Dutch prime minister Mark Rutte has tendered his government’s resignation to King Willem-Alexander.
With only two months to go before elections, and the government remaining in a caretaker capacity to manage the coronavirus crisis, the resignation is largely symbolic.
But smaller parties in Rutte’s coalition felt they had to take responsibility for what an inquiry described as an “unprecedented injustice” in the tax service, which wrongly accused more than 20,000 families of fraud.
Massive rescue programs have prevented business failures and unemployment on the scale of the Great Depression, even though last year’s economic contraction was nearly as bad. The European Union agreed a €750 billion recovery fund, financed, for the first time, by EU-issued bonds. The money comes on top of national efforts. The United States Congress passed a $2.2 trillion stimulus, worth 10 percent of GDP, in March and added another $484 billion in April. An additional $900 billion in relief was included in this year’s budget.
Joe Biden, the incoming American president, wants to spend $2 trillion more over the next four years to transition the United States to a greener economy and create a public health insurance program. Corporate tax would go up from 21 to 28 percent.
In Spain, a socialist government has introduced the biggest budget in Spanish history — partly to cope with the impact of coronavirus, but also to finance digitalization, electric car and renewable energy subsidies, infrastructure and rural development. Taxes on income, sales and wealth are due to increase.
In the United Kingdom, the ruling Conservative Party is building more social housing and it might renationalize rail. Unlike during the last economic crisis, it does not propose to cut spending even though tax revenues are down.
Same in the Netherlands, where all the major parties agree the government needs to do more to reduce pollution and prevent people at the bottom of the social ladder from falling through the cracks.
I’m not opposed to more government per se. I’ve argued that the United States should imitate countries in Northern Europe to improve its public services, particularly child and health care and housing.
Aruba and Curaçao have agreed to liberalize their economies in order to qualify for continued financial support from the European Netherlands, without which the islands would almost certainly go bankrupt.
The coronavirus pandemic has brought tourism, on which the islands depend, close to a standstill.
Sorry for the lack of new posts in recent weeks. I’ve moved back to the Netherlands from Barcelona and finding and furnishing an apartment has taken up most of my time.
Good news was awaiting me here, though. Forum for Democracy, a Putin-friendly, far-right upstart that only a year ago looked like a credible challenger to Prime Minister Mark Rutte’s center-right liberal party, is on the verge of collapse. Thierry Baudet, the party’s co-founder and leader, has stepped down.
Baudet — one of the few Donald Trump admirers in Dutch politics — broke with other party leaders to defend Forum’s youth wing, which for the second time this year was revealed to be a hotbed of far-right extremism. Het Parool of Amsterdam reported this weekend that multiple members had shared neo-Nazi content in the movement’s WhatsApp group.
In May, the party ejected three members for sharing similar content.
Baudet has winked at the alt-right with calls to defend “boreal” (northern) civilization from cosmopolitan liberal elites, who would “dilute” Dutch society by allowing immigration.
The Netherlands’ ruling liberal party has further moved to the center in its manifesto for the upcoming election, arguing that the coronavirus, climate change, American disengagement and instability in the European periphery call for a stronger state and a stronger EU.
It’s not sudden shift. The traditionally anti-statist and mildly Euroskeptic liberals have become more middle-of-the-road during the ten-year prime ministership of Mark Rutte, who will be seeking a fourth term in March.
They have overtaken their traditional rivals on the right, the Christian Democrats, who are polling at a mere 8-10 percent compared to 25-28 percent for the liberals — faraway in first place, but short of an absolute majority.
The manifesto therefore won’t be implemented in full, but it is telling the party is already signaling a willingness to move to the left in a future coalition.
The draft has yet to be approved by members. There are liberals who complain Rutte has been too willing to compromise with left-wing parties and left a space on the right for Forum for Democracy and Geert Wilders’ Freedom Party, which are polling at a combined 15-19 percent. But liberal rebellions against the party leadership are rare.
Aruba, Curaçao and Sint Maarten are closing in on a deal with the European Netherlands for hundreds of millions of euros in support to cope with the impact of COVID-19.
The sticking point in negotiations has been the Netherlands’ insistence that Dutch officials would carry out and monitor economic reforms on which the bailout is conditioned; a demand Caribbean leaders argue is incompatible with their autonomy.
Prime Minister Eugene Rhuggenaath of Curaçao, the largest of the three self-governing islands, told lawmakers this week that a compromise is at hand.
The Dutch supervisors would remain, but any decisions they take that affect spending and taxes would need to be ratified by the island legislatures.
The government of Curaçao would also be consulted on the appointment of one of the three supervisors.
Antilliaans Dagblad reports that a majority of lawmakers on Curaçao could agree to those terms.
The Netherlands’ ruling center-right coalition unveiled an expansionary budget on Tuesday, when King Willem-Alexander read out his annual speech from the throne to set out the government’s priorities for the next fiscal year.
Whereas the Dutch government, then also led by Mark Rutte, raised taxes and cut public spending during the last economic crisis to keep its budget deficit under the EU’s 3-percent ceiling, it now argues against austerity and is borrowing the equivalent of 7.2 percent of GDP (down from an earlier estimate of 8.7 percent).
Rutte argues the savings made in previous years allow the government to avoid cuts this time.
Dutch prime minister Mark Rutte has taken a hard line in Brussels on the conditions of coronavirus aid to Southern Europe, but at home his government has abandoned austerity without controversy.
During the last economic crisis, Rutte, who has led the liberal People’s Party for Freedom and Democracy since 2006, raised taxes and cut public spending to keep the Netherlands’ budget deficit under the EU’s 3-percent ceiling.
Now, when the economic contraction caused by COVID-19 is even more severe, he is borrowing €56 billion, or 7.2 percent of GDP. Debt as a share of economic output is projected to rise from 49 to 61 percent.
Statism is back in a country that is (or used to be) considered a champion of liberalization and free trade.