The Dutch were the only bidders for an event similar to the Pan-American and Asian Games when they were awarded the hosting rights less than a month ago but the country's Olympic Committee said it had since failed to win the government’s support.
In a letter to Parliament, Sports Minister Edith Schippers said central and regional governments were unable to provide the money the Dutch Olympic Committee was seeking.
"The sum requested of 57.5 million euros ($65.02 million)for the 2019 European Games is, in this time of scarcity, a burden on the resources that the authorities have at their disposal," she said.
Dutch media reported that the cities of Rotterdam, Eindhoven and Utrecht had declined to contribute to the financing of the event.
"In major sports such as athletics, equestrian sports and swimming, it is still unclear if the European Games will have enough top sporting substance, bearing in mind the relevant international federations’ sporting calendars," Schippers said.
The decision could not have come at a worse time for the EOC, which is desperate to pitch the Games as a valued addition to the already crowded international sports calendar.
DISAPPOINTING NEWS
"This news is disappointing, but we would like to thank the Dutch for their interest," said EOC chairman Patrick Hickey in a statement.
"I have no doubt that we will be able to present a strong host for the 2019 European Games, but right now our focus remains on ensuring this inaugural edition is the best possible launch pad for Europe’s first continental Games."
Azerbaijan spent millions building new venues and refurbishing existing ones for an event that will include 20 sports, 16 of which are Olympic ones.
A dozen sports are offering direct or indirect qualification for the 2016 Rio de Janeiro Olympics but athletics and swimming, two of the biggest Olympic federations, will not be fielding their top athletes in Baku, taking considerable shine off the project.
The Dutch Olympic Committee, which had planned for nationwide Games instead of just one city to make better use of existing facilities and keep the costs down, said it was "a great missed opportunity for the Netherlands."
The EOC said it would now resume talks with other potential hosts but said all discussions will be held in private.
($1 = 0.8843 euros)
(Additional reporting by Thomas Escritt in Amsterdam; editing by Ken Ferris)
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