20/08/2012 - Analysis
On 25th April last Mark Rutte, the Dutch Prime Minister (People's Party for Freedom and Democracy, VVD), handed in his government's resignation to Queen Beatrix – in addition to the latter this comprised the Christian Democratic Appeal (CDA) and the Reformed Political Party (SGP). In the Netherlands there have been frequent resignations and they have become even more frequent over the last few years: the last six governments have indeed resigned before the end of their term in office and the country has seen five different governments over the last ten years. In all, since 1945 only five coalitions have remained in office for their entire term.
The country's political landscape is increasingly unstable. The three "main" traditional parties – Christian Democratic Appeal, the People's Party for Freedom and Democracy and the Labour Party (PvdA) – which rallied 90% of the vote in the 1950's now attract less than half of the electorate. New political parties emerged in the 1960's which overturned the political playing field and led to a new distribution of the vote. In the 1990's the economic crisis, which severely affected the Welfare State, since it clouded the lines of division between the parties, further accentuated the instability of the Dutch vote. Although the two left/rightwing movements still rally an equal number of voters, the latter increasingly swap sides or move over to another party in the same camp. Finally the emergence of populist parties in the 2000's – or rather new politicians including the forerunner of these, Pim Fortuyn, murdered just days before the general elections on 15th May 2002 – have further weakened the loyalty of the Dutch electorate towards their political parties.
The first consequence of this fragmentation is that there is no longer any dominant party, either on the right or the left, which makes the formation of a sound, coherent government coalition difficult. Until the 1990's government comprised two parties. This figure has risen to three over the last twenty years. Now four and even five parties are required to guarantee a parliamentary majority.
After the general elections on 9th June 2010, it took Mark Rutte four months to negotiate the formation of a government coalition, the first to be led by a liberal since 1913 and the first minority government since the Second World War. In exchange for its support, the Freedom Party (PVV) led by populist Geert Wilders, achieved the adoption of several measures included in its programme, notably the ban on the full veil and the reduction of development aid.
In all 22 parties are running in the general elections on 12th September next, including 12 new ones, featuring 50 Plus, the Anti-Europe Party, the Pirate Party and the Democratic Political Turning Point, which formed after a merger between Proud of the Netherlands led by former Immigration and Integration Minister (2003-2006) Rita Verdonk and the Independent Citizens' party founded last April by Hero Brinkman, a former PVV MP.
The Political Crisis
On March 5th 2012 the government parties started negotiations over the reforms required to reduce the country's budgetary deficit (4.7% of the GDP in 2011, i.e. 28 billion €). According to the Central Planning Bureau (CPB), the government has to save around 16 billion € in 2013 in order to meet the standards set by the EU's Stability and Growth Pact. Amongst the measures planned for in the draft 2013 budget were a 2 point rise in the VAT, the freezing of civil servants' salaries, a reduction in the budget allocated to the healthcare sector and aid for developing countries.
On 21st April Geert Wilders walked out of the negotiations refusing to approve the "measures dictated by Brussels, which are damaging Dutch buying power too much.
" "From the start we said that we did not hold the 3% rule sacred,
" declared the populist leader. "My loyalty is primarily towards the Netherlands and not to Brussels. We are masters in our own home, in our country. This project is not in the interest of Freedom Party voters. We do not want to submit our retirement pensions to bloodletting caused by the Brussels diktat. I cannot accept that old people will pay for the absurd demands issued by Brussels
(according to Geert Wilders, the measures put forward would lead to a 3% loss in buying power on the part of the elderly). "We are not going to allow our elders to pay for the Greek cheats. A package of measures has to be presented that will bring order to public spending and which will reduce the stranglehold on the citizens,
" maintains Geert Wilders, who condemns the reforms which he qualifies as a hindrance to growth saying that they will lead to a rise in unemployment. In reality, since he is aware that an acceptance of the reforms on his part would certainly lead to a loss of votes, the PVV leader has preferred to destroy his alliance with the government parties rather than risk being chased from it.
"Geert Wilders' departure is clearly a bid to attract voters, it is a bet he is placing on the elderly so that they believe he is worried about their problems,
" stresses Rene Tissen, professor of economic policy at the University of Nyenrode. "It is the last chance for Geert Wilders to strike hard,
" maintains Alfred Pijpers, professor of Political Science at the University of Amsterdam. "He prefers to leave the government coalition rather than lose his credibility by supporting the painful cuts that have been demanded by Europe,
" stresses Costas Gemenis of the University of Twente.
The European Commissioner for Digital Strategy, Neelie Kroes (VVD) said she was "shocked by Geert Wilders' irresponsible behaviour
". "It is not a question of applying rules set by Brussels or of talking about the "Brussels diktat". The Dutch government has been very clear about its support to budgetary goals. The Netherlands are absolutely convinced, and quite rightly, that there has to be a plan for sustainable funding for all of Europe,
" she declared.
