Opinion pieces, columns and insights into Dutch news and current affairs from key commentators


Change in the Netherlands is s-l-o-w

Shifts in official policy in the Netherlands take a long time but when a decision is finally made, it is not going to change, writes economist Mathijs Bouman. Change in the Netherlands is slow and sluggish. The process usually starts with a warning from experts that a certain situation could become untenable. It’s a phase that can last years. Then, slowly, the realisation takes hold that something should be done. The SER publishes a report and then the unions and employers lumber into action. They become deadlocked in ever-lasting negotiations. Every once in a while someone gets upset, organises a demonstration and leaves the negotiating table in a huff. But he will always return to the other barons and together they hammer out half a deal after which the politicians take over. The politicians wait for the elections so they can turn the accord into a policy during the cabinet formation. Cue some major concessions to iron out the differences and they’re on their way. After a couple of angry motions by MPs and some grumblings from the Senate, at long last we have a policy change. Compromise It’s an agonisingly slow process but it does have one advantage: the decision is set in stone. Everyone has put his oar in so a decision is irrevocable. It may be slow but it’s steady. Take the pension age hike. At the beginning of the nineties economists pointed at the aging population and said we needed to work longer. Everyone chewed on this for the next 20 years but in the end even the social conservatives of the SP and the PVV agreed to the hike. The PVV succumbed in 2010 when it supported the VVD-CDA cabinet and the SP in 2012 when a CPB report showed it too wanted to increase the pension age to 67. Two consecutive cabinets have now decided to increase the pension age. Both chambers have agreed to it. The consensus model has done it again – albeit even more slowly than usual. So forget the FNV’s call for a new early retirement plan. Ignore the false arguments which claim this will mean jobs for young people. Don’t pay attention to the polls that say the Dutch want to work fewer years. And don’t listen to the SP and PVV politicians who pretend to be in favour of lowering the pension age again. We are going to work longer. That’s a fact. It’s a decision, set in stone. No one is going to turn back the clock, not the FNV, not the SP and certainly not the PVV, no matter what they say. Everyone knows that a higher pension age is logical, reasonable and necessary. This article appeared earlier in the Financieele Dagblad   More >


Housing students and start-ups: home is where the bath is

The Netherlands wants to encourage start-ups, keep its international students and be a magnet for global talent. But we seem to be incapable of coming up with a solution to the shortage of housing for people on lower incomes, writes DutchNews.nl editor Robin Pascoe. One of the landmarks of being a parent is the day the last of your fledglings has flown. I’m not talking about the practically obligatory travelling in South America or Asia, but the bags and boxes in the hall which say your baby is off to college or university and, basically, won’t be coming back. It’s the time when you can finally pack up of those old mugs and plates you’ve been keeping for the kids, dig out the wrong coloured towels and start thinking about what you will do, one day, with their old room. No bath We got used to the new routine pretty quickly and look forward to our children’s visits, which consist of spending long periods in the bath – no bath at the student house – and eating take-aways in front of the telly. Student houses, in Holland at least, seem to be very strict about sit-down dinners at 7pm. Life rumbles on like this for a few years – more old bits of furniture head for Delft or Leiden – and then that awful day comes. Their degree course is coming to an end and they mention moving back in. Do not be flattered that they miss your cooking and your collection of bathroom lotions and potions. It’s just that, in the Netherlands, they don’t really have a choice. There is, in Amsterdam at least, no alternative. Scarcely a day goes by without housing and house prices being in the news in one way or another. And rental property for students, ex-students and all those youngsters working for start-ups – the ones the government is so keen to encourage – is non-existent, unless they are earning the sort of salary their parents are making. Low earners Dutch housing policy has for decades been skewed in favour of low earners and has created a generation of older tenants who have nice salaries but never moved from their cheap flat because no one ever asked them to. Today, 600,000 people are living in rent-controlled property that technically they earn too much to live in. The government has been trying to tackle this by allowing landlords to whack up the rents for people earning more than the rent-controlled threshold of €34,000 in the hope they will move out. But, so far, it has not worked. And why would you move when you’d be swapping your cosy little apartment that costs you no more than €710 a month for a cosy little apartment costing at least €1,000? The non-rent-controlled sector is, of course, an option. But what ex-student can afford to pay €1,000 a month for a tiny flat with one bedroom? Housing agencies and institutional investors frown on groups of youngsters so they can’t even share with a friend to pay the bills. Nor can they buy a place, unless they have rich parents who can help, because they have no savings and don’t meet official income requirements. So the students and the ex-students and the youngsters starting out on their career ladder are stuck. Some housing corporations and investors are waking up to the problem. Rochdale, for example, has devised a contract allowing a group of friends to share without meeting high salary expectations. Other initiatives like The Student Hotel offer a stop-gap for international students on generous grants and young professionals on short-term contracts, but are out of the financial reach of most Dutch students and people on minimum incomes. Single person units The government has launched an initiative to transform existing buildings, mainly surplus offices, into what it calls ‘residential units’. And Amsterdam is busy encouraging housing corporations and developers to build mini-homes for singles. One project just launched involves building hundreds of single person units of around 20 square metres in the west of the city. But rather than focus on building ever-smaller homes for single people, why not build homes with four or five bedrooms instead. They can be lived in by a group of friends, by students, by families and, when the population demographics change, by a group of elderly people with live-in carers. After all, in most countries, flat sharing when you are a student or starting out in your professional life is the norm. Anything, surely, is better than coming home to mum. A longer version of this column first appeared in the Xpat Journal  More >


