The Dutch Prime Minister Mark Rutte has formally offered his cabinet’s resignation to Queen Beatrix sparking political uncertainty in the Netherlands and uncertainty throughout the Eurozone.
The resignation comes after a disagreement between the coalition government’s leaders over the country’s proposed austerity plans.
Queen Beatrix is considering the resignation but has asked the cabinet to remain and “to do what is necessary for the country’s good”.
Leader of the far right Freedom party Geert Wilders stormed out of negotiations earlier today saying; “This was a package that would damage our economy over coming years and increase unemployment. And all that to meet a demand made by Brussels, accepted by the Liberals, of reaching a 3 percent deficit in 2013”
The resignation comes at a time of great uncertainty in the Eurozone. All signs are pointing to French president Nicolas Sarkozy not being re-elected in the country’s elections, casting doubt onto the French commitment to sticking to its austerity plans. His possible replacement Socialist Francois Hollande has said that he will renegotiate the countries stance on a European budget pact. In embattled Greece, voters will be going to the polls on May 6th where only two of the main parties support the IMF/EU bailout plan. The increasing number of political victims is one sign that the peoples of Europe have had enough of Austerity and EU interference.
The Dutch and French situation has overshadowed the weekend deal struck by Christine lagarde to supply the IMF with an additional $430 billion. The deal was made by the world’s major economic powers to help protect the world economy from Europe’s problems.
Combined with poor PMI figures from Germany, France and other Eurozone members indicate that the Eurozone economy is contracting at a faster pace than expected. Germany suffered a three year low of 46.3 in April. Any number below 50 suggests a contraction.
The single currency dropped 0.35 percent to $1.3150, down from a two-week high on Friday, and is expected to stay under pressure before key debt auctions later in the week by Italy and the Netherlands.
The Pound to Euro exchange rate is currently trading at 1.226
The Pound to US Dollar exchange rate is currently trading at 1.609
The Euro to US Dollar exchange rate is currently trading at 1.312
Comments are closed.