Rutte Cornered on Tax Cut, Why France and Germany Treat Trump Differently
Dutch prime minister Mark Rutte is in trouble. When his latest government, a coalition of Christian and liberal parties, came to power in October, he claimed there was no paperwork to support its contention that the Netherlands needed to eliminate dividend tax altogether in order to remain competitive. Now it turns out the Finance Ministry did write a series of memos on the topic — and was doubtful the tax played a major role in companies’ decisionmaking.
The Finance Ministry produces a lot of memos when political parties are negotiating to form a government, so it is possible that Rutte didn’t see these.
Except this was by far the most controversial policy of the new government. None of the four parties had promised to cut dividend tax in their manifestos. There had been no public debate about it.
The suspicion in The Hague is that Rutte’s former employer, Unilever, and Royal Dutch Shell lobbied to get the tax removed.
Opposition parties have already called on Rutte to step down. That is unlikely. Prime minister since 2010, Rutte has a knack for talking his way out of problems and the ruling parties have no incentive to force him out. Read more
Germany Approves Russian Pipeline, Five Stars Call for Deal with League
German regulators have approved the completion of the Nord Stream 2 pipeline, which would help Russia bypass Ukraine and its other former satellite states in Eastern Europe.
Germany and the Netherlands, the two main beneficiaries of the pipeline, are virtually isolated in Europe in their support for it.
Nord Stream 2 would double the capacity of the existing Baltic Sea pipeline, but it makes no economic sense. Russia uses perhaps 60 percent of its existing pipeline capacity. The only reason for adding a connection is that Russia wants to be able to blackmail Ukraine without interrupting its gas supply to the rest of Europe.
Regulators in Denmark, Finland and Sweden still need to sign off on the project. Read more
Mainstream Parties Win Dutch Elections, Catalans to Swear In President
The far-right Freedom Party and the far-left Socialists underperformed in municipal elections in the Netherlands on Wednesday.
The ruling liberals and Christian Democrats shared first place. Both got 13 percent support.
Local parties took 33 percent of the vote, up from 28 percent four years ago.
The Greens gained at the expense of Labor and the liberal Democrats, especially in the major cities. Although they are still counting the votes in Amsterdam, the Greens are expected to overtake the liberal Democrats as the largest party there.
Cosmopolitan, left-leaning voters probably switched because they are disappointed the liberal Democrats went into government with three right-wing parties.
The outcome is nevertheless unlikely to destabilize Mark Rutte’s coalition, which includes the small Christian Union. Read more
Five Stars Eye Coalition, Dutch Form Anti-Macron Pact, Cohn Resigns
Italy’s Five Star Movement may go into coalition after all. Having placed first in the election on Sunday, the populist movement is reportedly eying an accord with the left.
The Five Stars, center-left Democrats and left-wing Free and Equal would have a majority in the new parliament.
The Five Stars and Free and Equal share views. Free and Equal was formed last year by Democrats critical of Matteo Renzi’s market reforms.
Renzi has come out against a deal, calling the Five Star Movement “anti-European”. But he is on his way out as leader. The rest of the party may be willing to reverse his signature labor reforms in return for staying in power.
For the rest of Europe, a Five Star pact with the left would be better than a Five Star pact with the right. The worst-case outcome would be a government of the Five Stars, (Northern) League and Brothers of Italy — parties that are anti-EU, anti-immigration and pro-Putin. Read more
Rutte Urges EU Pragmatism, May’s Speech Heard Very Differently in Europe
Dutch prime minister Mark Rutte called for pragmatism in a speech in Berlin in Friday. The best way to take the wind out of the sails of Euroskeptic parties, he said, is to show results:
Lofty visions do not create jobs or security. Nor does shouting from the ends of the political spectrum. Only hard work […] produces results that benefit people in their daily lives.
The Merkelian rhetoric is a reality check for French president Emmanuel Macron, who has proposed far-reaching reforms in Europe.
With Britain, traditionally an ally, leaving the bloc, the Netherlands is becoming more vocal in resisting what it — and the German right — fear would amount to transfer union: the permanent subsidization of poorer member states by the wealthy.
There was a discrepancy in coverage. Dutch media emphasized the many positive things Rutte said about the EU. Foreign outlets focused on his “red lines”. The reason is that Rutte is considered more of a Euroskeptic at home than he is abroad. Read more
Dutch Hope for Smooth Brexit, Russians Have Little Faith in Trump
Mehreen Khan reports for the Financial Times that the Dutch are lobbying both sides in the Brexit negotiations: They are pleading with the Brits to decide what they want and trying to ensure in Brussels that the United Kingdom is given plenty of room to reverse course or rethink red lines, whether it be on the customs union or anything else.
The reason: close relations across the North Sea.
Britain’s erstwhile continental ally has been a reliable partner on everything from EU budget contributions to the single market but is now uniquely exposed to the economic and emotional side-effects of Brexit.
In France, by contrast, attitudes have hardened. Since Emmanuel Macron’s election last summer, the share of French voters who wish the British would change their minds has fallen. Tony Barber argues that Brexit is now seen as not a loss but a potential gain to France. Read more
Ruud Lubbers Played Small Role in East-West Nuclear Diplomacy
Former Dutch prime minister Ruud Lubbers died on Wednesday at the age of 78. A Christian Democrat, he was the country’s longest-serving prime minister, leading three coalition governments between 1982 and 1994.
I had a chance to interview Lubbers when I interned for the Dutch weekly Elsevier in 2012. We were working on an India edition and Lubbers was known to have a relationship with the Gandhis.
In his flat in Rotterdam, Lubbers told me about his first meeting with Rajiv Gandhi, the Indian prime minister, in 1985. Read more