You can’t come into the Netherlands via the Wildersdijk

Closing the borders to stop refugees coming to the Netherlands might be slightly more complicated than Geert Wilders thinks, writes economist Mathijs Bouman. Just in case nobody heard him, Geert Wilders said it again in parliament last month: the Dutch need to close their borders. Wilders has been saying this for some time and last month the PVV even started a flyer campaign to bring home the point. Bits of paper headed ‘Close the borders’ were handed out to the good people of Purmerend and Almere. The flyer sports a Dutch flag blowing in the wind, a typically Dutch windmill in a typically Dutch landscape and Geert Wilders leaning on a red-and-white barrier. We only see his upper half but we can be fairly sure he is wearing clogs and possibly a pair of typical Urker fisherman’s trousers. 'Mini Schengen' But not only the PVV dreams of closing the borders. The cabinet is thinking about a ‘mini Schengen’, comprised of Belgium, Luxemburg and Germany. A nifty solution because the Netherlands would continue to be free of outside borders. Let the Belgians and the Germans order the barriers and train the border guards, the cabinet thinks. That, too, is typically Dutch. At least Wilders is prepared to face the consequences of his actions. In an interview with the Algemeen Dagblad last month, the PVV leader when asked about the practical implication of these closed borders said: ‘Even if there are hundreds of border crossings, they can all be manned, by soldiers or military police.’ Rough estimate Hundreds of border crossings, Wilders says. That is a rough estimate indeed. It is to be hoped that any proposal to close ‘the borders’ is preceded by an analysis of exactly how much border we actually have. To close half of the border crossings would make little sense. It would create a lot of bother for ordinary citizens while the baddies can still sneak in undetected. Closing borders costs money. There are direct costs such as barriers and border police but also indirect costs for citizens and companies when people and goods are prevented from moving freely from country to country. How many border crossings does the Netherlands have then? I asked the customs office which resides under the finance ministry. It couldn’t tell me and I was directed to the transport ministry which didn’t know either. I was told to ask the infrastructure ministry but it hasn’t come back to me yet. DIY border crossing counting I decided to count them myself. I used Google maps to make a detailed search for border crossing roads and minor roads, Google Earth in case of doubt and Google Street View to see what the border crossing looked like from up close. I’m sure I missed quite a few shortcuts and smuggling routes. And I may have included some that locals would tell me are no longer passable. But I still think my count is not too far off the mark. Recognisable borders People who want to enter the Netherlands have a choice of 354 roads, of which 11 are motorways. A fair number are main roads. But most are country paths, village roads or glorified tracks. The border with Belgium is hardly recognisable as such. All roads traverse it as if it weren’t there at all – which is, in fact, the case. A few lone white markers remind the traveller that there was once a border. The German border is much clearer: roads come to an end at both sides of the border. That is why the eastern side of the country has fewer border crossings than the southern side. The province of Limburg is the undisputed champion: I counted no fewer than 145 roads entering the country via this province. The Wildersdijk There’s the A4 or the A7 for instance. But you can also choose to come in via the Joys of Nature campsite near Offenbeel. Or the Koeweg near Boertange, although it’s no more than a track on the German side. You can also make your way through the maize fields, then cross the Retranchementstraat into Zeeuws-Vlaanderen. That is the westernmost border crossing. But whatever you do, don’t take the Wildersdijk (I’m not making it up) near Rekken in Gelderland. That path stops at the border. A typically Dutch farmer has closed off the Wildersdijk with a typically Dutch gate. This article was published earlier in the Financieele Dagblad  More >


