Dutch resistance stands in way of deal on EU recovery fund
ft.com/content/13c622ad-9b1b-44ca-8054-206841...
ft.comPosted Jul 9, 2020, 12:29 PM UTC
18346
ft.comIt's always the same shit. Northern Europe can pay for the fuck ups of Southern Europe. Pay the most get the least. Pay the least get the most
12†
It's not that simple, is it?
The Netherlands, along with Ireland, run a tax haven that probably siphon off significant tax revenue from other European nations. Germany benefits from having a currency that is less expensive than the DM would be, greatly increasing its export competitiveness.
Of course, the above doesn't have to contradict the fact that Southern Europe is just badly governed. And I think that's where the real tragedy of the Euro is - it allows everyone to deflect blame from their own failings. Within the Eurozone, there's always someone else to point the finger at. And Europe just doesn't have the historical unity to smooth these things over; they were never a single political entity.
28
On point
7
What is significant? Italy loses about 100 billion a year to tax fraud, while ALL the EU countries together lose 10 billion to the Netherlands. Yeah.. that needs to be fixed obviously, but really isn't the problem here at all.
2
[deleted]
1
And as a staunch remainer, that’s why Brexit happened. Huge austerity cuts at home while we sent cash off to be wasted in Southern Europe.
2
[deleted]
-1
Same with red states vs blue states. Blue states pay more in taxes, red states and corps eat most of it
-2†
Would like to see the stats on red states vs. Blue states and how much they contribute/ take to/from the federal tax base out of curiosity
3
God I love the Dutch so much. Efficient, precise, no-nonsense people.
9
And running a tax haven*.
14
Were running one* the mno’s are already leaving
1
*Italy
-2
[deleted]
-2
Italy’s government is poor, their inhabitants are not, (second homes, no big wealth tax etc) idk if you would call that a tax haven.
0
Obviously all the frugal four / northern countries. The southern ones are very good at taxing their people.
/s
-1
Regarding the comments and the article: it is a big “one size fits none”. No one is truly happy, no one is truly benefitting. The EU is a true miracle that it still exists today.
3
It's as if a compromise requires everyone to... compromise. What a surprise!
More generally, cooperation has a cost of its own, yet the benefits outweigh it. It's not a difficult concept.
1
[deleted]
1
I see Northern Europe is trying to wreck Southern Europe's economies again.
1
If these sorts of deals continue to be made, mark my words the Netherlands will be the next to leave Europe. Once that happens I think we will see a real domino effect of counties following, and the EU falling to shit.
If they just implemented some conservative and rational recovery plans (e.g. loans not grants) I'm sure many more people would be fine with it.
0†
Yeah, Netherlands leaving a common area that allows them to benefit 5x what they invest. Seems logical.
16
That will never happen. We like the Eu as a trade-deal not as separate governing body that wants more and more money. Especially if that is financed with loans that ultimately lead to increase in intrest rates in the Netherlands and lower pensions. The save when you have a lot and spend the savings when you are low on cash is a virtue in our eyes.
6
The issue is that if these sorts of deals are not made, Italy (the 3rd largest EU economy) will leave
3
Netherlands leaving wouldn’t be e massive blow, they will continue to create tax incentives and drive business away from other European hubs
2†
The Netherlands is currently the sixth largest economy in the EU. Maybe they are small in terms of inhabitants and sqm2, but you shouldn’t underestimate the size of its economy.
14
[deleted]
0
I agree by itself wouldnt be a huge blow to the EU, but once they leave I think other countries (e.g. Italy and Poland) will follow, and once they do they can then create a trade union together with the U.K and incentivize other European countries to follow suit.
Also, the Netherlands is a huge transportation hub for Europe which I believe is a rather large bargaining chip in negotiations. At the end of the day, I hope it doesn't happen and we can all come up with a plan that works for everyone, but then again it's up to the politicians who dont understand shit.
7
Yes I agree but perhaps with Netherlands out the window we might see a stronger union with countries seeing more eye to eye and perhaps see a more compact union rather than a fragmented one. This is a big IF but I it would be interesting to see.
1
Yeah, they would create a common trade area where Netherlands would put all their products on other markets, have fiscal policies to steal companies from other countries, but the others would not benefit from anything from it. Seems a great bargain for the Netherlands. I cant see why Italy or Poland would not accept it!!!
