Fitch doubts Dutch AAA as property slump reaches 'coma' "We expect prices to drop 5pc in 2012," he said. The Dutch real estate federation NVM said the picture could be significantly worse if the stamp tax holiday expires in July as planned, leading to a jump from 2pc to 6pc. The stock of unsold properties has doubled to 221,000 since 2008 as "Te Koop" signs proliferate on Dutch streets, almost double the declared level in the US on a per capita basis. Low unemployment (4.9pc) has kept arrears below Irish, UK or US rates, but job loses are creeping up. The economic woes are infecting state debt dynamics. Public debt will climb to 76pc of GDP by 2015, according to the official Bureau for Economic Policy Analysis (CPB). A €32bn bail-out of ABN Amro Bank has not helped but the chief cause is back-to-back recessions. Central bank governor Klaas Knot said Dutch borrowing costs would rise by 100 basis points if the country loses its AAA, warning that Holland does not have safe-haven status like the US and risks "losing the confidence" of investors if it pushes its luck. The Netherlands has been a vocal critic of fiscal excess in Greece but is now in breach of EU rules itself, an unexpected casualty of the eurozone's contractionary policy mix. Critics cite the troubles in Holland - and Belgium - as evidence that the European Central Bank has been too tight, asphyxiating credit for the whole bloc. The M3 money supply contracted over the winter on a month-to-month basis. Premier Mark Rutte is struggling to put together an austerity package before a deadline this week but he relies on support from populist leader Geert Wilders, who has threatened walk out of talks. His Freedom Party calls for a return to the guilder. Mr Rutte aims to cut the deficit from 4.6pc to 3pc of GDP, though the official CPB said it would be unwise to treat the EU target as the "Holy Grail" of 3pc regardless of circumstances. "This could have a detrimental effect on the economy," it said. The International Monetary Fund has also urged caution, saying "automatic stabilizers ought to be unhindered." It warned that excessive tightening could itself "endanger financial stability." Hans Wijers, head of the chemicals group AkzoNobel, said it was more important to hold the fragile coalition together than precipitate chaos by trying to meet an abstract target. "Nobody wants a crisis and new elections right now," he said. The central bank said in its Financial Stability Report that the country faces a nasty mix of problems. The outlook for financial stability in the Netherlands is worrying. Dutch households have almost the highest debt in the world. Declining real wages and rising unemployment are putting pressure on incomes. The steady fall in house prices is weakening their position while also increasing the likelihood of debt problems. The report said credit outgrew the deposit base of lenders during the property bubble, leaving banks dependent on fickle capital markets. Short-term funding may dry up overnight, as in 2008 when the interbank market stalled and again in the summer of 2011. A drop in house prices will compromise the issue of mortgage-covered bonds, while significant loan losses may lead to margin calls by the owners of such bonds," it said. The regulator said Dutch pension funds are deeply underwater. They need €90bn in extra funding to meet future obligations, and $200bn to restore buffers. Critics say Holland's policy of full tax deductability on mortgages as well as loan-to-value caps of 112pc (with stamp tax) encouraged a debt spree along Anglo-Saxon lines. The country has less monetary flexibility to cope with the consequences, though it has other strengths. Fitch Ratings said the Netherlands has the cushion of a current account surplus above 7pc of GDP and a history of credible governments. The country has been run for a long time by sensible parties and this allows us to be a bit more generous. "Geert Wilders has not been irresponsible in fiscal policy, but if a situation arises where his presence is no longer compatible with stable government, we would expect the other parties to draw the proper conclusions," said Mr Pryce.