Coalition on knife edge as VVD weighs response to tax deal

The stability of the Dutch coalition government is in jeopardy following a tax deal struck by the ruling centrist D66 and Christian Democrat CDA parties with opposition parties Pro and Volt, against the opposition of their right-wing liberal VVD partner. VVD leader Dilan Yesilgöz expressed concern that the agreement violated the coalition deal and demanded a "fundamental reset" if D66 and CDA proceed.

Despite the VVD's objections, D66 and CDA are set to vote in favor of the amendment to raise taxes on the wealthy to lower the income tax rate. The VVD has labeled the amendment as "unthinkable" and "bad for the Netherlands". Prime Minister Rob Jetten withdrew from an EU meeting in Dublin to participate in the debate on Thursday.

The proposed amendment is a reduced version of a "millionaires' tax" plan initially proposed by Pro and Volt, which would generate €1 billion, down from the original €1.5 billion. The funds would be used to lower the lowest income tax rate. Pro party leader Jesse Klaver claimed the VVD was not part of the negotiations, while CDA leader Henri Bontenbal asserted the VVD was "kept informed at several moments."

Parliament recently approved a motion stating that in the event of a mid-term cabinet collapse, MPs should first attempt to form a new coalition before calling for new elections. Since 2000, only one Dutch cabinet has completed its full four-year term.