Dutch face
friendly fire as corona bond bad cops
Blunt
stance sparks criticism at home as well as abroad.
By HANS VON
DER BURCHARD AND ELINE SCHAART 3/30/20, 10:58 PM CET Updated 3/31/20, 4:44 AM
CET
Too much,
even for the Dutch?
Politicians
and economists in the Netherlands have accused Prime Minster Mark Rutte's
government of going too far in rejecting "corona bonds" to help
countries hit hardest by the coronavirus, and by calling for the EU to probe
why those states don't have the financial buffers to cope better with the
economic shock.
The Dutch
stance — and the blunt tone of Dutch leaders — has infuriated southern European
countries such as Italy, Spain and Portugal, re-opening wounds still raw from
the eurozone debt crisis a decade ago. At a time when thousands are dying and
southern Europe is asking for European solidarity, the Dutch stand accused of
saying the wrong things at the wrong time.
“The image
that Italians have of the Netherlands has been drastically polluted in just a
few days,” former Italian Prime Minister Enrico Letta told Dutch newspaper De
Volkskrant. “And not just in Italy … Look at the reactions in Portugal and
Spain. They are surprised, severely disappointed reactions. Nobody expected
that the Netherlands, one of the founders of the European Union, would behave
like this at just such a moment.”
The Dutch
are no strangers to criticising the financial management of southern European
capitals and Rutte and his Finance Minister Wopke Hoekstra are sticking to
their guns. But their decision to take such a strident position in the current
crisis has prompted reflection among the political class at home — even within
Rutte's four-party coalition, where the socially liberal D66 party has voiced
criticism.
"The
Netherlands, like many other governments, enjoys that feeling of 'We're a
little bit stubborn.' But it is becoming clear that they are playing with fire,
because if Italy falls, then the eurozone and EU falls and then we fall as
well," — Sophie in 't Veld, MEP
“The
Netherlands got rich through the EU. Now that jobs and incomes are at stake
throughout Europe because of the corona crisis, we cannot let our friends
suffocate,” Rob Jetten, head of the D66 parliamentary group, tweeted on Friday.
“Only together can we survive.”
Sophie in
't Veld, a D66 member of the European Parliament, said the government's
"attitude and tone were so inappropriate and so blunt, and I do not think
you need to be a northerner or southerner to feel that."
"The
Netherlands, like many other governments, enjoys that feeling of 'We're a
little bit stubborn.' But it is becoming clear that they are playing with fire,
because if Italy falls, then the eurozone and EU falls and then we fall as
well," she told POLITICO.
Even the
president of the Dutch central bank, Klaas Knot, issued a veiled criticism of
the government. “This is a test for the eurozone,” he told newspaper NRC
Handelsblad. “When you see what is now happening with the coronavirus in
countries like Italy and Spain, I find the call for solidarity extraordinarily
logical.”
For some
countries, the issue of European solidarity is crystalized in the issue of
corona bonds — debt that would be backed by all members of the eurozone. The
Dutch are not the only country to oppose the idea — Germany, Austria and
Finland also have reservations — but they have been the most outspoken critics.
Knot said
solidarity could come through corona bonds but also credit lines issued via the
eurozone's bailout fund, the European Stability Mechanism (ESM) — an
alternative solution championed by German Chancellor Angela Merkel and
cautiously supported by the Dutch government.
Knot’s
predecessor Nout Wellink was even more blunt in his criticism, saying that
economic instability in Southern Europe would severely harm Dutch interests.
“If the whole south collapses, the rich north ceases to exist,” he told Dutch
national radio on Monday.
'Old
arguments'
Opposition
parties also lambasted the government’s approach. "Despite being faced by
a shock inherently different from the eurozone crisis, the Dutch government has
fallen back on the much-rehearsed arguments of ‘moral hazard,'" said
Lodewijk Asscher, head of the Dutch Labor Party (PvdA).
"Failing
to act means risking a crisis unparalleled in the history of the eurozone. The
choice is between weathering this storm as a collective, or going under on our
own."
Paul Tang,
an MEP from PvdA, said Rutte and Hoekstra had not adjusted to a new reality.
“In the Netherlands, a conservative fiscal policy is usually really popular,”
he said. “But these old arguments don't make any sense in these new
times."
Dutch
diplomats have spent recent days on the phone trying to calm outrage among
their EU partners, arguing in particular that Hoekstra had not intended to
point fingers at any particular countries.
But Rutte,
leader of the liberal VVD party, and Hoekstra have shown no signs of backing
down. On Friday, Rutte again ruled out corona bonds and linked potential credit
lines via the ESM to strict conditions.
“Look at
the Netherlands, we have taken incredibly difficult measures over the past 10
years,” he said. “I would like other countries to do the same, and if they make
use of this emergency shield, then they should also make arrangements to ensure
that, should there be another crisis — economic or health or something else —
that they are also able to deal with it.”
Despite the
criticism at home and abroad, Rutte and Hoekstra have good domestic political
reasons for sticking to their line, according to Rem Korteweg, a political
analyst from the Dutch Clingendael think tank. The country faces a national
election in a year and with the ruling coalition increasingly fractious, each
partner is out to appeal to its base and to win popular support.
“Dutch
politicians are first and foremost concerned with how they come across among
their peers,” said Korteweg. “The Dutch
parliament embraces Rutte and Hoekstra’s approach.”
Hoekstra’s
party, the center-right Christian Democratic Appeal (CDA), is looking for a new
leader and the finance minister is considered a favorite for the job, alongside
Health Minister Hugo de Jonge.
“Both are
now trying to boost their profile — De Jonge by dealing with the corona crisis,
while Hoesktra is doing that, among other things, by his performance in
Brussels,” Korteweg said.
The Dutch
style of politics doesn’t always go down well abroad, even if it gets results,
said Korteweg, who last year co-authored a study about European perceptions of
Dutch EU policy entitled "Effective without Empathy."
He said
that what is seen in the Netherlands as a virtue — directness — is viewed in
the rest of Europe as “rude, even a little insulting, and moralizing.”
The
question for the Netherlands is whether the empathy deficit is now damaging its
effectiveness.
Two days
after Hoekstra made his controversial proposal last week, Agriculture Minister
Carola Schouten asked for EU support to compensate the Dutch flower industry
for the impact of the coronavirus crisis. Solidarity for tulip growers was not
forthcoming.
“That the
ministers didn’t think those two things would be connected is almost
embarrassing,” said Korteweg.
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