Unable to push austerity measures, Dutch PM quits

Dutch Prime Minister Mark Rutte announced the resignation of his coalition government on Monday after its partners failed to agree on austerity measures, leaving the Netherlands – which had so far appeared relatively safe from the euro zone crisis – with a messy leadership vacuum.

Rutte has been an ally of German Chancellor Angela Merkel on fiscal matters and a strong voice in favour of austerity for other European countries. His inability to deliver on his promises signals a possible shrinking of the euro zone ''core'' around Germany, which has insisted on tight fiscal discipline.

Meanwhile, there are increasing signs of the effects of the economic downturn in the Netherlands, with one indication being the growing need for food handouts.

''We have about 1,300 households here every week. It's been growing for some time but now we see a steep rise," Piet van Diepen from Food Bank Amsterdam told the BBC.

Rutte tendered his resignation to Queen Beatrix, the head of state, at her palace in The Hague, his office said. The queen replied that she would take his offer into consideration, and she asked that his cabinet - made up of ministers from Rutte's conservative VVD Party and the Christian Democrats - continue on in the interest of the nation. That paves the way for new elections, possibly before the end of June.

The dissolution of the minority government became inevitable after an ally, the far-right Freedom Party of Geert Wilders, abandoned negotiations on Saturday intended to cut a budget shortfall by billions of euros to meet targets agreed to last year in Brussels and to safeguard the country's coveted AAA credit rating.