trip due to Dutch budget talks
Amsterdam: Dutch finance minister and Eurogroup head Jeroen Dijsselbloem pulled out of annual IMF meetings in Washington on Thursday to deal with political problems at home that could trigger a budget crisis.

The government of Liberal Prime Minister Mark Rutte needs the support of smaller opposition parties to push through 6 billion euros in additional austerity measures in 2014.

Without additional political backing, the Cabinet will not have enough support to get the budget approved. That could thrust the country into a political crisis just as the economy is at a critical turning point.

Dutch Central Bank President Klaas Knot said this week the government's failure to reach an agreement on the budget was the biggest threat to an economy still trying to escape a recession in which it has spent eight of the past 10 quarters.

Dijsselbloem had been due to represent the euro zone countries during the annual meetings in Washington starting on Thursday, but changed plans at the last minute, a Finance Ministry spokesman said.

"He regrets the decision, but at the moment he had to give priority to domestic matters," spokesman Michel Reijns said. "It is an attempt to find support for the budget measures."

Dijsselbloem announced the move after five hours of talks with opposition leaders dragged on into the early hours of Thursday. Two of five parties the Cabinet is seeking support from have already dropped out of the discussions.

Dijsselbloem was to continue the discussions on Thursday with the right-of-center Democrats 66, the Christian Union and the conservative SGP, another small Christian party.

The Dutch government needs the cuts to meet the European Union's 3 percent budget deficit target in 2014, but does not have enough backing in the Senate.

The Netherlands is the only core eurozone country still in recession and is suffering from a property crisis, rising unemployment and sluggish consumer spending.


Reuters

First Published: Thursday, October 10, 2013, 18:58


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