The Hague to get taste of its own medicine

The Dutch economy is not what it was. According to forecasts published by the Bureau for Economic Policy Analysis, the Centraal PlanBureau (CPB), in 2013, the Netherlands’ budget deficit will reach 4.5% of GDP and growth will decline to less than 1%. If it is to respect European budgetary rules, which stipulate a deficit of less than 3%, the Dutch government will have to come up with a further 9 billion euros of savings to add to the 18 billion euros of budget reduction measures that have already been planned.

This unpleasant surprise has put pressure on the coalition formed by the liberal VVD and Christian democratic CDA with external support from the populist and anti-European PVV: the PVV has already indicated that it will not toe the line imposed by Brussels. In short, as the De Volkskrant headline points out, the Dutch government is faced with “an infernal task”.

For its part, NRC Handelsblad explains that “the government has been shackled by two chains” that leave very little room for manoeuvre: on the one hand there is the “European outlook”, and on the other, “the economic outlook”. With this in mind, the daily adds that the hard-nosed attitude displayed by “the government and in particular Finance Minister Jan Kees de Jager (CDA)” with regard to the most indebted countries in the eurozone will put the administration in an awkward position -

It will almost certainly have no alternative but to swallow the harsh medicine that it has imposed on other countries. […] Eastern countries are hardly likely to be sympathetic and those in the South will be overcome by malicious joy.

This situation will be compounded by the fact that the Netherlands will not be able to count on much in the way of understanding from the Commission. As De Volkskrant notes, the country has always supported Economic and Monetary Affairs Commissioner Olli Rehn in his role as “an unforgiving schoolmaster” intent on imposing full respect for stability criteria, and this will still be the case even if other countries are in similar trouble -

Madrid is faced with a deficit of 8.5% which will have to be reduced to a maximum of 3% next year. For weeks, Spanish Prime Minister Mariano Rajoy has assailed Brussels with arguments designed to obtain more time for the consolidation of his public finances.

Finally, writing in the daily Trouw, columnist Rob de Wijk remarks that the Netherlands should stop trying to teach lessons to the “the garlic countries” (a Dutch nickname for the Southern European states) -

Of all of the rich European countries, the Netherlands is the worst off. The recession here is as bad as it is in the garlic countries that we have relentlessly and disdainfully found wanting.