Enough is enough. It is high time for Europe to adopt binding sanctions for countries that break the financial rules. That is what Dutch Prime Minister Mark Rutte will say on Sunday during the European Union summit where leaders will try to find a way out of the current euro crisis.
The Dutch government is the loudest and clearest voice calling for new, stricter oversight of countries in the euro zone. Prime Minister Rutte and his Finance Minister Jan Kees de Jager have launched a publicity campaign calling for an EU Commissioner for Budgetary Affairs, who would oversee and enforce new budget rules. In a recent opinion piece in the British newspaper the Financial Times they wrote,
‘Whoever wants to be part of the euro zone must adhere to the agreements and cannot systematically ignore the rules. In the future, the ultimate sanction can be to force countries to leave the euro.’
Out in front
The Netherlands has been ringing the alarm bell for years about countries failing to comply with the budget rules set out in the Growth and Stability Pact . Now the Prime Minister writes, ‘an agreement is an agreement’ and he wants automatic sanctions when countries break the rules. He does not explain what that would mean for the Netherlands itself, which, in the wake of the 2008 financial crisis, has been carrying a budget shortfall well over the 3 percent limit.
But the Dutch government is now going even further, pushing for new EU oversight of economic policy in all 27 EU member states, not just budgetary policy in the 17 euro zone members. Last week, Dutch Deputy Prime Minister Maxime Verhagen wrote in Dutch daily de Volkskrant that Brussels should be able to step in when any EU member state’s economic policy is deemed unacceptable:
‘When countries neglect to ensure a healthy economy, we have to be able to force them to do so.’
Not alone
This is strong language. But while the Netherlands is the only government making such far-reaching proposals, they are certainly not alone. Derk Jan Eppink represents a Belgian party in the European parliament. He says Germany is right behind the Dutch approach and only too happy with such outspokenness:
North v South
Europe, as always, is divided on how to proceed. The Dutch are firmly in the ‘northern’ camp -- countries with relatively strong economies and sound finances who want a strong currency with stricter controls. Germany and the Netherlands are joined by Austria and Finland as the strongest economies in the euro zone, and the ones the rest of Europe are turning to to save the currency. They will also contribute the most to the stability fund, the financial pot set up to help ensure countries can continue borrowing.
Kathleen van Brempt is a member of the European Parliament for the Socialist Party in Belgium. She says southern countries find the Dutch standpoint ‘arrogant’, and not in keeping with their history as one of the founders of the EU.
‘There is a lack of solidarity, which is precisely what Europe is based on. I’m hearing a lot of euro-sceptic opinions from the Netherlands. For instance, about Greece, that the Greeks have to solve it themselves, they caused the problems, etcetera. At the same time, the Dutch government is earning a lot from the euro crisis. It’s all getting to be very cynical.’
Van Brempt is referring to Dutch Finance Minister De Jager’s statements to parliament that lending money to bail out Greece is not only the right thing to do for the euro, but at least as important, it will bring back a healthy return for the Dutch taxpayer.
Paradox
The Dutch standpoint is paradoxical. The country has become increasingly sceptical about the European Union: voting 'no' in a referendum for a European constitution, holding up Serbia’s path to membership, and keeping Romania and Bulgaria out of the Schengen zone. Populist Geert Wilders has ridden this anti-Brussels wave and has now come to embody Dutch euro-skepticism. While not in the current coalition government, his support keeps it in power.
Partly because of Geert Wilders, the government talks a harsh line when it comes to Europe. But its new proposals would in fact mean a significant shift of political sovereignty to Brussels. Even as Mark Rutte rails against EU policies of the past, he embraces Europe as the solution for the future.
One thing is clear
If this sounds confusing, it is. Europe has entered uncharted territory, and must rethink many of the assumptions made in setting up a common currency. But from his vantage point in Belgium, Derk Jan Eppink says that when it comes to money, the Dutch are always perfectly clear.
(rk)
Email this Article
Printer-friendly version
Hi Holands wake up When the Sea Wave of Bailout in on the Pocket of Big coorp the Dutch line in the sand is gone like American
It is better that your government give to every citizen a Million of Euros than continue in the trench to bailtout governments, look back American citizen no job no money and soon no country.
Wake up
It is some of the very countries (France and Germany) who have been braking the rules for their financial benefits. One big fat lie after another.
Correction: in my earliest post please replace "Dow" with "S & P". I know many European nations have a financial transaction tax. Has the EU now enacted a FTT? It seems such a tax discourages speculators. The economist Joseph Stiglitz and others have advocated this in USA...so far to no avail. The powerful rich prefer to destroy this country and to endanger the rest of the world in their quest to become even richer and more powerful. As labor unions have weakened, the Democrats, starting with Clinton, have turned more and more to huge corporations to finance their increasingly expensive TV and radio campaigns. This is why Americans can no longer turn to political parties to pass a FTT here, or to halt the ten million foreclosures kicking families out of their homes, or to recover hundreds of billions of pension fund $, or to create jobs repairing railways, mass transit, repairing crumbling bridges, insulating homes, or to stop privatization of services. Our economy is broken and the broken political system cannot fix it. I hope EU can avoid going down this path...if it hasn't yet.
I agree with Peter but go farther. Banking industry must be separated from ""too big to fail" insurance companies. Pres. Clinton destroyed this separation. Obama continues with same economic "advisers" that counseled his crooked predecessor, the war criminal George Bush. Both our political parties rely on huge contributions from FIRE (finance, insurance, and real estate industries). They are corrupted and cannot take the steps to move out of economic collapse. A few politicians admit this. One said, "The banks run this place", when attempts to regulate failed. We need a truly independent entity to evaluate credit worthiness of countries and corporations, independent of the US government, independent of any one country. The voices of Brazil, Russia, India, China must be heard! What about African voices? This international forum and Occupy Wall Street give me hope.
1. Do EU economists count the value of raising children in a country's GDP? In the USA we ignore the value of traditional "women's" work: changing diapers, cooking for the family, housecleaning, shopping, doing laundry, etc. Until this work is valued, isn't "debt" being measured inaccurately? 2. Does the EU ignores the credit ratings provided by the 3 big US firms,Moody's, Fitch, and Dow Jones? I hope so. Everyone here knows they're corrupt, yet continue to quote the worthless statements by firms that lied about collateralized mortgage buyouts. These liars played a big role in destroying our economy. 3. Japan's debt is 225% of it's GDP before Fukushima disaster. Yet the country persists. Why aren't capitalist economists running in circles pscreaming about Japan being a terrible danger to the economic world order?
The Dutch solution is economically sound but a democratic mess. By all means stick to the rules but ceding so much power to Brussels will amount to riding on German coat tails.
Follow the rules or get out of the EU. What's wrong with that? There can always be a Northern allied union created between Germany, Netherlands and the Scandinavian countries. Enough with P.I.I.G.S. You're on your own, leeches.
The EU needs to become a federal republic. There is no room for all this nonsensical and very poor governance. There needs to be a European constitution with very strong requirements for the next 25 years of each member state to run surpluses in their budgets. Sovereign debt has to be paid off aggressively and economies liberalized. Countries like Greece, Ireland and even France and Italy will need to cut back even deeper and in some cases taking a hit on writing off sovereign debt is unavoidable. European banks also need to split up: consumer banking needs to be separated from investment banking.
Post new comment
Please be reminded all comments must be in English, short and to the point - guideline 250 words. Abusive and inappropriate comments will be removed.