The political crisis in The Hague shows another core country going soft on the eurozone’s chosen strategy of universal austerity, with the hardcore fiscal disciplinarians looking increasingly under siege.
The domestic political debate will no doubt centre on what might happen after prime minister Mark Rutte’s resignation, and in particular whether Geert Wilders, the rightwing populist at whose mercy Mr Rutte’s governing coalition ruled, will gain or lose from withdrawing his support, ostensibly in protest against austerity measures required by Brussels.
But the wider economic and political significance of the fall of Mr Rutte’s government for the eurozone as a whole is already clear. The Netherlands – until recently a hard-as-nails ally of Germany in resisting help for peripheral eurozone members before they get their public finances in order – has seen its chickens come home to roost. Last year’s government deficit of 4.7 per cent of national output was an embarrassment for The Hague, which has acted as a cheerleader for the European treaty forcing governments to keep their borrowing below a 3 per cent limit.