Dutch Prime Minister Mark Rutte has tendered his government's resignation in a crisis over budget cuts.
Mr Rutte says he has offered his minority coalition's resignation to Queen Beatrix after a split with the populist Freedom Party, which had backed his government for the past 18 months.
The row erupted at the weekend when the anti-EU Freedom Party, led by populist Geert Wilders, refused to agree with Mr Rutte's centre-right coalition on how to cut €14 - 16 billion from the budget.
Mr Rutte said the Queen was considering the resignation offer and had asked the cabinet to keep working for the country's good. Elections could be held as early as June.
Finance Minister Jan Kees de Jager dismissed suggestions that political paralysis would force the Netherlands into the ranks of Europe's sickest economies.
He told Reuters that the sovereign debt in the Netherlands was about 65% of total output, well below the euro zone average. "There is was no correlation whatsoever between the Netherlands and the countries of southern Europe," he said.,
Greece, by comparison, aims to cut its debts from 160% to 120% of gross domestic product by 2020.
However the turmoil in what is traditionally one of the euro zone's most stable and prosperous members has jolted financial markets, already worried that the Socialist frontrunner in French elections has pledged to renegotiate the agreement to ensure fiscal stability if he wins the presidency next month.