Dutch leaders agree to scrap some austerity moves

THE HAGUE, Netherlands -- The two Dutch political parties hoping to form the country's next coalition government have agreed to scrap two unpopular austerity measures.

Caretaker Prime Minister Mark Rutte told reporters Modnay that he and Labor Party leader Diederik Samson have decided to dump a planned "commuter tax" on money paid to workers to cover travel costs and not fine students who took too long to complete a degree.

The measures were intended to save nearly (EURO)2 billion ($2.58 billion) to help bring the Dutch budget deficit within EU guidelines next year.

To ensure that target will still be met, Rutte and Samson want to raise a tax on insurance and abandon a subsidized savings scheme.

The announcement fueled speculation that Rutte, leader of the free-market VVD party, and Samson may soon be able to hammer out an agreement to form a new Cabinet.

The VVD and Labor emerged from last month's national election as the two biggest parties and together command a comfortable majority in Parliament's lower house. They now are locked in behind-closed-door coalition talks.

The only snippet of information Samson would reveal about the talks was that Rutte "eats a huge amount of candy."

"That's why we want to get this done quickly!" Rutte added.

But he called speculation that an agreement could be reached within two weeks "very optimistic."