Dutch finance minister and Eurogroup head Jeroen Dijsselbloem has cancelled a trip to the annual IMF meetings to deal with urgent domestic budget negotiations, Dutch media reported today.

Mr Dijsselbloem had been due to represent the euro zone countries during the annual meetings in Washington starting today, national broadcaster NOS reported.

Mr Dijsselbloem took the last-minute decision in an effort to salvage a budget deal with minority parties needed to support an additional €6 billion in austerity measures next year, it said.

The Dutch government needs the cuts to meet the European Union's 3 per cent budget deficit target in 2014, but does not have enough backing in the Senate without small opposition parties.

Dutch Central Bank president Klaas Knot said this week the government's failure to reach an agreement on the budget was the most significant threat to Dutch economic recovery.

The Netherlands is the only core eurozone country still in a recession and is suffering from a property crisis, rising unemployment and sluggish consumer spending.

Failure to reach a budget deal could prompt elections and hurt chances of an economic recovery.

Reuters