Nils van der Vegte – The Political Crisis in the Netherlands: The Rise of the Reds?

Da Russophile readers will probably know of Nils van der Vegte. He is a Dutch scholar currently based in Arkhangelsk who runs the site Russia Watchers (with Joera Mulders), with whom I did a co-translation of an article on emigration to Belarus. He also has some strong opinions about politics in his native Netherlands. This article is about the possible political ramifications from the recent collapse of the Dutch government.

On Saturday the 21st of April the Dutch minority government fell after the populist Party of Freedom, under the leadership of Geert Wilders dropped out of the negotiations stating that the new proposed budget cuts would hit its electorate too hard. The question is, what now? New elections will be held in September or October 2012 but what will happen in the meantime? And what will “Brussels” and the financial markets say about the fall of the Dutch government? Some of my international friends asked me about the situation and as I have no blog to explain this, I am most grateful to Anatoly Karlin to provide me with an opportunity to do this.

The political system: A short history

Before I start with a short history of Dutch Politics, it is important to say something about our political system. This is not going to be a very detailed history of more than a hundred pages but to understand the problems of The Netherlands one needs to have some basic knowledge about how things work. The political system is sometimes defined as a consociational state: a mix of parliamentary representative democracy and a constitutional monarchy. My country does not have a president, it has a king or queen (during the last century we only had queens). The king does not have any real powers, his power sharply decreased following the introduction of Ministerial Responsibility in 1848, together with a new constitution. The Prime Minister is the most powerful figure in the government as, for example, in Britain. To form a government in The Netherlands, one needs 75+1 seat in the House of Representatives[1], which consists of 150 seats in total.

However, because of the nature of the political system (proportional representation) it is almost impossible for one party to get the required 76 seats. A government in The Netherlands has therefore always consisted of several parties, united in a coalition. The creation of such a coalition takes place with help of the queen and king. I know, I just said that the king does not have any influence and that is still completely right as it is not in the constitution: it is tradition. After the elections, all the leaders of political parties who got elected to the House of Representatives, go to the queen and tell her what their preferences are (with whom they would like to form a coalition). After this, the queen usually names an Informateur, who is usually the leader of the largest political party in the House of Representatives. His job is to search for political parties who are willing to form a coalition with him. After this, he returns to the queen to report. If he is confident that he can form a coalition, the queen will then make him a Formateur and coalition negotiations can begin.

Over the course of the course of Dutch post-1945 history, the political arena has changed dramatically. Fifty years ago, the Dutch society was divided in different pillars (social groups) (zuilen in Dutch). In reality this meant that every pillar had its own institutions: its own schools but also its own shops. For example, my grandmother was Protestant and so she always went to the Protestant grocery shop, even though the Catholic one was far closer. Within such a pillar, there was a lot of social control both informal and formal. For example, it was not done to marry someone from another social group and the elite of these pillars made sure that this would not happen. Thus, the political parties were also based on this pillar structure: Protestants, Catholics, Socialist and Liberals. However, because of the nature of the Dutch political system, the political elite of these pillars was forced to work with each other in political coalitions, they did not like it but there was no other choice.

This system faced its first big change during the sixties. Because of the extensive economic growth, The Netherlands had developed itself into a welfare state, this meant that the government provided its people with social benefits and the church or other social organisations were no longer necessary. In addition, the development of the mass media opened up society: Protestants could now see how Catholics lived and vice-versa. This also led to the creation of new political parties like the CDA, a union of the Catholics and Protestants. Another creation was D66, a party founded by disappointed members of the liberals and socialists. Still, the new CDA would continue to play the most important role in the Dutch political arena until 1994, when, for the first time in the 20th century, the first coalition was formed in the Netherlands without the Christen Democrats. The process of de-pilarisation would continue over the second part of the 20th century which eventually led to a political revolution in 2001.

The rise of populism: Fortuyn favours the brave

On the 20th of August 2001, Pim Fortuyn, a professor of Social Sciences, announced that he would enter the Dutch political arena. Many people at that time did not take him seriously but within a few years he would become a phenomenon who would tremble the foundations of the Dutch political system. He espoused that the Islam was a “backward culture” and that the Dutch government had too big of a role in education and healthcare. He was also in favour of heavier punishments for criminals. But what really made him popular were his opinions about the Dutch multicultural society, in The Netherlands, he said, multiculturalism has failed and also emphasized the danger of the Islam to Dutch society. He thought that Muslims in The Netherlands were not integrated very well or not at all sometimes and accused the government coalition (consisting of the social-democrats and liberals) of having neglected these issues for years. Many Dutch people agreed with him.

