Recriminations begin after fall of Dutch government

As the Netherlands on Friday was on course for fresh elections, it was evident that the blur of events of the previous 24 hours, in which the government fell amid a row over the citizenship of anti-Islam campaigner Ayaan Hirsi Ali, had taken everyone by surprise.

Jan Peter Balkenende, who for the second time in his short career found himself serving as caretaker prime minister, headed for the royal palace to tender his government's resignation, officially setting in motion a process that even Ms Hirsi Ali found "sad and unnecessary".

D66, the centrist party that was until Thursday evening the junior cabinet member upon which Mr Balkenende's christian democrats and the liberal VVD relied for a ruling majority, also regretted the government’s fall.

But it said it had been left no option but to withdraw its support because its cabinet allies stood by Rita Verdonk, the hard-line immigration minister, whose threat six weeks ago to strip Ms Hirsi Ali of her Dutch citizenship prompted the row.

As the recriminations and mud-slinging began, most observers were left wondering how what had appeared only a few days ago to have been no worse than an embarrassing incident for the government, had spun out of control.

“The only one guilty is D66,” said Mrs Verdonk, the former deputy prison governor dubbed “Iron Rita” for her tough immigration policies.

In mid-May she had threatened to strip Ms Hirsi Ali of her passport, because she had given a false name when applying for asylum in 1992. On Tuesday she said she could keep it because investigations had confirmed Mrs Hirsi Ali had not lied. Her grandfather was called Ali.

For Lousewies van der Laan, D66 parliamentary leader, the issue was more than a question of one individual’s right to be Dutch.

Her party’s threat to quit the government unless it sacked Mrs Verdonk was prompted by suspicions that Ms Hirsi Ali had been put under pressure to accept sole responsibility for the affair, in order to vindicate Mrs Verdonk.

Ms Hirsi Ali said she signed the statement accepting blame as a “pragmatic solution” to speed her application for a US visa that she requires in order to take a job with the American Enterprise Institute, a Washington-based think-tank.

D66 took as confirmation comments by Mr Balkenende who, in the heat of an all-night parliamentary debate, said the statement was drafted in terms that Mrs Verdonk "could live with".

It was, said Wouter Bos, leader of the PvdA social democrat party, the sort of thing you find in a “banana republic”. Mrs Verdonk had acted “shamefully” in what amounted to a “white-wash” the labour leader told parliament. Femke Halsema, leader of the Green Party, accused Mrs Verdonk of an “abuse of power”.

Still, the only avenue open to the furious and frustrated opposition was a no-confidence motion, which they tabled and which failed. D66 had more leverage.

Mrs van der Laan dug her heels in and insisted it was Verdonk or the government. D66 has made similar noises before, to little effect. This time its two cabinet ministers and one state secretary resigned.

Opinion polls suggest an election will deliver a PvdA-led coalition. Only a week ago senior business leaders were confiding their concerns at just such a scenario to the FT, fearing a reduced impulse to entrepreneurship because of tax hikes.

They said they were hopeful the Balkenende cabinet could win a second term at the scheduled election in May 2007.

Yesterday the Dutch employers' federation described the cabinet's demise as "tragic and incomprehensible". It urged that efforts be made to continue the policies of the centre-right cabinet.

Its overhaul and reform of health insurance, disability and retirement schemes initially met resistance when coupled with swingeing budget cuts that the government argued were essential to reverse declining competitiveness.

But the economy has lifted out of the most sustained depression since the second world war. Government statisticians forecast 2.75 per cent gross domestic product growth in 2006. The Dutch central bank expects 3 per cent growth in 2008. That compares with 0.9 per cent in 2005.

Consumer expectations for the development of the economy for the coming year are at their highest level since 1986. Exporters expect 11 per cent growth this year, said trade group Fenedex.

Hence the caretaker government may feel the longer it waits to call a national ballot, the better its chances of re-election.

For the opposition, especially Mr Bos’ PvdA, the vote cannot come quickly enough. While security and immigration are sure to figure, general elections in the Netherlands are determined by economic issues, said one European diplomat. “People vote with their wallets,” said Harry van Bommel, socialist party MP.

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