Europe gloats over Dutch budget crisis

RNW archive

This article is part of the RNW archive. RNW is the former Radio Netherlands Worldwide or Wereldomroep, which was founded as the Dutch international public broadcaster in 1947. In 2011, the Dutch government decided to cut funding and shift RNW from the ministry of Education, Culture and Science to the ministry of Foreign Affairs. More information about RNW Media’s current activities can be found at https://www.rnw.org/about-rnw-media.

"It's an overriding obligation for politicians to honour agreements made." Those were the words of Dutch Prime Minister Mark Rutte, about five months ago. Rutte and his finance minister Jan Kees de Jager have been lecturing the other EU Member States for the past year and a half about the need for fiscal discipline. No wonder Europe is responding with some glee to the political crisis in the Netherlands.

by Tijn Sadée and Marina Brouwer

An iron budget discipline, a "super-commissioner" who controls the national books, a penalty for defaulters. Rutte and De Jager suggested all sorts of measures to force EU member countries to get thei budgets in order.

But now it's very doubtful that the Netherlands itself can still meet the Brussels requirement that the deficit in 2013 may rise no more than 3 percent. Late last week the seven-week-long deliberations behind closed doors about a super savings package failed. It's still questionable whether the Rutte government - now a caretaker government until the election later this year - can count on a majority in the House to get new proposed cuts through parliament.

Insults will be remembered
Rutte and De Jager were always businesslike during a series of European meetings on budget issues within the EU. But in the background there was Geert Wilders, the strong man of the Freedom Party (PVV) who held the Rutte government in the saddle while speaking of  'those lazy Greeks' and' 'garlic-eating wastrels'. Those insults are well remembered in Europe. It is therefore not surprising that they're now gloating in response to the situation in the Netherlands.

The situation is quite dramatic. By 30 April, the European Commission wants to receive hard figures from all 27 EU member countries, explaining how they will meet the agreed fiscal standards in next year's budget. It will be impossible for Rutte and De Jager to produce a convincing report to send to Brussels in just eight days.

Moreover, the Netherlands itself advocated the imposition of fines on countries that do not meet the rules. The Hague now risks a fine of over one billion euros. The Netherlands has calculated that the deadline of 30 April will not be met: that's a doomsday scenario for the European Commission. In Brussels they fear that other countries will come knocking on the door asking for an understanding of "their particularly difficult situation." Then the budget pact will begin to falter - the very pact that was supposed to restore calm to the eurozone.

Dark clouds
The fall of the Dutch government is only one in a series of European cabinet crises. In the past two years nine governments have stumbled over the measures needed to meet the Brussels budget discipline. The Netherlands is the latest in this list but number 10 - the Czech Republic where the government hangs by a thread - has already announced itself.

More dark clouds are gathering. If the French elect socialist Francois Hollande in two weeks' time, France will get a president who wants to fiddle with the amount of control Brussels has over the national budget. And in the Netherlands, PVV leader Geert Wilders announced at the weekend that his election campaign will be aimed specifically at Brussels. "Against the EU, against the euro and against the three percent budget deficit."

European press reaction
International media are also providing a lot of coverage of the political crisis in the Netherlands. "The news these days is dominated by Holland and Hollande," writes The Guardian, referring to the French elections.

The Netherlands is the next victim of the euro crisis, headlines the German newspaper Die Welt. Now Geert Wilders has caused the coalition to collapes, the Netherlands faces a political crisis as well as an the economic crisis. 'PVV leader Geert Wilders is now in the same boat as the Southern European politicians he has so often ridiculed.Now Wilders is saying that too much saving has a negative impact on economic growth, purchasing power and unemployment. Die Welt points out that the economy, exports and consumption in Germany are improving, whereas the Netherlands is only scoring poorly.

The Belgian Standaard looks at the political crisis with some glee. Thus the paper writes that 'the Netherlands is adopting Belgian traits". The paper says that "for many months politics in the Netherlands has been adrift. And that's causing pain to our northern neighbours, like toothache. The Dutch economy is indeed anything but rosy."

The view from New York

The New York Times suggests that more uncertainty lies in wait for the eurozone as the crisis talks in the Netherlands have failed. According to the NY Times new elections in the Netherlands are unwelcome news for the eurozone, especially because the Netherlands is one of only four euro countries which - until now - has the AAA-credit status. The newspaper also points out that the Dutch government has always supported taking a hard line on Greece, but now finds itself in a crisis because it doesn't meet the requirements of the EU budget.

(/as)