For months the tension between the PVV and the government parties has grown, to the point that many were relieved about the end of the experiment undertaken by this rightwing government that has received the support of the populists. The Populist Party has show that it is neither stable nor responsible in this time of crisis and its – vital – support to the government finally led to its collapse.
After the resignation of Mark Rutte's government, five political parties – the People's Party for Freedom and Democracy, the Christian Democratic Appeal, the Democrats 66, the Green Left (GL), the Christian Union (CU) – finally signed the agreement on 26th April which enabled agreement on the 2013 austerity budget. Amongst the measures feature an increase in VAT (from 6% to 7% and from 19% to 21%) (4 billion € in savings planned); the reduction of the healthcare budget (which represented 10% of the GDP in 2012), notably with an increase in the deductible from 200 to 400€ (leading to savings of 1 billion €) and the reduction in the reimbursement of medicines; greater flexibility in terms of dismissal (in exchange for the upkeep of the duration of unemployment benefits); an increase on the tax on tobacco, alcohol and fossil fuels; a review of the university grant system; the progressive rise in the legal retirement age as of 2013 (this is due to rise from 66 in 2020 to 67 in 2025); the freezing of civil servants' salaries and social services (for a two year period); the reduction in international cooperation spending and a twofold increase in new banking taxes. These reforms are due to cause a drop in buying power of Dutch households.
The agreement (3.6 billion € in savings and 8.3 billion in additional revenue in the shape of taxes and heavier contributions on the part of households) will make it possible to meet the requirements set by Brussels for one year and to achieve 12 billion € in savings.
The political forces
Like all European countries the Netherlands has to stabilise its public spending, and notably its budgetary deficit. However, along with Germany, Luxembourg and Finland – the country is one of the only EU Member States to enjoy an AAA rating with the ratings agencies. Its public debt is under control (65.52% of the GDP in 2011), GDP growth lay at 1.1% last year and unemployment, that totalled 5% one year ago, lay at 6.2% in April 2012. The Netherlands is in recession however and business investments and household consumption are down. Socio-economic issues and notably the choice of sectors in which spending has to be cut are therefore the heart of the electoral campaign.
In its programme the People's Party for Freedom and Democracy (VVD) plans for further savings, notably in the area of social protection (9 billion €), healthcare (7 billion), the civil service (8 billion) and development aid (3 billion). For example, the party wants to raise the healthcare deductible and apply it to GP consultations and also reduce the duration of unemployment benefit payments. It is also planning for investments in education, infrastructures, security and a reduction in charges (to a total of five billion €). The VVD is the only party that is planning to reduce the budgetary deficit over one term in office. Outgoing Prime Minister Mark Rutte will lead the VVD list on 12th September next.
Labour leader, Diederick Sansom, regrets that the government holds on to the 3% threshold set by the Stability and Growth Pact. The PvdA believes that the reduction in the budgetary deficit from 4.6% to 3% of the GDP in 2013 is bad for the population and also for the Dutch economy. Labour has set the goal of achieving a budgetary deficit of 1% in 2015, placing emphasis on measures that take on board inequalities in income and greater taxation on the highest salaries. They are against any budgetary cuts in the education sector. Diederick Sansom took over from Job Cohen (former mayor of Amsterdam) at the beginning of the year as head of the PvdA. On 20th February the latter announced his resignation saying "the PvdA's task is to offer people prospects, especially during this time of crisis. As a political leader you have to resign when you cannot achieve this effectively.
" This statement has not made his successor's task an easy one. Diederick Sansom has adopted a policy to draw closer to the Socialist Party (SP) that lies on the left of the left. "Look at Brabant, Nimegen and then many other towns, the Socialist Party has shown that it can lead,
" he declared. Both of these leftwing parties quite clearly differ however regarding international and European issues.
The Labour programme in the general elections, running under the slogan "a more social, stronger Netherlands
" focuses on growth and employment. It is planning for the cancellation of the increase in VAT, a 60% tax on revenues over 150,000€, the restructuring of the banking sector, the restriction of bonuses, the creation of a national investment bank for SMEs, a 30% deductibility on mortgage interest payments. "This crisis cannot be fought outside of the European framework,
" maintains Diederick Sansom.
The Green Left list (GL) will be led by Jolande Sap who, with 84.9% of the vote, won the most recent primary election that took place in the spring against Tofik Dibi. Amongst other things the ecologist programme proposes a 19% VAT rate on meat, the abolition of the deductibility of mortgage interest payments, payment into to the basic retirement pension on the part of those with the highest revenues and an income based assessment of health insurance payments. The Green Left also hopes for the introduction of a minimum 30% quota on the percentage of women employed in companies that are floated on the stock exchange, the exclusion of civil servants who refuse to marry same sex couples and finally the launch of a railway link between Almere and Utrecht-Breda. Of course the ecologist programme emphasises energy saving measures (estimated at 3% per year) and hopes that the country will have a 100% clean energy application in 2050. The Green Left has declared that it wants to govern with Labour and the Socialists.
