Opinion: The hypocrites from The Hague

European Union
Dutch Prime Minister Mark Rutte

No question, the Dutch are my favourite among the European neighbours.

But ever since the poison of right-wing extremist nationalism started penetrating deeper and deeper into Dutch politics, this beautiful image has increasingly disappeared behind ugly patches of ignorance and narrow-mindedness. And this is happening to the detriment of all of Europe.

Prime Minister Mark Rutte demonstrated this during the negotiations on the EU budget and the Coronavirus relief package. There, he rallied as the leader of the “frugal” camp which opposed the supposed threat of wasting taxpayers’ money on economically weaker EU states. With this dictum, Rutte and his allies pushed through extensive cuts and turned more than €100 billion of planned grants into mere loans. This will not help the particularly hard-hit Italians and Spaniards because their state coffers are already heavily in debt.

European Union
The ‘frugal group’ meeting at the European Council meeting in July

This alone is bad enough, because compared with the original plan, the new measures cut precisely those elements that were intended to pave the way for the EU to achieve a climate-neutral and united future based on solidarity. All hope is now with the European Parliament to press the governments to reverse the terrible mistakes made thanks to the blackmail strategy of the Dutch and their allies. But whatever the final result will be, what is not tolerable is the know-it-all attitude with which Rutte “protects Dutch interests” (as he puts it). The prime minister and his finance minister, Wopke Hoekstra are taking on the role of professors who teach other governments about the reforms needed to restructure their economies and public finances.

But if there are any governing politicians anywhere in Europe who have no right to this position, it is Rutte and his colleagues in The Hague. For it is they who, with full intention, have been systematically inflicting triple-digit billions of euros worth of damage on other EU states for many years. They maintain a tax system that enables international groups to use Dutch letterbox companies to shift profits to tax havens such as the Bermuda and Cayman Islands, thereby reducing their taxation to below five percent. This gives the Netherlands more revenue at the expense of all other countries.

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President of the EC, Charles Michel (left) meeting with Prime Minister Rutte in July

Year after year, more than 90 billion dollars in corporate profits are channelled through Dutch accounts, according to data recently published by the OECD. Thanks to this, US corporations alone hide more than 40 billion euros of profit annually from taxation in Europe. Experts from the Tax Justice Network calculated that just these American companies deprive the EU’s public coffers of at least 10 billion euros each year. Every additional euro that The Hague gains from this e costs the other EU states four times as much. For Italy alone, this amounts to 1.5 billion euros a year.

At the same time, of course, European companies also take advantage of this system. In Italy, the companies Fiat-Chrysler, Luxottica, Campari, Ferrero, Barilla and Segafredo are among those who benefit from this system according to the newspaper “Il Fatto Quotidiano”. The resulting damage probably amounts much more than 1.5 billion euros. Against this background, it would be up to the government in Rome to demand billions in compensation payments from the Netherlands and press for overdue reforms instead of vice versa the Dutch imposing their views on budget policy on Italy.

In any case, the arrogant criticism of the alleged Italian sloppiness misses the point in reality. In 20 of the past 24 years, Italy’s treasury has achieved a higher primary surplus of revenues over expenditures than the Netherlands. Only the interest on the debt burden from the pre-Euro era is eroding that.

At the same time, the Dutch are actually Europe’s debt champions. If you add the loans from private households and companies, the aggregate debt of their economy is higher than in all other Euro countries and 20 percent higher than that of the thrifty Italians. That makes the Dutch economy highly vulnerable. When the next foreseeable shock resulting from climate change shakes the economy, the country behind the dike is likely to be hit particularly hard. But what will happen if the Dutch then need European solidarity?