Dutch PM Balkenende starts coalition talks

AMSTERDAM, Jan 3 (Reuters) Dutch Prime Minister Jan Peter Balkenende began formal talks today with the Labour party and a small religious party to form a new government, a process expected to take weeks.

Negotiations will be held at a secret location all week because Balkenende, Labour leader Wouter Bos and Christian Union leader Andre Rouvoet want to start their talks without constant media attention, a government spokesman said.

The informal deadline for a deal is March 7, when elections for provincial parliaments will be held, Dutch media reported.

Dutch voters are unenthusiastic about the coalition, 49 per cent hoping the talks will fail and 43 per cent hoping for success, pollster Maurice de Hond said.

Balkenende's Christian Democrats (CDA) remained the biggest party in November 22 elections which failed to produce a clear-cut majority for either the centre right or centre left.

Political scientists say the main problem in the negotiations will be to navigate the various issues that have been declared off limits by the three parties in the campaign.

Labour wants to limit mortgage tax breaks for the highest income earners, which Balkenende has declared a no-go area. The Christian Democrats want to loosen dismissal laws to make the labour market more dynamic, which Labour opposes.

Labour also strongly opposes relaxing rent controls in the social housing sector and the privatisation of Amsterdam's Schiphol airport, both projects of the outgoing centre-right government.

Balkenende, for his part, has denounced Labour plans to tax wealthy pensioners more to help finance state pensions, as baby boomers are about to retire en masse.

Another area of disagreement is whether the Netherlands should continue to participate in the F-35 Joint Strike Fighter project.

But while Christian Democrats and Labour can agree to disagree and hand specific issues to commissions to look at, the Christian Union's concerns will be harder to overcome, Amsterdam University political scientist Philip van Praag said.

The Christian Union, a religious party with six seats in parliament, opposes euthanasia and abortion.

''With euthanasia (a compromise) is maybe possible, you can look in the direction of alleviating pain, but with abortion I think that's really difficult. I don't see an easy compromise there,'' Van Praag told BNR Nieuwsradio.

REUTERS BDP KN1632