Dutch Government Averts Collapse After Wealth-Tax Crisis Talks, Media Report

The Dutch government has averted a collapse after hours of crisis talks on Friday, Dutch broadcasters RTL and NOS reported, ending a week of turmoil over a wealth tax row that threatened to bring down Prime Minister Rob Jetten’s nine-month-old coalition.

Jetten was set to hold a press conference at 18:30 GMT to explain the outcome of the talks, which were triggered by a dispute over the 2027 tax plan. The details of any deal reached in the talks were not immediately public.

01. How the crisis unfolded

Jetten’s centrist D66 party and the centre-right Christian Democrats (CDA) struck a deal with the left-wing opposition PRO party, and the pro-European Volt party, to support the tax plan in exchange for a slight increase in wealth taxes. The right-wing, pro-business VVD, the third coalition partner, vehemently opposed the amendment.

After a full day of debate on Thursday, the tax deal won a narrow majority in parliament, with 79 of the 150 votes, but the VVD voted against its own government’s proposal. VVD leader Dilan Yesilgoz, who is also deputy prime minister and defence minister, warned that the coalition would need a major restructuring if her partners went ahead with the agreement.

Jetten, 39, became the Netherlands’ youngest prime minister in February. His three-party minority coalition holds only 66 of the 150 seats in parliament, so it must cobble together support from smaller parties or the opposition to pass legislation. He acknowledged on Thursday that the coalition needed a “serious fresh start” and arranged meetings with Yesilgoz and a senior CDA representative for Friday morning.

02. What was at stake

A break with the VVD would likely have ended the minority government and could have triggered new elections, which would have been the fourth in the Netherlands in five years after two previous governments also proved short-lived. A motion of no confidence in the Jetten cabinet, tabled by Geert Wilders’ Party for Freedom (PVV), was defeated on Thursday by 116 votes to 34.

Jetten skipped the European Political Community gathering in Dublin on Thursday and an informal EU leaders’ summit on Friday to deal with the crisis at home. The Netherlands is the European Union’s fifth-largest economy.