EU budget space: this must be the Dutch commitment
European negotiations on the establishment of the Stability and Growth Pact have begun. Substantive issues are an issue for the European Union, because it concerns economic requirements for reducing southern European debt. His reputation is also at stake for the Netherlands. The Netherlands is regarded as a stingy country that blocks European progress from a minority position. What is a lean position that stabilizes the eurozone and in which the Netherlands does not suffer any further reputational damage?
The budgetary agreements to be established under the Stability Agreements. The national debt may be 60 percent of the national income and a maximum of 3 percent for the budget deficit. For example, countries have their own economic buffers. Southern Europe wants to get rid of the rigid rules. With the low interest rates that are now available, debts are perfectly sustainable, is the idea, even if they are higher than 60 percent. And once it will be impossible for Italy to reduce the government debt from 150 percent to 60 percent in the foreseeable future. Furthermore, there are a lot of larger public finances at the EU level, such as a budget for the eurozone, eurobonds, and European financing for the energy transition, among other things. Undoubtedly, they will be on the table in a deal over the rules of the fiscal compact.
All this in the context of the tradition of rules, independent supervision, and no transfer union in which money moves from one country to another. When the Netherlands, Prime Minister Rutte first, defends those positions, everyone seems to be annoyed. With Denmark, Finland and Austria, the Netherlands forms the form of ‘the unwilling dwarfs’. In the Netherlands, too, the criticism of European action is strong: the Netherlands must move with the times, finally agree become pro-European, and stop with ‘loser strategies’. Experts and analysts who are advisers to the Ministry of Foreign Affairs even state that the Netherlands ‘always’ says no to ‘everything’. Others see Rutte as a slacker who signs at every European cross.
So much for the frame. In practice, the Netherlands is above its weight and is it always out for compromises.
Strong Negotiation
Despite its obvious diplomatic strength, the Netherlands can do even better. It is good to look back at the way in which the Netherlands negotiated the controversial corona fund of 800 billion euros last year. The firm negotiating style paid off, and the Netherlands delivered a major influence on the outcome. Eastern Europe had to respect the rule of law. Southern Europe agreement that support centers became subject to conditions and supervision. The Netherlands also agreed to the water and the wine and agreed to transfers and forms of Eurobonds. But what about a loser strategy?
However, the Netherlands missed two important ones last year. Firstly, the Netherlands had to negotiate even longer – and therefore harder – to also get the economic supervision properly arranged. The European Commission should set up independent supervisory structures for the corona fund. An example of this is the Central Planning Bureau in the Netherlands. It independently monitors reforms and investments, and reports on them in the media and to the cabinet and the House of Representatives.
European supervision Brussels does not work, because many socio-economic insights are taken in national parliaments. Supervision ‘from the outside’ has little control in the period itself is weak. Areas that EU policy does work are precisely those areas where the EU has enforced independent national regulatorssuch as food safety, aviation safety, independent central banks and competition policy.
Because the supervision of economic policy leaves much to be desired in many interests and the European Commission does not want to hand over supervision of the Dutch economy.
Emergency funds not for strong countries
Secondly, the Netherlands should have stipulated with the corona fund that economic competitiveness is on demand not getting money from emergency funds. Temporary European support funds will continue to be necessary, as banks can collapse if an unforeseen crisis can break out. It must be clear that support is then only for original countries. Germany, for example, has to prepare its own budget within its own budget to pay for digitization and the energy transition.
The argument that every country is entitled to ‘just return‘ (what it puts in, it must also get back) undermines meaningful use of EU funds, bloats budgets, and erodes solidarity where it’s needed. Northerners in the short term say that they do not want European pocket money, but when push comes to shove, they demand ‘their’ part – that they pay double and straight themselves.
Also read this opinion piece: It doesn’t help if the Netherlands always says ‘no’ in the EU
The Dutch commitment to the corona negotiations was effective, effective but incomplete. The lessons from this help to come up with a complete vision of the fiscal compact. There must be a system of independent, European economic regulators remote from the Commission, emergency support must be possible subject to conditions, and independent supervision, and no money from support funds in the future. For example, there is room for sufficient flexibility in the implementation of the Stability Pact and for temporary solidarity funds. In the case of the Dutch deployment, it does not matter whether it is weak, miserly or unwilling. It is about diplomatic professionalism and a well-considered vision of effective supervision in the EU.
A version of this article also in NRC in the morning of December 6, 2021