1
The Netherlands pretty much created the EU. It was their idea and their diplomats that made it happen.
Them stepping out of it is very unlikely.
1
Dutch arrogance never gets old!
-6†
FTFY: Dutch arrogance realism never gets old!
-1†
Nah, i think the original is correct
-3†
Spoken like someone who didn’t read the whole article
-1
#Dutch resistance stands in way of deal on EU recovery fund
European leaders beat path to PM Rutte’s door in bid to persuade him on €750bn programme
Mehreen Khan and Jim Brunsden in Brussels
With a week to go before a crunch EU summit to thrash out a deal on a €750bn economic recovery plan, Europe’s major leaders are all heading to see the man standing in their way: the Netherlands’ Mark Rutte.
After visits from French president Emmanuel Macron and European Council chief Charles Michel over the past two weeks, the Dutch prime minister meets German chancellor Angela Merkel in Berlin on Thursday — the latest and perhaps most significant visit in a diplomatic dance that is increasingly being centred on The Hague ahead of next Friday’s showdown in Brussels.
As the informal chief of the EU’s “frugal four” alliance, Mr Rutte is the man the rest of Europe’s leaders need to convince of the merits of a package of measures designed to revive Europe’s economy after months of pandemic-induced hibernation. Italy’s Giuseppe Conte, Spain’s Pedro Sánchez and Portugal’s António Costa will all head to The Hague over the next week to make their case to the Dutchman.
“The Dutch have always been difficult in EU budget negotiations, but now there is the feeling that they are really punching above their weight,” said Catherine De Vries, professor of political science at Bocconi University. “The procession of EU leaders heading to Rutte shows Dutch voters that he is fighting for their national interest.”
Mr Rutte is the EU’s third longest-serving leader and has grown in diplomatic stature since Brexit. With the UK’s departure, the Netherlands has stepped up to become the bloc’s most vocal advocate for a smaller common budget and further liberalisation of the single market.
Mr Rutte and his conservative finance minister Wopke Hoekstra have also spearheaded a group of small “Hanseatic League” nations — an alliance of northern fiscal hawks — who successfully neutered French-driven plans for a eurozone budget last year.
The Hague now stands in the way of a landmark proposal for the EU to hand out billions of euros in grants to economies hit by the pandemic — a plan backed by France and Germany. “We simply hate it,” a Dutch diplomat said.
Mr Rutte and his frugal quartet — made up of the Netherlands, Austria, Sweden and Denmark — want Brussels’ proposal to be amended so that only loans, which eventually have to be paid back, are distributed to crisis-hit economies and not grants.
The Netherlands is also demanding that recipient countries carry out sweeping economic reforms to their labour, tax and pension systems to drive their economies towards competitiveness. Mr Rutte wants tranches of cash to be released when governments fulfil their reform promises and the ability to withhold money in case of non-compliance.
The stance has prompted a backlash from southern Europe, with Greek prime minister Kyriakos Mitsotakis warning this week that strict conditionality is “politically unacceptable” and akin to the “troika-style” monitoring by EU, European Central Bank and IMF officials associated with bailouts. Spain’s Mr Sanchez has said it is “not the right moment” to mix the recovery money with “another set of policies”.
The Netherlands’ democratic concerns over how to govern the recovery fund are shared by a wider group of countries that want member states to have a collective say in how each government plans to spend the money. But it is Mr Rutte who has drawn the most attention and opprobrium during the negotiations.
“The Dutch have never cared about having a pretty face in these talks. They come to Brussels to defend their national interest,” said an EU diplomat. “They irritate many because their bluntness can be seen as arrogance.”
During his blitz of bilateral meetings, Mr Rutte has presented European leaders with a quid pro quo: the price for greater financial solidarity is greater involvement in your national affairs by the rest of the EU.
A senior diplomat said that during his dinner with Mr Rutte in The Hague at the end of June, Mr Macron was taken aback by the way the Dutch leader questioned him about his plans to continue with contentious labour market and pension reforms in France. “This is the logical consequence of what the recovery fund means. The penny is beginning to drop,” said the diplomat.
