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Dutch report Dutch report
by Euro Reporter
2012-08-11 10:43:02
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The Netherlands faces the politics of austerity

The Dutch have long been one of the eurozone's and the EU's most reliable members. Since the introduction of the euro in 2000, the country has easily met EU economic targets for the maximum allowable budget deficit (3 percent of GDP) and national debt (60 percent of GDP), generally turning in better numbers than even Germany. That policy position has been supported by broad consensus among political parties and the general population. But in a timely reminder that the politics of austerity are tough, even for fiscally conservative countries, the Dutch political system is now wracked by some of the same tensions that are roiling politics in the EU's peripheral members. The Netherlands faces important general elections in early September as a consequence of failed budgetary talks. The Socialist Party is polling well with a populist policy platform that resists ongoing fiscal austerity, with possible implications for broader management of the EU's ongoing crisis.

In the early days of the eurozone's predicament, the Dutch were in the forefront of the drive for austerity. In September 2011, the minority coalition government led by Prime Minister Mark Rutte slashed €18 billion from the budget. And when the economy slid into recession in spring 2012, the government was forced to cut another €12.4 billion in spending. But Rutte's coalition made up of the People's Party for Freedom and Democracy (VVD) and the Christian Democratic Appeal (CDA) with parliamentary support from far right Party of Freedom (PVV) collapsed at the end of April when Geert Wilders, the PVV's leader, withdrew its support. He claimed that the budget cuts would hurt growth, purchasing power, and the elderly, a populist tactic designed to attract voters fed up with further austerity. A broad coalition of five parties (including the VVD and the CDA) passed the budget shortly after Wilder's defection, but the minority coalition's collapse echoed the messy politics of austerity that are playing out across the EU's peripheral countries and which provide an opportunity for parties at the extremes of the political spectrum to gain ground. 

The next challenge comes with the 12 September elections. So far it looks as though the politics of austerity are favoring the leftist Socialist Party, which is leading in the polls after winning support from Labour Party (PvdA) voters disenchanted with their party's backing of the pro-austerity Rutte government on European issues. The Socialists are running on a platform that rejects the EU-imposed austerity measures and any further transfer of sovereignty. The party argues for policies that favour growth and social agendas. At the other end of the political spectrum, the PVV continues to maintain solid support with its anti-European platform that includes a euro exit. Together these two fringe parties currently have support from about one-third of voters. Both parties (but especially the PVV) have populist tendencies and aim to capitalize on Dutch voters' disenchantment with austerity and any discomfort with financial support for peripheral countries that provides few obvious domestic benefits.  

The next Dutch government will continue to be pro-European and support sound public finances, but voter concerns will make it more difficult for it to justify continuing hardship for the sake of the EU. This outcome is likely because the Dutch political system features a number of small centrist parties that will always be needed to build a ruling coalition. That dynamic will likely ameliorate any dramatic shift in policy. As a result, public finances will return to health, but perhaps not on Germany's and the European Commission's preferred time line and Berlin may lose the support of what has been a close ally in the drive for austerity. Nonetheless, strong supranational supervision will remain a precondition for further financial or monetary policy integration, in part to ensure that Germany and France do not break their own rules. But the next Dutch government will find it difficult to secure domestic support for any further transfer of sovereignty to the EU. The Socialists' increasing popularity will also encourage a debate on the social consequences of the eurozone crisis and the European project in general.


Pepper market expected to recover

Despite low production at the moment, the price formation for Dutch peppers is not doing well at the moment. Sales manager Hans Derks from FresQ FrEsteem says that all prices are below a Euro with the exception of orange and green peppers. "The reason that orange holds its price is, for the most part, due to a dip in supply. As it happens, there have been talks about a good supply from the US. There are also fewer green peppers readily available. These are ultimately necessary for mixes. This is why the price has stayed somewhat stable."

Hans doesn't expect any large peaks in supply. "The supply has been dropping all year and the total amount is a good amount of kilos behind last year. The unstable weather had been causing the shift in production. This factor has also not been good for the price formation. The European demand is stable at the moment. There is very little movement. The Russian market is currently failing, especially in comparison to the usual demand during the holiday period. The demand from the US is pretty good, although it continues to take longer to pick up."
The sales manager thinks that the price formation will recover. "The supermarkets don't have many special offers in the planning in connection to the holiday period. I think that market will improve after the holiday period with a better price formation as a result."


Dutch immigration minister under fire

Dutch parliamentary elections are just over a month away and the political hot topic of immigration is firmly back on the agenda in the Netherlands.  Gerd Leers, the minister responsible for immigration and asylum is under fire for fiddling with deportation figures and the Council of Europe is criticising the Dutch treatment of illegal immigrants.  Leers talked tough when he took office as Minister of Immigration under the previous minority cabinet. All asylum-seekers whose requests were rejected would be deported as quickly as possible. But it appears now that the minister may have fiddled with the statistics.  An investigation by Dutch current affairs programme Nieuwsuur claims that most of those described as being deported are not refugees. The official number of “forcible deportations” also includes people stopped at the border such as those carrying drugs or without a visa.  “The largest number of so-called deportations,” said migration specialist Han Entzinger, “is in fact of people who have never actually entered the Netherlands.”

Leers did not take part in the programme but said via a spokesperson that the department’s figures were always collated in this fashion. However, politicians from a number of opposition parties said they were not aware of this and were critical of the minister.  “Leers is massaging the numbers to create the impression he’s deporting as many people as possible,” said Labour Party MP Martijn van Dam. The minister is also under fire from other quarters. The Council of Europe, the continent’s advisory body for human rights, has just issued a report highly critical of the treatment of unsuccessful asylum-seekers in the Netherlands.  The Council says the conditions in detention centres are sometimes in conflict with international agreements such as the European Treaty for the Prevention of Torture and Inhuman or Degrading Treatment. This comes hard on the heels of a report by the Dutch Ombudsman describing conditions in detention centres for illegal aliens as “inhumane”.

Around 6,000 people are currently in Dutch detention centres awaiting deportation. This total includes a large proportion of refugees whose asylum requests have been rejected. It is not always possible for these people to return to their countries of origin so they can sometimes be kept in detention for a maximum period of 18 months. It is also not uncommon for those who have been released from detention to be re-arrested and detained once more. The Council of Europe describes these practices as unlawful, saying illegal aliens may only be forcibly detained if there is a realistic prospect of deportation.  The Council is also critical of the treatment of detainees, saying it is worse than that of convicted criminals and of the Dutch practice of detaining families with children. 

The criticisms echo those of Ombudsman Alex Brenninkmeier who said earlier this week that change was urgently needed in detention centres.  He said detainees should have more freedom of movement, better access to medical care and the opportunity to work or study. Leers again reacted via a spokesperson, saying detention has always been a last resort and it was up to aliens themselves to avoid it. He said that those willing to co-operate when it comes to their departure will not be forcibly detained. The criticism from the Council of Europe is particularly unwelcome for the Netherlands which aims to set an example for other countries when it comes to human rights. Dutch governments regularly condemn human rights abuses in countries such as Russia and Turkey which are also members of the Council.

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