Too much, even for the Dutch?

Politicians and economists in the Netherlands have accused Prime Minster Mark Rutte's government of going too far in rejecting "corona bonds" to help countries hit hardest by the coronavirus, and by calling for the EU to probe why those states don't have the financial buffers to cope better with the economic shock.

The Dutch stance — and the blunt tone of Dutch leaders — has infuriated Southern European countries such as Italy, Spain and Portugal, reopening wounds still raw from the eurozone debt crisis a decade ago. At a time when thousands are dying and Southern Europe is asking for European solidarity, the Dutch stand accused of saying the wrong things at the wrong time.

“The image that Italians have of the Netherlands has been drastically polluted in just a few days,” former Italian Prime Minister Enrico Letta told Dutch newspaper De Volkskrant. “And not just in Italy … Look at the reactions in Portugal and Spain. They are surprised, severely disappointed reactions. Nobody expected that the Netherlands, one of the founders of the European Union, would behave like this at just such a moment.”

The Dutch are no strangers to criticizing the financial management of Southern European capitals and Rutte and his Finance Minister Wopke Hoekstra are sticking to their guns. But their decision to take such a strident position in the current crisis has prompted reflection among the political class at home — even within Rutte's four-party coalition, where the socially liberal D66 party has voiced criticism.

"The Netherlands, like many other governments, enjoys that feeling of 'We're a little bit stubborn.' But it is becoming clear that they are playing with fire, because if Italy falls, then the eurozone and EU falls and then we fall as well" — Sophie in 't Veld, MEP

“The Netherlands got rich through the EU. Now that jobs and incomes are at stake throughout Europe because of the corona crisis, we cannot let our friends suffocate,” Rob Jetten, head of the D66 parliamentary group, tweeted on Friday. “Only together can we survive.”

Sophie in 't Veld, a D66 member of the European Parliament, said the government's "attitude and tone were so inappropriate and so blunt, and I do not think you need to be a northerner or southerner to feel that."

"The Netherlands, like many other governments, enjoys that feeling of 'We're a little bit stubborn.' But it is becoming clear that they are playing with fire, because if Italy falls, then the eurozone and EU falls and then we fall as well," she told POLITICO.

On Monday evening, a second leader from the ruling coalition distanced himself from the hard line pushed by Rutte and Hoekstra. Gert-Jan Segers, leader of the small conservative Christian Union party, called for a new "Marshall Plan for southern Europe."

"Italy is a tragedy. That country is in ruins. As far as I'm concerned, the first message would be: 'We're going to help you," Segers told a talk show on public TV station NPO 1.

Even the president of the Dutch central bank, Klaas Knot, issued a veiled criticism of the government. “This is a test for the eurozone,” he told newspaper NRC Handelsblad. “When you see what is now happening with the coronavirus in countries like Italy and Spain, I find the call for solidarity extraordinarily logical.”

For some countries, the issue of European solidarity is crystallized in the issue of corona bonds — debt that would be backed by all members of the eurozone. The Dutch are not the only country to oppose the idea — Germany, Austria and Finland also have reservations — but they have been the most outspoken critics.

Knot said solidarity could come through corona bonds but also credit lines issued via the eurozone's bailout fund, the European Stability Mechanism (ESM) — an alternative solution championed by German Chancellor Angela Merkel and cautiously supported by the Dutch government.

Knot’s predecessor Nout Wellink was even more blunt in his criticism, saying that economic instability in Southern Europe would severely harm Dutch interests. “If the whole south collapses, the rich north ceases to exist,” he told Dutch national radio on Monday.

'Old arguments'

Opposition parties also lambasted the government’s approach. "Despite being faced by a shock inherently different from the eurozone crisis, the Dutch government has fallen back on the much-rehearsed arguments of ‘moral hazard,'" said Lodewijk Asscher, head of the Dutch Labor Party (PvdA).

"Failing to act means risking a crisis unparalleled in the history of the eurozone. The choice is between weathering this storm as a collective, or going under on our own."

Paul Tang, an MEP from PvdA, said Rutte and Hoekstra had not adjusted to a new reality. “In the Netherlands, a conservative fiscal policy is usually really popular,” he said. “But these old arguments don't make any sense in these new times."

Dutch diplomats have spent recent days on the phone trying to calm outrage among their EU partners, arguing in particular that Hoekstra had not intended to point fingers at any particular countries.

But Rutte, leader of the liberal VVD party, and Hoekstra have shown no signs of backing down. On Friday, Rutte again ruled out corona bonds and linked potential credit lines via the ESM to strict conditions.

“Look at the Netherlands, we have taken incredibly difficult measures over the past 10 years,” he said. “I would like other countries to do the same, and if they make use of this emergency shield, then they should also make arrangements to ensure that, should there be another crisis — economic or health or something else — that they are also able to deal with it.”

Despite the criticism at home and abroad, Rutte and Hoekstra have good domestic political reasons for sticking to their line, according to Rem Korteweg, a political analyst from the Dutch Clingendael think tank. The country faces a national election in a year and with the ruling coalition increasingly fractious, each partner is out to appeal to its base and to win popular support.

“Dutch politicians are first and foremost concerned with how they come across among their peers,” said Korteweg. “The Dutch parliament embraces Rutte and Hoekstra’s approach.”

Hoekstra’s party, the center-right Christian Democratic Appeal (CDA), is looking for a new leader and the finance minister is considered a favorite for the job, alongside Health Minister Hugo de Jonge.

“Both are now trying to boost their profile — De Jonge by dealing with the corona crisis, while Hoesktra is doing that, among other things, by his performance in Brussels,” Korteweg said.

The Dutch style of politics doesn’t always go down well abroad, even if it gets results, said Korteweg, who last year co-authored a study about European perceptions of Dutch EU policy titled "Effective without Empathy."

He said that what is seen in the Netherlands as a virtue — directness — is viewed in the rest of Europe as “rude, even a little insulting, and moralizing.”

The question for the Netherlands is whether the empathy deficit is now damaging its effectiveness.

Two days after Hoekstra made his controversial proposal last week, Agriculture Minister Carola Schouten asked for EU support to compensate the Dutch flower industry for the impact of the coronavirus crisis. Solidarity for tulip growers was not forthcoming.

“That the ministers didn’t think those two things would be connected is almost embarrassing,” said Korteweg.

This article has been updated to add comments from Gert-Jan Segers.

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