Ready for action: campaigning for the rights of Dutch nationals abroad

Ready for action: campaigning for the rights of Dutch nationals abroad

Most EU countries today accept dual nationality as a practical consequence of globalisation and increasingly mobile people. The Dutch government, however, continues to fiercely resist this 21st century norm, writes campaigner Eelco Keij. The Dutch reluctance to embrace dual nationality is partly because of electoral fear (Geert Wilders' PVV is doing extremely well in the polls), partly because of a lack of understanding of the practical consequences for Dutch citizens abroad, and partly because of the lack of a strong lobbying organisation based in the Netherlands. The refusal to accept dual nationality, however, is not the only disadvantage faced by the Dutch who live abroad. Voting, pension regulations, Dutch education, the digital ID to communicate with the government, access to consulates and embassies: there are many ways the Dutch government does a fine job of making its own citizens feel second-hand and ignored. Structure There is another side to the coin. With between 700,000 and 1.2 million Dutch citizens living abroad - think 4% to 7% of the total Dutch population - one would expect some kind of existing structure to bridge these groups, at home and abroad. At least the government should be thinking about this. Why? Because the Dutch people abroad constitute strong economic added value to the Dutch treasury, every year. There is a clear correlation between the geographical location of (many of) the Dutch abroad on the one hand, and the international resources coming in from those countries on the other. Moreover, Dutch citizens abroad are usually skillful people with a story to tell - they are often adventurous, intelligent and/or fell in love with somebody somewhere else, and decided to leave the homeland. Their offspring often speak different languages and have travelled extensively from a young age. In other words, they would be an interesting asset for the Dutch economy. Added value In Europe, several countries have recognised the added value of their citizens who live abroad and have started forming different kinds of structures to keep them on board and to make use of their connections and skills. Some countries, such as France and Portugal, even went as far as to introduce seats in parliament specifically for their citizens abroad. How different this all is compared to the Netherlands, where even a normal 21st century standard such as dual nationality is seen as a potential threat. Indeed, neither previous Dutch governments nor the current one intend to change one bit - they make that very clear, whenever asked. The Dutch abroad need to take things into their own hands: they need to create an organisation that represents their interests, while being able to lobby MPs, cabinet members and policy makers alike. And that is exactly what we have done with the announcement of a new single issue organisation to work on behalf of Dutch expats. We opted for Zurich to reflect the success of the Organisation of the Swiss Abroad (OSA) which was founded way back in 1916 and now represents 750 Swiss organisations in other countries. Main tasks The main tasks of the new interest organisation Nederlanders Buiten Nederland will be to: 1 Provide relevant information to both emigrating and emigrated Dutch citizens, connecting them to the right agencies; e.g. on nationality law, pensions, accessibility of embassies and consulates, Dutch education abroad and voting rights - possibly with its own magazine. 2 Become a powerful lobby force toward legislators/parliament on behalf of Dutch citizens abroad (appointing somebody who is physically present in The Hague). 3 Construct and maintain a database of Dutch citizens abroad, so that they can be reached promptly and efficiently whenever needed. 4 Set up and maintain an internet forum where Dutch citizens abroad can share their experiences and ask questions. 5 Operate as a bridge between Dutch citizens abroad on the one hand and government and industry on the other. 6 Encompass an organising function for (the children of) Dutch citizens abroad; e.g. summer camps and exchange projects. 7 Set up a physical office where Dutch citizens abroad can go whenever they are visiting the Netherlands. It is only by joining forces and emphasising the benefits Dutch citizens abroad bring to the Netherlands that we can fight for treatment that is fair and equal, and accords with today's globalised world. Eelco Keij is a former parliamentary candidate for D66 and lived in New York for almost 10 years. He is the author of Fortunate Connections, a political manifesto on the economic added value of the Dutch abroad.   More >


