REUTERS

THE HAGUE DUTCH political parties reached a deal on a 2013 budget on Thursday, averting crisis and enabling a country that has championed euro fiscal discipline to meet a European Union deadline set for Monday.

The Dutch government had resigned on Monday in a standoff over budget-cutting plans, creating a political vacuum in one of the euro zone’s few remaining AAA-rated countries.

Dutch politicians, some of whom have lectured Greece on getting its finances in order, say Thursday’s deal will cut the deficit to the EU target ceiling of 3 percent.

Failure to come up with a deal would have led to uncertainty until elections in September, feeding angst in financial markets about the sustainability of Spanish and other euro zone debt.

“I am very pleased that a number of parties have taken responsibility. It was necessary - to restore confidence with the people in the country, but also to tackle the crisis,” Christian Union leader Arie Slob told broadcaster RTL.

The Dutch budget plan for 2013 now has the backing of the majority of members of the Dutch parliament after the opposition GreenLeft party said it would support the plan. A caretaker coalition government of the Christian Democrats Party and the Liberals had already backed the plan, as did two smaller opposition parties, according to public broadcaster NOS.

Together with the GreenLeft, they now have enough members to get the plan through parliament.

Under the deal, the deficit will be brought down to 3 percent next year through a combination of social service cuts and higher taxes, according to national broadcaster RTL.

The Liberals parliament leader, Stef Blok, told NOS that the government’s macroeconomic forecaster CPB would still need to calculate exactly what percentage the deficit would fall to.

“If it turns out that some parts of the package have a different impact we have the intention to come to a deal again. That applies to the 3 percent rule. It applies to economic and purchasing power effects,” Blok told NOS.

Among the most notable measures are an increase in the VAT tax on luxury goods by 2 percent to 21 percent and higher taxes on alcohol, soft drinks and tobacco products, RTL said. Civil servants’ salaries would be frozen and healthcare spending reduced by 1 billion euros ($1.3 billion).

Tax write-offs for employee travel would be trimmed, but tax on home purchases would be reduced, it said.

Prime Minister Mark Rutte’s government fell apart last weekend when its main ally, Geert Wilders’ Freedom Party, refused to agree to a deal that would have cut more than 14 billion euros ($18 billion) off the annual budget. Some small opposition parties favor reducing the deficit to 3 percent but the largest opposition parties, including Labour and Wilders’ Freedom Party, had said 3.6 or 4 percent was good enough.