THE HAGUE (Reuters) – Dutch Prime Minister Mark Rutte’s Liberal Party and the Labor Party have agreed a coalition deal, the parties said on Monday, paving the way for a pro-austerity, pro-European government to be sworn in as early as next week.

Rutte won the most seats in the September 12 parliamentary election, which was held against the backdrop of the euro zone crisis, rising unemployment, lower housing prices and a stagnant economy.

The two party leaders have reached a deal far faster than expected, underlying the urgent need to form a government given the European crisis and fragile state of the Dutch economy.

“The (Labor Party) realizes how important this is, how important this deal is for the Netherlands. They also understand that it has important points for Labor that we can work with. I have got a mandate to conclude it,” Samsom told reporters after he met with fellow Labor MPs.

Labor needs support from its members at a party conference set for November 3 for the deal to be finalized.

The agreement includes plans to cut state spending by a further 16 billion euros ($21 billion) in the next four years, aiming to all but eliminate the budget deficit by 2017, newspapers reported last week.

In June, government forecaster and think tank CPB projected a deficit of 2.6 percent of economic output for 2017.

The Netherlands is already implementing a 12-billion-euro austerity program agreed in April.

It is one of a handful of remaining AAA-rated economies in the euro zone and has been at the forefront of calls for tight fiscal policies across the euro zone to tackle the region’s debt crisis.

Labor member of parliament Jeroen Dijsselbloem is widely expected to succeed Jan Kees de Jager, a Christian Democrat, as finance minister, Dutch newspapers reported last week.

(Additional reporting by Gilbert Kreijger in Amsterdam; Writing by Sara Webb; Editing by Jon Hemming)