Dutch go out on limb in fractious negotiations on aid for fellow EU states

It may sound harsh, but right from the start of the fractious negotiations on aid for southern EU countries devastated by Covid-19, the Netherlands put itself on the wrong side of a debate that should have amounted to no more than one question: What can we do to help?

Two of prime minister Mark Rutte’s three coalition partners said so. The current and former governors of the central bank said so. The opposition said so. Political leaders in countries which between them had already suffered tens of thousands of shocking deaths said so in deeply unflattering terms.

What all made clear to Mr Rutte was that sharing the cost of combatting a global pandemic laying waste his EU neighbours was not the same thing as rewarding those countries for the apparent fiscal laxity that left them unable to cover the cost of its unprecedented economic damage.

And yet Mr Rutte and his finance minister, Wokpe Hoekstra – who've so far seen 2,396 of their fellow citizens succumb to the virus – refused to listen.

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Or if they were listening what they heard was certainly not a moral argument in favour of rapid support at scale but the same old economists’ warnings about “moral hazard”, the idea that such support is fundamentally undesirable because if you prop up a country with “inadequate fiscal buffers” one week, you’ll probably have to do it again the next.

That's an idea that Mr Hoekstra made the mistake of voicing last month, appearing surprised when Portuguese prime minister, Antonio Costa, described his comments as "repulsive" – forcing him to concede he'd perhaps been "lacking in empathy".

Mr Da Costa was not alone.

"The image that Italians have of the Netherlands has been drastically polluted in just a few days," former Italian prime minister, Enrico Lette, said in a no-holds-barred interview with a Dutch newspaper.

"And not just in Italy. Look at the reactions in Portugal and Spain as well. Nobody expected the wealthy Netherlands – a founder of the EU – to behave this way in a crisis of such magnitude."

Even so, right up to Wednesday morning the Dutch remained obstinate in their opposition to mutualised “corona bonds”, favouring instead a deal using the European Stability Mechanism, the euro zone’s permanent bailout fund, with strict conditions attached.

As hours, then days, passed without aid for those stricken, Labour leader, Lodewijk Asscher, declared in frustration: "One country is hampering efforts to tackle this crisis together: The Netherlands".

Extraordinary misstep

So what explains this extraordinary misstep by the usually adept Dutch PM?

Some believe it’s hubris given that Mr Rutte is now at the head of his third successive coalition, with recent polls showing overwhelming public support for his handling of the coronavirus lockdown.

Others believe he’s wedded to a mindset in which so overwhelming is public opposition to the sharing of debt between richer and less well-off EU countries that he sees no technical distinction between the eurozone debt crisis or the current EU budget impasse and a global pandemic.

There is, however, another scenario, according to Rem Korteweg of independent think-tank, the Clingendael Institute, author of a paper on European perceptions of Dutch foreign policy entitled, "Effective without Empathy".

Dutch politicians, he says, are concerned first and foremost with how they’re regarded by their peers, not internationally. In that context, he points out, the Netherlands has a general election scheduled for March 17th, 2021, less than a year away.

Positioning has already begun. Nobody wants to appear weak. From now on – pandemic or no pandemic – nobody will give an inch. In this scenario, Mark Rutte’s misstep has perhaps been no misstep at all, but a calculated “hard man” strategy.

Unfortunately, even with a  deal last night, that’s not how the outside world will see it – not this time.