As a result of the elections held in May 2002, his party, the Party of Pim Fortuyn, managed to from 0 seats to 26 seats, a huge victory. Pim Fortuyn never lived to see that result: he was shot by a left extremist nine days before the elections. Without the leadership of Fortuyn, the party (LPF) succumbed to internal struggles and splits (and caused the first government with Christen Democrats to collapse). In the years after this, the party eventually disappeared from the Dutch political arena. Still, Fortuynism is credited with opening up Dutch politics and making certain issues (which could not be discussed because of political correctness) discussable once more. Also, his legacy lead to the establishment of a party that took over many of Fortuyn’s points and would once again storm the Dutch political arena: the party of freedom.

The blond and bold leader

In 2004, Geert Wilders was kicked out of the Conservative party because of the fact he refused to vote “yes” on the issue of Turkish membership of the EU. He also published an article which was an attempt to make the Conservatives move even more to the right. After he got thrown out, Wilders eventually created his own party: the party of Freedom. His party proved to be quite popular, espousing the superiority of the Christian-Jewish culture and anti-Islam remarks. His popularity grew even more when a prominent Dutch opinion maker (Theo van Gogh) was murdered by a radical Muslim with Wilders himself being threatened as well. In the period 2004-2010, Wilder created his own party and continued to feature prominently in the Dutch news (for example, he produced a movie called Fitna about the Islam, he was put on trial for his remarks on Muslims and he was refused entry into the UK in 2009). Especially his trial let to an increase of his popularity as it provided Wilders with some free PR. Wilders claimed that it was a show trial against him and frequently pointed to the leftist elite (leftist church) who had conspired against him.

Eventually, after the 2010 elections, Wilders could no longer be ignored and talks started about a coalition government. With the political landscape in The Netherlands very dispersed, forming a coalition would be extremely hard (with 9 parties competing over 150 seats). If one looks at the number of parties competing for the left-wing electorate there are: Social Democrats (Labor), the Greens, the Socialists (former Maoists) and D66 (Social Liberals).The right side of our political spectrum suffers from the same problems. It soon became clear that Wilders was not willing to take part in the government. After all, that had transformed him and his party into a standard political party in The Netherlands and that meant part of the system Wilders was agitating against. In addition, the Christen Democrats and Conservatives who formed the government that Wilders would not spoil the Dutch image abroad (the government could safely say that Wilders was not in the government, so the ideas/statements of Wilders were not the opinion of the Dutch government). The three parties agreed to sign an agreement of what policy they would conduct the next four years. For everything else, the Dutch government would have to “shop” at the opposition. From the beginning, the coalition faced many problems. The party of Wilders, culturally right but social-economically speaking extremely left-wing conservative, was against any reforms (like increasing the pension age and put an end to the tax rebates on mortgage interests). Moreover, Wilders, not having responsibility, permitted himself to continue his anti-Islam claims which often damaged the image of The Netherlands both in and outsideEurope. Wilders now also increasingly voiced anti-Europe statements with accusingBrusselsof being a gravy train.

When the financial crisis morphed into a debt crisis, the Euro zone quickly became engulfed in crisis. The coalition found it hard to get enough support in the Dutch House of Representatives with a Party of Freedom, consisting of European Union haters and allergic to any reform (or hints of more Supranationality in Europe). Now, when countries of the European Union agreed to start using the Euro, they also signed the stability pact. This pact means that to preserve the stability of the Euro, not one country could have a budget deficit of more than 3%. During the Greek debt crisis it was The Netherlands which put this demand back on the table again: Greece(and other countries) should try their utmost best to bring the budget deficit back to 3%. If the Greek people need to suffer for this, so be it. For The Netherlands, this was a very important thing: and it loudly trumpeted this opinion in Europe. So, when a Dutch Governmental Institution published its predictions, stating that the budget deficit in The Netherlands would be more than 3% (4.7%), the coalition+Wilders had to get together to discuss budget cuts (as Wilders had committed himself to discussing cuts if the need would arise to do so). However, after seven weeks of discussing, Wilders walked out on Friday the 21st of April because he “could not tolerate the elderly to bear the dictate ofBrussels”. It turned out that the purchasing power of pensioners would decrease by 2% and Wilders stated that his electorate could not live with this. Wilder cleverly blamedEurope for the need of budget cuts “it isEurope that wants to take money from our pensioners” he said. But it was The Netherlands itself that declared the 3% to be holy and not Brussels (Also, Germany and France had much larger budget deficits in some years before the financial crisis).

