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Dutch government quits after austerity talks fail

LONDON — The Dutch government has become the latest to fall because of Europe's stubborn debt crisis.

Prime Minister Mark Rutte and his Cabinet resigned Monday after they failed to clinch a deal with political parties over austerity cuts to reduce the Netherlands' budget deficit. It was an embarrassing development for the Dutch, who have repeatedly lectured southern European nations on the need to rein in public spending.

Rutte and his allies had contended that drastic cuts were necessary to maintain credibility with the markets, especially for the Netherlands to hold on to its coveted triple-A credit rating. Only a few of the 17 nations that use the euro still get top billing by ratings agencies.

Rutte will remain head of a caretaker administration until elections are held, possibly in June.

The government is the latest of more than half a dozen in Europe to collapse or be ejected by voters as a result of the debt crisis. Widespread austerity has ignited anger and social unrest across the continent.

Many analysts agree that the austerity recipe pushed by Germany has brought down spending in nations such as Greece, Portugal and Spain, but also choked off growth. And as those countries' economies contract, their government debt levels rise, which leads to yet more austerity and ultimately results in a dangerous negative spiral, critics say.

Former leader in Iceland convicted

Former Iceland Prime Minister Geir Haarde was found guilty Monday of failing to keep his Cabinet informed of major developments during the 2008 financial crisis. He was acquitted of three more serious charges that were linked to his management during Iceland's economic collapse in 2008, which could have resulted in a jail sentence. A Reykjavik court ruled that Haarde would not receive any punishment on the one guilty count. He was the first politician to face a court over his actions during the financial crisis.

New York Times

Dutch government quits after austerity talks fail 04/23/12 [Last modified: Monday, April 23, 2012 10:39pm]
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