Moody’s: fall of cabinet puts Dutch credit status in peril
The coalition’s collapse will have a negative impact on the Dutch credit rating, notes credit rating agency Moody’s.
The experts at Moody’s agree with their colleagues at Fitch, whom recently warned the Dutch government that they faced losing their ‘Triple A’ credit status if they fail to present clarity on budget cuts and reforms. An issue of concern as budget talks are delayed indefinitely due to the failed ‘Catshuis’ negotiations and the collapse of the coalition. “In spite of the impressive Dutch tradition of budgetary discipline, the current political instability has led to uncertainty about the future policies” Moody’s stated in their report.
Moody’s also expressed their concerns with the message the Netherlands will send the rest of the E.U. when failing to meet the deficit norm of 3%. “Within the Euro-zone, the Netherlands is one of the main advocates of fiscal discipline and control” Moody’s stated. “If the Dutch do not live up to the rules, the rules will lose their authority.