The Dutch government talked big in Europe about Greece, Spain, Italy and Portugal. This should come as no surprise: Dutch people are renowned in Europe for their bluntness and their big talk. The irony is that now that The Netherlands cannot manage to bring down its deficit, chances are indeed very slim that the European Union will show any leniency towards the Dutch budget problems. After all, it was Holland[2] that demanded stricter budget control by Brussels (and give the European Commission more power to do so). Fines for not having a proper budget policy were also increased. In theory, we could end up getting a fine of one billion now. There is only one way to get around this: work together with the same Greek, Italian, Spanish and Portuguese governments so reviled by us. What an irony that is: a long overdue lesson in humility for the country of big talk.

The future: the Reds are at the walls

So, now that there is no viable coalition anymore, what will happen? First of all, everybody seems to agree that elections will take place in either September or October. However, before that time, there are two problems to solve. The first one is that Brussels would like to receive our plans to bring back our deficit to 3% in two weeks; my country will never be able to do that. Also, on the third Tuesday of September the Dutch government must present its plans for the coming year (this is not tradition, it is written in the constitution). So it looks like that the Conservatives and Social Democrats have to come up with some kind of agreement with the opposition before this. But it will not be easy to negotiate with the leftist opposition and thus, there is a large political crisis in The Netherlands which will probably cause the recovery of the economy to slow (uncertainty about future policies). It could also well mean that my country is going to lose its so-called Triple A status, which means that the Dutch government will have to pay more interest which in turn might even more budget cuts necessary. Financial stability and prudence is critical to economic growth: Every additional percentage of interest will cost our government an additional 4 billion Euros per year, whilst the costs for companies to borrow will increase by 7 to 14 billion Euros a year.

Populists always win in these times. Politicians who promise their electorate stability and even an improvement of their life are always popular during crises. It now seems that some of the electorate is considering voting for the Socialists (former Maoists) instead of for the Party of Freedom. This might seem strange but on social-economic policy, the Socialists and the Party of Freedom are not so different: no changes. The SP promises stability in a time of great problems but what they actually do is going after people who are successful in life. Before I mention some points they make, let me say that in my country more than 50% of our income is redistributed (money from the richer part to the poor part) so we are NOT like America, which is a good thing, also, the richest 10% pays for 90% of all the taxes. First of all the Socialist Party wants to increase the (highest) tax tariff in The Netherlands from 52% to 55% which means that everybody who earns more than 56.000 euro per year pays 55 eurocents of every euro he or she earns to the government. Also, the Socialist Party wants a new tax reform which means a new tariff of 65% for everybody who earns more than 165.000 euro per year. This means that my country will become the country with the highest tax tariff in the world. There is more. Entrepreneurs whose profit is more than 200.000 will have to pay 30% tax over this (an increase of 5%). All of this will help the “poor and the helpless” who almost have to pay nothing (they also get a higher minimum wage and an extra tax discount). This all seems nice but in the end it means that working hard simply does not pay off. Why would you work hard and earn (a lot) of money? The government will come and take almost all of it away anyways. In addition, labour will become much more expensive and an independent agency recently calculated that if these plans will be carried out, employment will actually DECREASE instead of increase (this only happens with the plans of the Social Party, the plans of all other Dutch political parties will actually lead to an increase in employment). Couple this with their fear of Europe and everything foreign (although they are certainly not as anti-Islam and Wilders) and I am certainly afraid of what could happen.

So the kind of parties like the Socialist Party (SP) and Party of Freedom will definitely win from the crisis. The question is of course whether the other parties would like to form a coalition with them. The most probable answer is “no”, the SP is far too left and nobody will take the risk of forming a coalition with Wilders anymore. So we will probably see a coalition of the Labour Party, the Conservatives and D66. At the same time, we will see far more political instability in The Netherlands than we used to see in the 20th century. After all, with the secularisation and such political parties will not longer enjoy a stabile electorate and political parties will pay closer attention to what the electorate thinks (the polls). It is already visible in the House of Representatives: The traditional “middle” parties are on the decline – the CDA, the union of Catholics and Protestants now (virtually) has 11 seats in the House of Representatives. In comparison, that party used to have around 50 seats. I would also like to point to the history of Dutch governments since the short period of Fortuynism: Since 2000 we have had six governments in total (each of which had a mandate of four years) but since Fortuyn not one government has managed to complete this mandate. As a result, for a grand total of 2 years, The Netherlands has not been governed at all, as we had a demissionary government[3]. Little Italy anybody??