The Democrat 66 programme is basically pro-European. "The crisis provides an opportunity to undertake reform after years of stagnation,
" says D66 literature. D66 defends "true European political union
". However D66, just like the Green Left, may pay on 12th September for its support of the spring agreement signed last April.
The Christian Democratic Appeal has been constantly losing ground in the ballot box over the last ten years. On 18th May Sybrand van Haersma Buma, the leader of the party's parliamentary group, was elected as its head by 51.4% of the vote. In his book "Together we shall do more
" he acknowledges that although the populist parties do not provide solutions the society's problems, they perceive perfectly the population's discontent. In response to the present difficulties the CDA is suggesting a reform of the banking system (increased responsibility on the part of the bankers) and the creation of a governing council for this profession.
The Populist Threat
The Netherlands is special and it is unusual in Europe, since it has two populist parties, one on the left and the other on the right, which are both gaining ground in the polls (notably the party on the left) just a few weeks before the general elections.
The Socialist Party (SP) has indeed become the country's leading political party over the last few months. This phenomenon can be explained by the popularity of its leader Emile Roemer, who was appointed leading politician of the year and the most popular personality in the country by the weekly Hp/De Tijd
. The Socialist breakthrough in the polls has been to the detriment of Geert Wilders' PVV. The two parties indeed share the same electorate, ie the most vulnerable socio-professional categories who feel excluded and who are against any reform to the Welfare State and the EU, which they blame for their problems. The SP also attracts many employees from the public sector and those working for the unions or associations and a share of the country's intellectual elite.
The socialist programme plans for a 65% taxation rate on people who have more than 150,000€ savings – an operation which the party believes will help it recover 3 million € - and the introduction of allocations and healthcare insurance according to individual revenues. The SP is demanding the freezing of civil servants' salaries who earn twice the average salary and the investment of 3 billion € in the maintenance of infrastructures to create jobs. It is promising to protect the buying power of the middle classes (around 30,000€). The SP may very well make a breakthrough in the general elections on 12th September but many wonder whether it will be able to govern. Emile Roemer said he is ready to form a coalition, and if necessary, he will do so with the Liberals.
At the beginning of August one of the SP's co-founders, Remi Poppe, warned the members of the SP: "If ever the Socialist Party achieves a result above that of Labour in the next general elections on 12th September the party cannot afford to be ousted once more by the Social Democrats,
" he stressed. In his opinion Labour is over confident about the market and its ability to settle problems. But he added, "We cannot continue to be against everything. If a party wants to govern it is important to adopt a positive attitude. We shall continue to be against liberalism and against those who believe unfailingly in the law of the market. But we have to be pragmatic.
The Freedom Party (PVV) is specific in that it lies on the far right regarding security issues but on the far left regarding the defence of the Welfare State and on social issues. Above all it is against the European Union, which it believes a threat to the Welfare State and beyond that to Dutch society and its identity. After motivating its electorate for a long time over the rejection of what it calls the Islamisation of the Netherlands, its leader, Geert Wilders, has changed his stance and has now made his opposition to the European Union his battle cry. By positioning himself as the spokesperson of the people against the political elites, he is attempting to take advantage of euro-scepticism and intends to turn these general elections into a true referendum on Europe. Its programme is clear: Hun Brussel ons Nederland (Their Brussels, our Netherlands)
A referendum on Europe?
The PVV is against the single currency, which in its opinion has affected the country's economic growth and the Dutch buying power, and it is fighting for the introduction of a new Florin (NLG). Geert Wilders, who signed an agreement at the end of 2010 with the government parties setting the maximum budgetary deficit at 2.8% of the GDP and who never opposed the measures which pushed for greater integration, rejects the European Budgetary Pact (called the Treaty on Stability, Coordination and Governance) signed on 2nd March 2012 in Brussels by the heads of State and government of the 25 EU Member States (all except the UK and the Czech Republic). The populist leader qualifies the text as anti-democratic, of it being "a 40 billion € blank cheque from the Hague to Brussels
" and says that it will oblige the Netherlands to transfer further sovereignty over to Brussels and that it goes against "the interests of the Dutch people.
" Geert Wilders would like to repeat the referendum campaign on the treaty establishing a Constitution for Europe in 2005 when his party defended the "no" vote to the European text. The euro, the European Stability Mechanism, bureaucrats who are not elected the diktats on the part of Brussels regarding the budgetary cuts and immigration – these are the issues that the PVV wants to see at the heart of the campaign. In Geert Wilders' opinion the Netherlands must "exit from Europe
". "We must free ourselves from the prison in which Brussels has placed us,
" he declared.
