Splitting the Difference

Why the new Dutch Government isn’t as boring as it seems

Like a man in a diving suit trying to complete a marathon, Mark Rutte has finally staggered over the finish line. Nearly seven months after Dutch voters went to the polls, the incumbent Prime Minister has finally managed to negotiate a new coalition agreement with the progressive D66 and the conservative Christian Democrats and Christian Union; an odd collection of allies which the NRC newspaper memorably described as representing both “the cargo bike and the church pew”.

Dutch politics is often pretty boring, but when the elections took place this spring they generated a terrific fuss in the international media, focused largely on the possibility that the populist Geert Wilders might end up running one of the world’s most liberal countries. Many months later, the media’s reaction to the coalition agreement has been much more muted. This is perhaps because – like most people with any sense – journalists simply got bored of watching the marathon talks drag on and on. However, the low level of interest also reflects the fact that the result is completely unsurprising. It wasn’t impossible that Wilders would make a breakthrough, but if you’d asked an expert a year ago to predict the eventual outcome of the elections, they’d probably have said: Mark Rutte will win the most votes, Geert Wilders will do well but not well enough, and Rutte will eventually return to power with an unwieldy coalition of smaller parties, pledging to deliver a moderately right-wing agenda.170316090557-01-mark-rutte-dutch-election-results-0315-super-tease

In many ways, that’s exactly what’s happened. The agenda announced by Rutte and his partners this week contains little that would disappoint centre-right leaders in Britain, Germany or Scandinavia: lower taxes for individuals and businesses; more funding for the police, military and counterterrorism; tougher steps to fight climate change; and stricter rules on immigration. Coalition negotiations inevitably have rounded the sharper edges off the pre-election pledges, and grand promises about transforming the economy have been replaced by sensible but technocratic changes to the tax code. Controversial issues like euthanasia have been kicked into the long grass.

All coalitions are compromises, and Rutte’s latest is no exception. A blockbuster budget for the military is counterbalanced by a pledge to close coal power stations and build more windfarms. Tax cuts for corporations are offset by more paternity leave and more money for development aid. Stricter rules on refugee residency are balanced by lower tuition fees, and cuts to sick pay bills for small firms are offset by more money for teachers and nursing homes. Rutte himself described the new government’s programme as “ambitious and balanced”, but in practice it’s far more balanced than it is ambitious – a set of compromises which will (in the grand tradition of Dutch coalitions) make no-one entirely happy, but not really offend anyone either.

Looking a little deeper, though, there are a few things which are more unexpected. Along with the fairly mainstream stuff about taxes and education, there are also a few dog-whistles: odd little policies which most voters will hardly notice, but which will delight the bases of the smaller parties in the coalition. The idea of giving all 18-year-olds a book about Dutch history, for example, is unlikely to tilt the earth on its axis, but will delight conservative voters who are horrified about the fecklessness of young people today. The lefties get more houses being built without natural gas connections in the kitchen, and there’s a proposal to establish government-run cannabis farms to supply the country’s coffee shops. The real-world impact of these policies may be limited, but if you’re the kind of traditional-values voter who loses sleep over the fact that not enough Dutch schoolchildren know the words to the national anthem, you’ll be thrilled.

It’s also interesting to see the coalition agreement in the context of the broader currents reshaping Europe. Rutte has long been a reliable ally of Angela Merkel in her efforts to make Europe less free-spending and more competitive; a member of the am‘Northern Alliance’ of conservatives standing up to the spendthrift ways of hapless Greeks and Italians. Under the new coalition government, with the leftish Labour Party (PvdA) now out of power, that dynamic looks set to continue. The new government has firmly ruled out Eurozone governments forming a joint budget, and said the creation of new Eurozone debt mechanisms would be “undesirable”. They’ve also made it clear that future bailouts will require investors to take involuntary “haircuts” on their debts; and said they’ll expect all EU member states to “fulfil their responsibilities”. This kind of stuff doesn’t exactly set the pulse racing, but is likely to please Merkel and disappoint people like Emmanuel Macron, who has his own grand plans to reform Europe. Post-Brexit, the EU may end up looking more Dutch than before.

Within the Netherlands, the reaction to the new government has been largely positive. The parties which aren’t in the coalition are naturally opposed to it, but most people seem relieved that the circus over, and the government can get back to doing what Dutch governments do best: running the country quite competently without making any radical changes. However, it’s also worth noting that the story may not be completely over yet, for two reasons. Firstly, despite all the talk of how the Dutch “defeated the virus of populism” this year, the new government’s grip on power is strikingly fragile. Together, the four parties which make up the new coalition hold only 76 seats in the 150-seat parliament. Slender majorities aren’t unusual in the Netherlands, but the new administration will be the first four-party coalition for forty years, making it harder than usual for the Prime Minister to hold all the pieces together. The Christian Union and D66 remain bitterly opposed on issues like euthanasia and abortion, and it’s not unthinkable that one big bust-up over immigration or climate change could collapse the whole administration, forcing new elections. Mark Rutte is now on his third coalition in six years and has acquired a reputation as a canny negotiator, but – like a circus ringmaster trying to keep the peace between tigers and lions and bears – his future isn’t completely secure.

Secondly, it’s also worth noting that the new government’s whole agenda rests on a single basic assumption: that the Dutch economy will keep growing strongly. After a shaky few years, the Dutch economy is firmly on the upswing again, with GDP growing at its fastest rate for nearly two decades. During the coalition negotiations, this gave Rutte and his partners a lot of flexibility: they could afford to reverse some of Rutte’s own previous spending cuts, and increase funding for popular things like the police and schools, without having to make unpopular cuts elsewhere. However, this dynamic also means that the new government’s position is again rather fragile – even a slight dip in growth rates could play havoc with their plans, and potentially force the coalition to make some very difficult decisions. Like a man running up credit card debts ahead of payday, Rutte is assuming that he’ll be able to cover the bills, but it wouldn’t take much for things to go wrong. For now, the outlook is good, but it might not be too long before Dutch politics gets interesting again.

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