As the European Union hammered out an emergency economic package this week for countries reeling from the COVID-19 pandemic, the Dutch held true to their reputation for thriftiness by refusing to support a plea by southern members to take on collective debt.
And while the bloc’s 27 finance ministers agreed to half-a-trillion euros in relief on Thursday, the contentious issue of “eurobonds” – jointly issued debt – was left unresolved. A reference to “innovative financial instruments” enabled both sides to declare having won political concessions.
EU powerhouse Germany, Austria, Finland and others had also expressed objections to debt mutualisation, but Dutch Finance Minister Wopke Hoekstra was ultimately the sole holdout in 16 hours of talks that failed to work out a deal on Wednesday.
When the EU finance ministers returned to talk in a Thursday evening video conference, The Hague agreed to ease terms for accessing financing from the euro zone’s EMS bailout fund to help with healthcare costs, but held firm against shared debt.
A smiling Hoekstra said he was “very satisfied” with the outcome on euro bonds, tweeting that “there won’t be any” and telling Dutch TV stations “sometimes you have to put your foot down.”
French Finance Minister Bruno Le Maire countered that the agreement had paved the way for mutual debt.
The Dutch minister’s stance was no surprise, however.
Only days earlier a top TV satirist took Hoekstra’s side in explaining why the Dutch should not pour money into Italy.
With a record two million viewers of his “Lubach on Sunday” show, Arjen Lubach said the Dutch wanted to help, but have legitimate concerns about the bloc’s long-term finances and preserving their own hard-fought financial health. He compared the situation to putting out a neighbour’s house fire.
“I am willing to help you put out the fire, but I don’t want to take over your mortgage,” Lubach said, adding that while Hoekstra might be irritating, he had a “fair point”.
The Netherlands, a wealthy nation of 17.2 million, emerged only recently from years of belt-tightening under an austerity program since the 2008 financial crisis that made deep cuts into social security, pensions, education and healthcare.
While the Dutch cut back their national debt to 50% of GDP, Italy’s rose to nearly 135%, or 2.4 trillion euros, Lubach pointed out.
The Hague had drawn a red line with southern European nations over joint debt and conditions for access to the emergency European Stability Mechanism (ESM) credit lines, drawing anger from hard-hit Spain and Italy.
Dutch thriftiness is deeply rooted in the culture and history of the trading nation that adopted the Calvinist branch of Protestantism more than four centuries ago.
In the 17th century, the English coined the phrase “Going Dutch”, which refers to the splitting of a bill so that one party does not end up indebted to the other.
The country’s neighbours still like to poke fun at the Dutch splitting of dinner bills, taking groceries on holiday, and always looking for a bargain.
The fact that the issue is prime TV fodder goes a long way to explaining how the Netherlands has become the bloc’s “bad cop” opposing the kind of financial burden-sharing that its neighbours to the south say is needed to stave off an economic meltdown.
While the tough stance of Dutch Prime Minister Mark Rutte’s government has the backing of parliament at home, in Rome eurosceptic challenger Matteo Salvini denounced the bloc as failing to show enough solidarity.
“The European debate is embarrassing not to say sickening,” said governor Luca Zaia, a member of Salvini’s Northern League in the Veneto region, one of the hardest hit in Italy.
Joris Luyendijk, a Dutch author and political commentator, said Hoekstra’s hard line tactics could cause long-term damage to the Netherlands’ diplomatic relationships within the union.
“It’s horrible PR and horrible politics; at a time of unprecedented crisis Wopke offers southern Europeans an ideal hate figure. We will pay for this down the line, as a country.”