"More of Brussels is not the solution to emerge from the euro zone crisis,
" says Emile Roemer. Although the SP is not against the European Union, it is profoundly euro-sceptic. It rejects the austerity that is being forced on the populations believing that the European Union is forcing them to make major sacrifices whilst its shows clemency towards the banks. Emile Roemer is against European budgetary discipline which limits the budgetary deficit to 3% of the GDP and which, in his opinion, impedes recovery and increases unemployment. He hopes to achieve two more years to bring the deficit below the 3% demanded by the European Stability and Growth Pact (2015). The Socialist Leader is also against European integration which he believes too rapid. "I shall stand quite clearly against Herman van Rompuy
(the present President of the European Council) who wants to transfer more and more power over to the technocrats in Brussels, without any democratic control and which grants a major importance to the financial sector. This type of issue has to be presented for the people's approval. If the people say "yes" by referendum, I of course adopt this trend,
" he indicated. The SP is against a "ridiculous" austerity programme to bring the public deficit within the European limits of 3%, maintained Emile Roemer on 19th August last. "It is very important that we do not start to make savings in an absurd manner.
The socialists believe that the recovery of growth will only be possible if the financial markets are placed under State control. They support the introduction of protective measures and are demanding the democratic control of the European Central Bank (ECB), which apart from regulating inflation, should be called upon to stimulate the economy and create jobs. They are also fighting for Brussels' signature of further agreements over the conditions for economic recovery and social protection.
The Dutch Political System
The States General is a bicameral Parliament. The first chamber (Eerste Kamer der Staten Generaal), the Senate, comprises 75 members elected every four years by indirect suffrage by the members of the assemblies of the kingdom's 12 provincial States. The Second Chamber (Tweede kamer der Staten-Generaal), the Chamber of the States General comprises 150 MPs elected every four years within 19 constituencies from totally proportional lists, a system which fosters the existence and representation of a great number of political parties.
The seats are distributed nationally between the lists that have won at least 0.67% of the votes cast. The number of votes on each lists is divided by a national quota, which is achieved by dividing the number of valid votes won nationally by the number of seats available i.e. 150. The seats that have not been attributed after this first operation are then awarded according to the de Hondt system of the highest average.
Any party that wants to have candidates in the general elections must find a minimum of 30 declarations of support in each of the 19 constituencies i.e. a total of 570 signatures and if the party is not represented in the lower chamber of parliament it has to pay a deposit of 11,250 € which is reimbursed if the list achieves at least 75% of the national quota.
10 parties are represented in the present chamber of the States General:
- the People's Party for Freedom and Democracy (VVD), created in 1948, led by Mark Rutte. It has 31 seats;
- the Labour Party (PvdA), founded in 1946 and born of the union movement is the main opposition party led by Diederik Samsom with 30 seats;
- the Freedom Party (PVV), a far right movement created in 2002 by Geert Wilders has 24 seats;
- the Christian Democrat Appeal (CDA), centre right party born of the merger in 1980 of three parties: the People's Catholic Party (KVP), the Anti-Revolutionary Party (ARP) and the Historical Christian Party (CHU), led by Sybrand van Haersma Buma with 21 MPs;
- the Socialist Party (SP), an extreme leftwing party led by Emile Roemer, has 15 MPs;
- Democrats 66 (D66) which rallies the reforming centre-left liberals. Led by Alexander Pechtold, it has 3 MPs;
- the Green Left (GL), a leftwing ecologist party led by Jolande Sap - it has 10 MPs;
- the Christian Union (CU), a party born of the merger in January 2000 of the Reformed Political Federation (RPF) and the Reformed Political Alliance (GPV), led by Arie Slob has 5 seats;
- the Reformed Political Party (SGP) founded in 1918 is led by Kees van der Staaij and rallies an orthodox protestant electorate (strict Calvinists) with 2 MPs;
- the Animals Party (PvdD) founded in 2002, is led by Marianne Thieme and has 2 seats.
Just one month before the elections on 12th September next the Socialist Party is forecast to win by the latest polls. According to Synovate it is due to win 32 seats against 31 for the VVD led by outgoing Prime Minister Mark Rutte. The Maurice de Hond Institute credits the Socialists with 37 seats and 31 for the Liberals. Freedom Party is due to win 17 seats; Democrats 66, 16; the PvdA, 15 and the CDA, 14. According to the daily Telegraaf
, 60% of those who support the Socialist Party are against the party's participation in a government coalition with the VVD and half of those close to the liberals would be against their party governing with the socialists.
Hence there is little chance that the elections on 12th September next will lead to the constitution of a sound parliamentary majority. "Any new government coalition will encounter the same problems as the outgoing government,
" says Kees Arts, professor of political science at the University of Twente.