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It is Time to Revive the Open-Mindedness of the Dutch

Submitted by on 12 Jul 2012 – 12:34

By Gerben-Jan Gerbrandy MEP


The recent collapse of the Dutch minority government provides the opportunity for radical reforms and restoration of the Dutch reputation. Over the past one and a half years the Netherlands changed from a progressive EU partner into an ‘awkward hardliner’. Strict immigration policies and a law-and-order agenda should now make way for European cooperation and investments in innovation, research, employment and sustainability. I believe it is time to change the turn of events.

The Netherlands has traditionally been an open and liberal society and one of the founding fathers of the European integration process. It has always focused on trade and international economic cooperation. As a consequence the Netherlands is the sixteenth-largest economy in the world, and one of the biggest investors in the world.  However, the minority government with liberal Prime Minister Rutte had too little ambitions to foster European cooperation and tackle the aggravating economic situation with progressive reforms. Forced by the far-right and anti-Islam Freedom party of Mr Wilders it introduced economic conservatism and focused on reducing immigration. It totally neglected the huge economic and societal importance of transforming our economy into a sustainable one.

The consequences of this short sighted policy are well known. The Netherlands is facing a large budgetary deficit of 4.6 percent in 2013. The Dutch economy was ranked in terms of performance just before Italy, Spain, Portugal and Greece. Interest rates rose, while the country was threatened by paralysis and the loss of its triple-A status. This dooming scenario forced the coalition partners to negotiate a new pact of cuts and reforms. With Mr Wilders´ far right Freedom party being part of the minority government the pact required his support. After seven weeks of negotiations on how to reduce the budgetary deficit from 4.6 to the agreed 3 percent EU target, the minority government collapsed when Mr Wilders abandoned negotiations. Having lectured Southern European nations on the need to control public spending, an embarrassing moment followed.

But what happened next was historical. Opposition parties took their responsibilities and backed necessary cuts to meet the EU target. In a remarkably short period of less than three days, five parties holding a small majority of the 150-seat parliament created a comprehensive package of cuts, tax increases and reforms. In the office of D66 party leader Alexander Pechtold a new comprehensive package was negotiated that would save 12bn euro, the so called ‘corridors agreement’.


Back on track

The ‘corridors agreement’ contains a large number of reforms in the labour-market and the housing-market. The deal calls for a lower mortgage-interest tax deduction, a freeze on public sector wages and increased ‘sin taxes’. It also reversed some of the cuts proposed by the minority cabinet on education, health, environment and culture. The agreement makes important structural changes that will help strengthen the economy for the coming years. The deal reduces the risk that the Netherlands will lose its tip-notch sovereign credit rating, but we still face uncertainty.

We are not there yet. By turning their back to Europe, the minority government has caused damage to the Dutch reputation which might not be so easy to mend. One might remember the launch of the hideous and despicable website of Mr Wilders where people could lodge complaints about the ‘tsunami’ of Eastern-Europeans benefitting from the Dutch social services. Many, like the Romanian ministry of Foreign Affairs, asked Prime Minister Rutte to condemn the website, but he refused to do so. The Netherlands also remains the only country still opposing Schengen enlargement to Bulgaria and Romania.


Elections in September


The elections scheduled for this September are likely to be the real test for the Netherlands. The first challenge consists of the painful reforms which are needed to get the country growing again. A new cabinet will have to reform labour laws, housing markets and our generous pension system to get the economy back on track.

In our rapidly changing world, conservative policies are less than ever the right answer. The rise of countries like Brazil, India and China with their incredible dynamics force European countries to innovate more quickly. The growth of the world population and the doubling of people with middle-class incomes the coming two decades will put huge pressures on resource availability. Only open, innovative and forward looking economies will be able to face these challenges.

Giving the Dutch people new perspectives, providing new optimism towards the future will be one of the biggest challenges of the upcoming elections. Promising the prosperity of the past, like the populists do, is tempting, but false. Those times will never return. Nevertheless, my children will still have better lives than I do if we transform the Dutch (and European) economy into a much more innovative, dynamic one.

Dutchmen are quite similar to Danes. Let us follow the Danish example after their latest elections. By opening our windows and doors. By investing in sustainable energy, in resource efficiency, in an open society with self confidence. That is the only way forward.