Dutch politicians say the country’s deep suspicion about funding EU spending stems from years of growing mistrust between the northern and southern parts of the eurozone over what the rules of the game should be when it comes to risk sharing.
Mr Rutte was prime minister during successive Greek bailout programmes from 2010 to 2015, during which his government eventually caved in and approved loans despite vociferous opposition in the country’s parliament. “The Greek crisis nearly brought down his government,” said a national official.
By contrast, Mr Rutte’s handling of the pandemic and his obstinate stance over the recovery fund has won him plaudits at home. His ruling centre-right Party for Freedom and Democracy (VVD) is enjoying its highest level of popularity in more than three years — putting Mr Rutte in pole position to win national elections next March.
Ms De Vries said growing domestic popularity could help the Dutch prime minister sell a final deal over the recovery fund later this summer. “Rutte knows he has to compromise in the end. The Dutch see themselves as book-keepers. They are willing to give money, but want to know where it is going,” she said.
Follow on Twitter: @mehreenkhn, @jimbrunsden
“The Netherlands is also demanding that recipient countries carry out sweeping economic reforms to their labour, tax and pension systems to drive their economies towards competitiveness.“
Yeah, we all know that’s never gonna happen in the garlic belt unfortunately. They will use the corona virus as a way to get free money to cover up the fundamental flaws in their system. Bravo!
Problem is this sort of pragmatism, while well intentioned, isn’t particularly frugal tbh. Just look at the Greek case- quicker action, and an open purse would have meant a much quicker recovery, at a significantly smaller cost, even to the Nordic neighbors. Austerity is not always good policy. What I do have sympathy for, is the argument that European generosity (from the European Union) does, and must mean, that other countries will have a say on a countries’ financial and internal politics. It cannot be another way- if the European Union is truly to be a fiscal and government union, where it also gives ample amounts of state aid and bailouts, it must also be able to have influence on individual countries’ budgets and finances.
It isn't just about Greece, Italy, Spain and Portugal. It is much more complicated and needs nuance. Some examples to illustrate:
Look, I get the enormous fear that the nordics and the Dutch have of moral hazard. But at the same time, I do think that to some extent, the actions that the fear causes are more harmful than what they are afraid of. Case in point Greece: the cost the Nordic countries and Europe had to ultimately pay for the Greek bailout was many times greater due to protracted negotiations than they would have been if they had just shut up and paid the first times.
I agree reforms are necessary in many ways. France has done a lot under macron, but more can be done.
Problem with these agricultural reforms, and why they aren’t always done, is that massive improvements in technology and productivity gains can also lead to massive decreases in necessity of labor- in a country where unemployment is still very high, this can lead to even greater social unrest. This sort of transition maybe should be left for another moment...
I think to some extent part of the solution, can and should be giving more power to Europe, because a lot of these reforms that are needed in these countries are not done due to political difficulties at home. Also, do you have a source for this? I’d like to see how they calculate it; because according to here, the disparity is actually very small, and Netherlands works less than Spain and Greece on average...
I mean, macron might have done things with the right intentions, and while I agree with your criticism, and it’s seeming hypocrisy, I do think he underestimated French politics. He couldn’t and shouldn’t have done things the way he did them, in that it hurt disproportionately the countryside, and the poor and they were infuriated in part due to the large scale of social reforms he had already started out with. While he also had plans to help with some other policies, maybe he shouldn’t have left those for last.
Greece, Spain and Portugal have made a lot of efforts since the 2008 + Greek crisis, so I think you might be a bit unfair there. A country like France will struggle a lot more to do these reforms. Lots of economic / social tensions have been building up since 2008, Macron will struggle to have anything done by 2022.
Frankly, the Southern countries are tired of being the only ones making concessions towards the free market. The Northern trading economies greatly benefit of the single market and currency; but their governments are not willing to make concessions to make up for the competitiveness their Southern allies sacrifice.
Netherlands just want to push their ordoliberal ideology to countries with different economical situation and expect it to work like a magic recipe.
The reasoning is "We believe it works for us so it will work for you".
Crises from the last 20 years showed it doesn't work unless you're exactly in the same conditions as they are (conditions that can exists because of the others').
The failure of this ideology in Greece is quite spectacular, yet there is no questioning of the validity of the method.
What kind of ally blackmails you to adopt his political ideology. Is it the Cold War ?