BRUSSELS / AMSTERDAM (Reuters) – As the European Union this week drew up an emergency economic package for countries shocked by the COVID-19 pandemic, the Dutch have stuck to their reputation as a steward by refusing to support the call of members of the South to assume collective debt.
And while the bloc’s 27 finance ministers on Thursday agreed to half a trillion euros in relief, the controversial issue of “eurobonds” – a jointly issued debt – has not been resolved. A reference to “innovative financial instruments” allowed both parties to claim to have obtained political concessions.
The European powerhouse, Germany, Austria, Finland and others, had also expressed objections to the debt pooling, but Dutch Finance Minister Wopke Hoekstra was ultimately the only one to resist the 16 hours of talks that failed to reach an agreement on Wednesday.
When EU finance ministers returned to discuss a video conference on Thursday evening, The Hague agreed to ease the conditions for access to funding from the eurozone EMS bailout fund to help cover the costs. health care costs, but held firm against shared debt.
Smiling Hoekstra said he was “very happy” with the outcome of the euro bonds, tweeting that “there wouldn’t be any” and telling Dutch TV channels “sometimes you have to give up”.
French Finance Minister Bruno Le Maire retorted that the deal paved the way for mutual debt.
The Dutch minister’s position came as no surprise, however.
Days earlier, a prominent satirist sided with Hoekstra in explaining why the Dutch should not pay money to Italy.
With a record two million viewers of his show “Lubach on Sunday”, Arjen Lubach said the Dutch wanted to help, but had legitimate concerns about the bloc’s long-term finances and the preservation of their own hard-fought financial health. . He likened the situation to putting out the fire in a neighbor’s house.
“I’m ready to help you put out the fire, but I don’t want to take over your mortgage,” Lubach said, adding that while Hoekstra could be irritating, he was “right”.
The Netherlands, a wealthy nation of 17.2 million people, has only recently emerged from years of belt tightening as part of an austerity program since the 2008 financial crisis that significantly affected cuts social security, pensions, education and health care.
While the Dutch have reduced their national debt to 50% of GDP, that of Italy has risen to nearly 135%, or 2.4 trillion euros, said Lubach.
The Hague had drawn a red line with the countries of southern Europe on the common debt and the conditions of access to emergency credit lines of the European Stability Mechanism (ESM), angering Spain and hard-hit Italy.
The Dutch economy is deeply rooted in the culture and history of the trading nation which adopted the Calvinist branch of Protestantism over four centuries ago.
In the 17th century, the English coined the phrase “Going Dutch”, which refers to splitting up a bill so that one party does not end up in debt to the other.
The country’s neighbors always like to laugh at the Dutch sharing of dinner bills, shop for groceries on vacation and always looking for a bargain.
The fact that the issue is a hot topic for television is a big part of how the Netherlands has become the “bad cop” of the bloc opposing the kind of financial burden sharing its neighbors to the south deem necessary to avoid. an economic collapse.
While the firm stance of the government of Dutch Prime Minister Mark Rutte has the backing of Parliament in his country, in Rome, Eurosceptic challenger Matteo Salvini has denounced the bloc as not showing enough solidarity.
“The European debate is embarrassing if not sickening,” said Governor Luca Zaia, a member of Salvini’s Northern League in the Veneto region, one of the hardest hit in Italy.
Joris Luyendijk, Dutch author and political commentator, said Hoekstra’s harsh tactics could cause long-term damage to Dutch diplomatic relations within the union.
“It’s horrible PR and horrible politics; in a time of unprecedented crisis, Wopke offers southern Europeans an ideal figure of hatred. We will pay for it right down the line as a country. “
Reporting by Gabriela Baczynska and Anthony Deutsch; Additional reporting by Michel Rose in Paris, Toby Sterling in Amsterdam, Francesco Guarascio in Brussels and Riccardo Bastianello in Rome; Editing by Frances Kerry