Netherlands to Grudgingly Accept Third Greek Bailout

The Dutch are doubtful Greece will honor its commitments this time around.

Dutch prime minister Mark Rutte answers questions from reporters in Brussels, July 12
Dutch prime minister Mark Rutte answers questions from reporters in Brussels, July 12 (The Council of the European Union)

Parliament in the Netherlands is expected to approve Greece’s third bailout on Wednesday despite popular and political resistance to the €86 billion rescue package.

Although polls show almost one in two Dutch voters opposes the bailout, lawmakers from other parties are unlikely to support a no-confidence motion tabled by the opposition Freedom Party — which is the only way to stop the government from agreeing to help Greece.

The Netherlands, Europe’s sixth largest economy, should contribute €5 billion to the latest rescue effort which comes on top of €240 billion in support provided by European countries and the International Monetary Fund since 2010.

Prime Minister Mark Rutte would be forced to break a 2012 election promise not to support any more bailouts.

His parliamentary liberal party said on Tuesday it would after all vote in favor of the financial rescue plan agreed in July under which Greece is committed to implement far-reaching economic reforms, including higher sales taxes, pension cuts, a liberalization of the labor market and billions worth of privatizations, before it can access the bailout funds.

The liberals previously expressed doubts but Mark Harbers, the party’s financial spokesman, explained on Tuesday that they feared the Netherlands would be isolated in Europe if it voted against. “It’s Greece that should be isolated,” he told reporters.

While Greece’s previous bailouts were also conditioned on economic reforms, the country failed to implement many measures its creditors believed were necessary to boost Greek competitiveness and prevent another debt crisis in the future. Many in the Netherlands, which took a hard line in negotiations for the third bailout, are skeptical that Greece will honor its commitments this time.

Geert Wilders, who leads the nationalist Freedom Party, accused Rutte of “breaking the trust of the Dutch people” and said he would call a confidence vote on Wednesday.

Rutte’s liberals and the ruling Labor Party have only a one-seat majority in parliament but pro-European opposition parties, including the Christian Democrats and the liberal Democrats, are expected to back the coalition.

The Democrats are currently vying for second place in the polls with Wilders’ Freedom Party. At 29 seats, Rutte’s party would remain the largest in the 150-seat chamber but that is down from 41 seats it won three years ago. Labor is reduced from 38 to 13.

Dutch confidence in the European Union has decreased to a score of 4.8 out of 10, according to an Ipsos survey conducted in July.