EU Unraveling – Now It's Holland's Turn
By Staff News & Analysis - April 23, 2012

The Dutch government's failure to reach an agreement in talks to achieve tough spending cuts could see ratings agencies cut the country's prized AAA-rating and nervous investors push up the country's borrowing costs, and it will also have wider implications for the euro zone as a whole, analysts said on Monday. Prime Minister Mark Rutte will meet the Dutch queen on Monday afternoon to tender the government's resignation, Dutch broadcaster RTL reported. – CNBC

Dominant Social Theme: This is only to be expected. Wars are not won in a day, and neither will be the battle to save the EU.

Free-Market Analysis: Like some kind of rolling contagion, the insolvency affecting the Southern PIGS is spreading northward toward the supposedly solvent part of the EU.

Now it's Holland's turn. We learn that austerity hasn't been a soft sell in Holland any more than it has been in Greece, Portugal, Spain or Italy. Or Ireland, for that matter.

Of course, we figure the elites orchestrated first the downfall of Europe, from what we can tell, and then the following austerity. But maybe it is not working out as planned.

True, there are elite apparatchiks running Italy and Greece now, but the public furor hasn't died down and in the case of Greece and Spain seems to be growing stronger.

We figure this is partially because of what we call the Internet Reformation. The STATED plan (the Euro-crats have admitted as much) is that a Euro-crisis would eventually bring greater union to the unruly empire-in-progress.

The Eurozone is extremely important to the one-world government that is apparently being built brick-by-brick by the dynastic families of Europe and America. But the Internet itself has evidently and obviously exposed these plans.

What was intended to have been built in secret is being exposed with regularity. And the economic woes that should have provided an implacable impetus for a closer union may be working against the very plans that created the rolling Euro-depression in the first place. Here's some more from the article:

Dutch Finance Minister Jan-Kees de Jager sought to reassure investors on Monday, telling CNBC in The Hague that the Netherlands had always displayed budget discipline and would continue to do so. "The perception of financial markets is always important…and that's why I also have the message for financial markets that for decades the Netherlands have shown a solid fiscal budgetary policy and this will not change. In any government we have seen in the past we have seen solid policy and this will remain in the future," de Jager said.

The talks between the Dutch multi-party coalition government and the right-wing "Freedom Party," or PVV, which supports it in parliament, dragged on for seven weeks. On Saturday, Prime Minister Mark Rutte announced the talks had collapsed and blamed PVV leader Geert Wilders for the failed negotiations …

"With Saturday's decision, it looks likely that new elections will be announced shortly," Carsten Brzeski, senior economist at ING, said on Monday. Alastair Newton, political analyst at Nomura, said there may still be a possibility of an agreement; but, if so, "it looks to be a slim one at best given that PVV leader Geert Wilders has already openly called for elections."

Holland was committed to reducing its budget to the three percent limit demanded by the larger EU. But the "political will" apparently has vanished – and now the government is about to as well.

With a budget gap of closer to five percent than three, political parties in the Netherlands are already proclaiming that the target is unapproachable and must be formally changed.

The pols in Holland are not alone. In France, presidential candidate Francois Hollande intends to roll back budget-cutting measures as well, if he wins. Meanwhile, Greece is in flames, Spain simmers and the public temper is none-too-good in Portugal, Italy or even Ireland.

The notion being floated today within certain analyses via the mainstream media is that a formal agreement to lift budget deficits is the only way out for the EU. Maybe the target shall be closer to four or five percent than three.

But it is not so easy, is it? The European Central Bank will implicitly accept a decision to print more money were budget deficit reductions to be eased, but that would not sit well with the country that matters most, Germany.

The German public has its own resentments. It fears, in aggregate, being taxed either directly or via price inflation for the rest of Europe. These fears have already led to one constitutional crisis and could doubtless lead to a second one.

After Thoughts

It is not so easy, therefore, simply to proclaim that the ECB will have to print more because Europe as a whole is not accepting "austerity." The ramifications, in fact, are enormous – and may have a significant effect on the euro, if it survives.

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