It is too soon to say what will happen in my country. But as the Russians put it: мы будем харкать кровью – we will give up blood for years to come. As for me, well I will probably seek asylum in Russia somewhere.


[1] There is also a Senate but the electoral process is so complicated that even I do not understand it completely. It is also of less relevance than the House of Representatives. Still, during negotiations, the prospective coalition should definitely take the Senate seriously: they need a majority there to adopt new laws and change the constitution.

[2] True, the Germans were very much in favour as well but they were more than happy to let The Netherlands do the talking out of fear of “the war”.

[3] In Holland a government is called Kabinet (Cabinet) but for the sake of readability I decided to use government

Comments

  1. Mark Sleboda says:

    In which Nils takes the side of centrist neoliberals and EU over the far right and far left which both have a common anti-globalization, anti neoliberalism, anti-EU, pro-national sovereignty, anti- ‘poltiical-business amalgamation as usual’ platform. (A mirror image of the elections in France which had almost 50% of the electorate choose this left economics on the far left and far right).
    All of this makes his proposed asylum claim for Russia a little hard to understand.

    In any event – hurrah for the far left and far right across Europe. Down with the neoliberal, Europhile centrists! Politics is not dead, and history is not yet ended…

  2. Dear Mark,

    Though an unreconstructed member of the old Socialist Left I have more sympathy with Nils’s position. At the end of the day it seems to me that what he is ultimately complaining about is a slide into ungovernability since even if one agrees with the proposed higher tax rates what Nils is saying is that there is no chance that they will be adopted and that there is no possibility of the establishment parties forging a coalition with the two smaller parties that support these policies. This is exactly what has happened in Greece where the forthcoming elections threaten to make the situation even worse and may be what is going to happen in Portugal, Italy and Spain as well.

    In making these points I should make it clear that I agree with you that neo liberal economic policies (which are not by the way the same as wanting lower taxes) are ultimately to blame for this debacle and that much of the trouble has been caused by the way the EU was captured by the advocates of these policies.

    • On the subject of history, it most certainly has not ended. On the contrary we live, as the Chinese would say, in most interesting times. I for one firmly believe that not too long from now neo liberal economics will be universally recognised as the zany New Age cult it is and that the people of the future will struggle to understand how the likes of Ayn Rand, her disciple Alan Greenspan, Friedrich Hayek, the Chicago School, the “rational expectationists” and the rest of the motley crew were ever taken seriously.

      PS: I exclude Milton Friedman from my gallery of charlatans. Though some of his ideas were pretty bizarre he did make a real contribution to economics and to an understanding of money. Incidentally as has recently become known he had a pretty dim view of Hayek.

      PPS: As for “globalisation” that is simply shorthand for a system where everybody lends money to the United States.

  3. Thanks Alexander, you got the point.

  4. Enjoyed reading this. Small correction on the taxation: when a person is in the 52% bracket, (s)he doesn’t pay 52% over the entire income, but only over the amount of income that falls into that bracket. The income is divided into the different brackets and you pay the corresponding tax tariff over the part. However, for the social charges (that we pay besides income tax) they don’t use this system. It’s very complicated, but then we do like doing things the difficult way, it seems.
    Also, I personally do not consider the SP left-wing and I’m not alone in this. Yes, they call themselves “socialists” and are thus still described in the media as left, but once upon a time, left-wing meant progressive and the SP is anything but. They are “left” in the same way the Russian Communists are, I think. The SP and the PVV (Wilder’s party) actually appeal to the same demographic groups and have more ideas in common than one might expect. Not surprisingly, Emile Roemers (leader of the SP) has already stated that he’d work w/ Wilders if the election results would necessitate this. The other parties for now are praying that rumours that Wilders is fed up and wants to follow Ayaan Hirsi Ali to the USA will come true. ;D
    What sort of government we’ll get is anyone’s guess, the Dutch electorate is so whimsical right now, that much may depend on how they enjoyed their holidays this year … (elections probably September 12th).
    That we have a very serious problem getting the budget in order is clear. Those of us who are sick of the (left- and right-wing) neo-liberal babble on the “economic crises” don’t mind the European egg on their faces. A little humility wouldn’t go amiss in this country of ours.

  5. Dat klopt helemaal!

    Indeed, our tax system IS complicated but the idea behind this post was to explain to foreigners what the problems are in our country. That is also the idea behind a blog: it should be easy to read and interesting.

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