- Center-right parties in the Netherlands are due to form a coalition government.
- The four-party deal allows Mark Rutte to stay in power for four more years.
- The new ruling parties command only a one-seat majority in parliament.
The four parties
- Prime Minister Mark Rutte’s business-friendly liberal party (VVD) lost support in the election in March but remained the single largest with 33 out of 150 seats.
- The centrist Christian Democrats (CDA) have often governed together with the liberals. They have nineteen seats.
- The pro-European liberal Democrats (D66) are the most progressive party in the new coalition. They have nineteen seats as well.
- For the smaller Christian Union (CU), it is only the second time they will join the national government. They were needed for a majority after earlier rounds of talks with the Green party failed.
- Today parliamentarians review the coalition agreement their leaders have made. They may have criticisms and suggestions, necessitating further negotiations.
- If lawmakers approve the deal, party leaders could unveil the text as early as Tuesday.
- As early as Thursday, Rutte could then be named formateur by parliament. That would give him a mandate to install ministers.
- Talks with prospective ministers could last another week or two.
- Toward the end of October, the incoming cabinet would meet for the first time as a whole.
- King Willem-Alexander, the head of state, swears in the new crew.
- Rutte defends his government program in parliament.
Tax policies have leaked
The public broadcaster NOS has learned that the parties are planning various tax reforms:
- Tax reform: Income tax brackets will be reduced from four to two.
- Tax relief: For the elderly and middle incomes.
- Profit tax: Will be reduced from 20 to 16 percent for small companies and from 25 to 21 percent for larger companies.
- Sales tax: The low, 6-percent value-added tax rate on basic goods will be raised to 9 percent. Standard VAT rate will remain 21 percent.
- Home mortgage interest deduction: Will be reduced to 37 percent, effectively raising taxes on especially wealthy homeowners.
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Can the Dutch center hold? key
Tom-Jan Meeus argues in Politico that the fate of the Dutch governing model is at stake.
The incoming government is an unwieldy coalition of Christian and liberal parties and opposed from the left as well as the right.
The Dutch left, traditionally a strong proponent of consensus politics, now represent less than a quarter of the Dutch electorate.
As left-wing voters grow tired of the left’s unwillingness to work together, the parties are seeking to boost their image by frantically opposing the new government.
On the right, Geert Wilders may have failed in besting Rutte in the election, but his Freedom Party is still the second-largest.
Rutte’s refusal to consider governing with Wilders allows the Dutch firebrand to frame the weakness of the new administration as a result of Rutte’s unwillingness to build a staunch right-wing government.
Salary norm for the self-employed
Business channel RTL Z reports that the incoming coalition plans to introduce a €15-to-€18 hourly minimum wage for freelancers. Those who earn less would be considered salaried workers with full social benefits.
Most freelancers are high-skilled professionals and earn more than €15 or €18 per hour. But some “gig economy” workers, like couriers and cleaners, are nominally self-employed when in fact they have only one employer.
The four parties are not planning to introduce an obligatory unemployment insurance for freelancers.
The government nobody asked for key
Lex Oomkes writes in Trouw newspaper that nobody asked for this coalition.
The Christian Union and liberal Democrats don’t see eye to eye on issues like euthanasia and drugs, but they make common cause on climate and refugee policy. The two liberal parties share many economic policies, but the Christian Democrats share Rutte’s fiscal conservatism.
The reason the four nevertheless ended up in government together is because there were no other options. Talks with the Greens failed. The far-left Socialist Party refused to enter negotiations with the liberals. Labor decided it couldn’t stay in government after it suffered an historic electoral defeat. And nearly everybody ruled out a pact with the nationalist Freedom Party.
Liberal Democrat leader decides against joining cabinet
Alexander Pechtold, the leader of the liberal Democrats, has told the AD newspaper he is not joining the new government as a minister but will continue to chair his party in parliament.
A junior minister under Rutte’s predecessor, Jan Peter Balkenende, Pechtold argues the “stability of the coalition” is best served by him staying in parliament.
AD reports that Sybrand van Haersma Buma, the leader of the Christian Democrats, is expected to do the same.
Three parties approve deal key
NOS confirms that Sybrand Buma will continue to chair the Christian Democrats in parliament and not join the cabinet. Nor will Gert-Jan Segers, the head of the Christian Union.
