Dutch Prime Minister Mark Rutte (courtesy Creative Commons)

Rutte meet with the queen to give his resignation.

Budget talks went on for seven weeks before collapsing this weekend. The talks were between the Dutch multi-party coalition government and the right-wing PVV.

Rutte announced that the talks had collapsed Saturday and blamed PVV leader Geet Wilders.

The failure to reach an agreement could destroy the country's AAA-rating. It could also increase the nation's borrowing costs and impact the Eurozone, analysts told CNBC.

Jan Kees de Jager, the Finance Minister, told reporters Monday that the government would be able to make necessary cuts, reports The Daily Beast.

The budget deficit was at 4.7 percent in 2011. The country needs to bring it down to 3 percent to meet the EU's limit.