The Netherlands and the financial crisis

Netherlands
Netherlands Institute of International Relations ‘Clingendael’
 
Dutch public opinion concerning the EU response regarding the financial crisis shows a watershed between the period before and after the agreement on the EU economic recovery plan. Before the December European Council in Brussels, the Netherlands witnessed a strong national coherent sentiment to fight this crisis, which was perceived as being a legacy from foreign origin. Prime Minister Balkenende describes this attitude as typical Dutch: “when cycling against the wind, Dutchmen will only pedal faster”.[1] In this period, concerns on the absence of the EU in the financial crisis started to mushroom.
 
After the European Council, the public attention focussed more on the Dutch benefits of the single European market and the strong monetary system for the Netherlands. On the whole, the European approach to the financial crisis received relatively little attention in Dutch media. Most attention was awarded to Minister of Finance Wouter Bos, who received broad praise for his decisive approach in times of crisis. The Dutch government’s policies of nationalising and supporting vital banks (Fortis, ABN Amro, ING), guaranteeing inter banker loans, and fiscally supporting small and medium enterprises, are aimed at securing capital flows within the national economy, and received national and international praise. Minister Bos was even voted politician, and more recently, Dutchman of the year by respectable media.
 
Since most of the national measures to address the economic crisis had already been taken before the European plan was agreed upon, the general Dutch expectations of the EU vis-à-vis the crisis were moderate. In the Netherlands, they are perceived as a ‘toolbox’ for national policies in the field, a guidebook listing the possibilities and actions for the member states’ governments. The added value of the European recovery plan has to be found, according to Minister Bos, in the coordination of the 27 national policies.[2]
 
By the end of the year, however, Prime Minister Balkenende praised the European Union’s response, and stated that the relatively small effects of the economic crisis within the Eurozone have demonstrated the benefits of European cooperation.[3] The Euro, according to Balkenende, has demonstrated to be a protective wall against the monetary violence of the international financial crisis, which has to be seen as an opportunity to strengthen European cooperation. Most likely, the Prime Minister deemed this plea necessary, since the praise for the EU approach to the financial crisis had not been given as much coverage as the negatives. These negatives consisted in particular of the lack of financial control also on the European level, and the constant quarrels between the capitals and Brussels, in the period leading up to the agreement on the European recovery plan at the European Council of December. Several national members of parliament, who deemed the EU recovery plan to be unnecessary, and a ’rubber stamping machine’ for national plans, voiced these negative concerns.[4] Also, the alleged leniency towards state aid and the stabilisation pact has received mixed reactions among Dutch parliamentarians.[5]
 
However, these diverse opinions can be explained when one considers the position the Netherlands took before and during the negotiations of the recovery plan. Balkenende openly stated just two weeks before the European Council, that the 1.5 percent contribution of the member states to the recovery plan was too high, and that the Netherlands had already taken enough measures to combat the crisis.[6]
 
Debate in the Netherlands on the international power constellation concentrated on the (economic) downfall of the US as a world power. In reaction, pleas to form a strong voice of the EU vis-á-vis international financial affairs have started to mushroom, with some ministers openly supporting the French offer to continue to lead Eurogroup, after the end of the French Presidency.[7] However, this does not mean that the Netherlands is keen on having a single EU seat within the governing bodies of the International Monetary Fund (IMF) and the Worldbank, which would imply it to give up its own permanent seat. Instead, Minister Bos and Prime Minister Balkenende called for an increased mandate for improved capacities of the IMF in the international crisis, strengthening its leading role in the world economy.[8]




[1] Jan Peter Balkenende: Op karakter (With character), Het Financieele Dagblad, 20 December 2008.


[2] Kredietcrisis. Iedere Europese regeringsleider heeft zijn eigen recept voor het bestrijden van de recessie (Credit crunch. Every European head of state has his own recipe to solve the recession), NRC Handelsblad, 11 December 2008.


[3] Jan Peter Balkenende: Op karakter (With character), Het Financieele Dagblad, 20 December 2008.


[4] Brussel had beter geen herstelplan kunnen maken (Brussels better had not made a recovery plan), Algemeen Nederlands Persbureau, 1 December 2008,available at: http://www.nu.nl/economie/1865767/brussel-had-beter-geen-herstelplan-kun... (last access: 26 February 2009).


[5] Algemeen Dagblad: Kamer verdeeld over coulance met Europese regels (Parliament divided over leniency towards European rules), 26 November 2008.


[6] Nederlands Dagblad: Premier bekritiseert EU-plan voor economie (Prime Minister criticises EU recovery plan), 26 November 2008.


[7] Bos neemt voorstel Sarkozy over Eurogroep serieus (Bos takes Sarkozy’s offer concerning the Eurogroup seriously), Algemeen Nederlands Persbureau, 24 October 2008.


[8] Le Monde: La stabilité financière, bien public mondial, 4 November 2008.