Dutch Threaten Eurozone Exit for Profligate Nations

The Dutch say countries that won’t submit to stricter fiscal rules should consider leaving the euro.

Eurozone nations that aren’t willing to submit to a stricter enforcement of fiscal rules should leave the single currency area, the Dutch prime minister declared on Wednesday.

In a written statement to lawmakers, Mark Rutte suggested that countries that won’t commit to “strengthening budgetary discipline and the stringent enforcement of rules under independent supervision” should be forced out of the monetary union.

The Dutch leader envisioned the appointment of a “eurocommissioner” who would be empowered to subject countries to austerity measures if they violated the fiscal agreements of the Stability and Growth Pact repeatedly. This treaty, which was adopted by the seventeen members of the eurozone in 1997, maximizes deficit and debt ratios at 3 and 60 percent of gross domestic product respectively.

“Member states that aren’t prepared to put themselves in receivership can choose to leave the eurozone,” according to Rutte.

The Dutch, among the most stable and most creditworthy of European nations, previously insisted that the International Monetary Fund be involved in the bailing out of Greece and conditioned their financial support for heavily indebted nations in the periphery of Europe on the implementation of tough austerity programs there.

This week, it was revealed that Greece once again missed the deficit reduction targets of its first bailout program. A second, €109 billion financial aid package was committed to Greece this summer and awaits parliamentary approval. Without added support, the country would probably not be able to continue to service its debt obligations and have to declare bankruptcy.

The Dutch ruling coalition of liberals and conservatives has to rely on support from opposition parties for ratification of the second bailout effort because its ally in parliament, the far-right Freedom Party, is highly critical of European integration and would rather the Netherlands withdraw from the euro altogether.

Similar nationalist sentiments threaten to derail the European rescue effort of Greece in Finland and Slovakia. The Fins demanded collateral from Athens for its financial support which prompted an emergency summit of the Dutch, Finnish and German finance ministers in Berlin on Tuesday where no clear compromise was reached. The Slovaks, who only joined the eurozone in 2009, voted against the first bailout in August of last year and may well refuse to participate in the second one.