Budget talks between the main parties in the Netherlands collapsed on Saturday.
Party leaders have been negotiating for the last seven weeks to try and cut 16 billion euros from the budget, to meet European deficit targets.
Prime Minister Mark Rutte told reporters that talks had failed and a new election was likely.
The Freedom Party walked out of the three-party talks, saying the European Union demands were impossible to meet.
The prime minister is preparing for a meeting with his cabinet on Monday, but said "elections are to be expected".