The same broadcaster reports that lawmakers of the Christian Democrats, Christian Union and liberal Democrats have approved the coalition deal their leaders negotiated.
Members of Rutte’s liberal party are still talking.
Liberals also approve
Rutte’s liberals approved the coalition deal on Monday night.
The four party leaders met earlier on Tuesday to make final changes to the text. They are due to give a news conference around 1:30 PM local time. Dutch speakers can watch live here.
Parties seek to heal divisions key
The four party leaders expressed their hope that the incoming administration will heal divisions in Dutch society: between rich and poor, young and old, city and countryside, immigrants and natives.
Sybrand Buma and Mark Rutte, the leaders of the Christian Democrats and liberals, emphasized the benefits for middle incomes, their constituencies.
Alexander Pechtold pointed to investments in education and innovation, two of his liberal Democrats’ signature issues.
In addition to extra spending on schools, the four parties are planning several reforms in education:
- More flexibility for pupils transitioning from primary to secondary education.
- Secondary-school students will be able to take classes at different levels.
- Requirements for schools established on the basis of a certain philosophy will be relaxed.
- Tuition fees for first-year university students will be cut in half.
- Students who perform a voluntary public service will have a leg up when applying for government jobs.
New labor laws
The parties are planning various measures to encourage hiring:
- Judges will be allowed to grant dismissal if employers can partially meet various requirements as opposed to fully meeting only one.
- Workers will be eligible for a severance package from the beginning of their contract. Currently they only qualify after two years of employment.
- The period during which companies are allowed to hire workers on the basis of short-term contracts will be extended from two years to three.
- The period during which small businesses must continue to pay salary to workers who are ill will be shortened from two years to one. The law will remain unchanged for companies with more than 25 employees.
- The coalition will introduce a €15-to-€18 hourly minimum wage for freelancers. Those who earn less will be considered salaried workers with full social benefits.
The four parties seek to achieve €6 billion in tax relief by 2021.
- Income tax brackets will be reduced from four to two, giving tax relief to middle- and high incomes.
- Sales tax on basic goods will be raised from 6 to 9 percent.
- Companies that are based in the Netherlands on paper only will have to pay more tax.
- Corporate taxes will be lowered and dividend tax eliminated altogether.
- Tax benefits for expats will be reduced.
To meet the goals of the Paris climate accord, the parties intend to:
- Shut all coal power plants by 2030;
- Expand wind farms at sea;
- Eliminate the requirement that new homes be connected to natural gas; and
- Raise taxes on trucks and pollution.
Natural gas production will be cut by 7 percent.
Defense and security
The parties promise to:
- Add €1.5 billion to annual defense spending;
- Continue joint military training and procurement of defense equipment with other European countries;
- Add €267 million to police spending and €95 million to cybersecurity; and
- Allow municipalities to experiment with the legal cultivation of marijuana.
European policy matches Germany’s key
The four parties explicitly reject some of the proposals French president Emmanuel Macron has made:
- No steps toward transfer union.
- No fiscal capacity at the EU level to cushion economic shocks.
- Tie European subsidies to compliance with EU fiscal rules.
- If a eurozone country’s debt becomes unsustainable, investors should take the first hit.
The parties seek to achieve cost savings in health care by:
- Reducing government contributions to insurance premiums; and
- Making drugs and medical devices less expensive.
Taxes on tobacco will also be raised.
Predictable reviews key
Reviews of the coalition agreement are predictable: employers are happy with the changes to the labor code, environmental groups are cautiously optimistic, trade unions are critical and opposition parties pretend this is the worst deal they’ve ever seen.
- Employers’ federation: “The plans to improve the business climate, the extra investments and tax relief will make our country stronger.”
- Dutch brand of Friends of the Earth: “This climate law has ambition. Now the question is if the burdens and benefits will be shared fairly between companies and consumers.”
- Trade union federation: “The choices this government makes will make life more expensive for people while shareholders are pampered.”
- Socialist Party leader Emile Roemer: “Big companies see all the benefits … and the people with the lowest incomes and the public sector pay the bill.”
- Freedom Party leader Geert Wilders: “The biggest threats to the future of Europe and the Netherlands are terrorism and Islamization and the word Islam doesn’t appear even once.”
- Green party leader Jesse Klaver: “This is a government for the wealthy.” Although he does praise the plans for climate and energy.
- Labor Party leader Lodewijk Asscher: “This governments puts multinationals before people.”