Dutch agree cuts budget

Public-sector pay will be frozen, the retirement age will shoot up to 66 from 65 and a tax deduction for mortgage interest will be sliced.

They've also pencilled in attacks on the health service but those aren't final yet.

Although the country's debt is relatively low, the government is set to run a 4.6 per cent deficit this year - above the EU's 3 per cent limit that the Dutch government had loudly supported.

The Dutch people almost got a reprieve when Prime Minister Mark Rutte's right-wing government collapsed after austerity talks with Geert Wilders's far-right Freedom Party (PVV) broke down.

But the governing People's Party for Freedom and Democracy (VVD) and Christian Democrats (CDU), as well as the opposition Green Left, Christian Union and the D66 party have now agreed a cuts package.

Together the parties hold 77 seats out of 150 in the lower house.

The centrist Labour Party, left-wing Socialist Party and the PVV stayed away.

"We have a broad package that I hope will win broad support. In any case we have a majority in parliament," Finance Minister Jan Kees de Jager said.

"The cabinet will meet tomorrow and then the budget goes to Brussels."

D66 leader Alexander Pechtold said the deal showed that Mr Rutte was wrong to talk to the PVV in the first place.

It isn't certain that the budget, despite the pain, will get the Dutch deficit under 3 per cent by 2013. That relies on growth forecasts coming true.

foreigneditor@peoples-press.com