Commissie Stiekem – much ado about nothing

Home affairs minister Ronald Plasterk is not being honest about his dealings with parliament's security committee over the NSA leaks, writes Nicola Chadwick Many would say politicians are notorious for lying. Being married to one, I wouldn’t like to go that far. However, they do have a habit of omitting, framing, burying and twisting the truth. In Dutch politics, it is a mortal sin to misinform or lie to parliament. So when Edward Snowden revealed that 1.8 million pieces of data on Dutch telephone calls were passed on to the US, home affairs minister Ronald Plasterk asked the two Dutch intelligence agencies, the AIVD and its military counterpart the MIVD, whether they had been the source of the data. On hearing ‘negative’, Plasterk appeared on the evening news in October 2013 to express his horror that the privacy of Dutch citizens was being violated by US agencies. Only to hear a couple of months later that it was, in fact, a third institution, a combined AIVD and MIVD committee known as the CIVD, which had collected and passed on the information. This is the moment an upstanding politician should come clean and admit he had been poorly informed himself. If he had done that he would have faced severe criticism: shouldn’t a minister know what is going on within his own ministry? And besides, he had already spoken on the issue in the Lower House, and therefore inadvertently he’d misinformed parliament. Face-saving scheme So what does Plasterk do? He goes to parliament's security committee, nicknamed the Commissie Stiekem (secret committee). The Commissie Stiekem was set up to enable state and security secrets to be revealed to parliamentary party leaders without making them public in parliament. It was never meant as a face-saving scheme for politicians who had failed to get to the bottom of the matter. Once something has been revealed in the secret committee it is a criminal offence to tell anyone outside the committee. Of course, as these things do, the facts came to the surface and a debate was eventually held in parliament in February 2014, during which the opposition supported a motion of no confidence against Plasterk. The matter would then have gone away, had it not been for a report in the NRC newspaper that in fact the parliamentary leaders had already been informed that the Netherlands’ own agencies had passed on the data. The fact that the NRC knew this meant someone had leaked. Whodunit Now the race is on in the media to find out who. Labour party leader Diederik Samsom seems the most likely candidate, but what about Christian Union MP Arie Slob – wasn’t it a bit strange that he left parliament so suddenly? However, the sneakiest role is played by VVD leader Halbe Zijlstra, who declined to give Plasterk permission to reveal he had actually informed the parliamentary leaders. When it turned out someone had leaked, it was Zijlstra who secretly filed a complaint with the public prosecution department, knowing full well it would be much ado about nothing and may well cost someone his or her, no probably his, political career. If Plasterk thought this matter was so important he had to go live on the NOS news to speak out against the US blatantly violating our privacy, why did he not find it equally important to inform citizens of the Dutch kingdom that it was actually its own security agencies that had collected the information on behalf of the US secret service NSA? And wasn’t it paramount to rectify the matter for the sake of restoring relations with our allies, the US, after it had been wrongly blamed for collecting the data without the knowledge of the Dutch authorities? Mission impossible According to newspaper reports, it took the public prosecutor one and a half years to find out that 'one or more members of the CIVD have come into the picture with regard to the possible leaking of information'. Now a group of MPs has to investigate the matter in just three months. What’s more the names of the suspects will remain unknown to the committee investigating the case. Wait a minute. Isn’t that a mission impossible? Oh, but they are only investigating whether or not the case should be prosecuted – not who should be prosecuted. More a who-cares than a whodunit. In the light of the attacks in Paris, this matter seems even more trivial than it already was. Not a single Dutch citizen cares about who leaked, but they should care when a politician misuses a political instrument to cover up his own failings. Not to mention the severity of this kind of data being passed on by our own security agency. Plasterk survived Plechtold’s motion and promised honesty next time he is in the wrong. However, this may have become a matter of principle: if it is up to Zijlstra someone’s head should roll and it could be his coalition counterpart. Nicola Chadwick is a freelance translator/journalist/editor who regularly blogs on Dutch current affairs and politics. This column was first published on her blog Amsternic.  More >


Geert Wilders grandmother was a refugee too

Geert Wilders grandmother was a refugee too

History tells us that Europe wouldn't be Europe without refugees, write professor of migration law Thomas Spijkerboer and PhD student Martijn Stronks. Are Europeans prepared to offer protection to non-Europeans? That is the central question in the refugee debate. The apparent reluctance to do so has everything to do with the fact that non-Europeans are regarded as outsiders. That is why it is important to remind people that Europe and refugees go together, like Bert and Ernie and Sesame Street. Recent history shows that Europeans have not always been opposed to refugees. Their protection is purely and simply a matter of self-interest. During WWI, a million Belgians fled to the Netherlands. Most returned when the war was over, but not all. Virginie Korte-Van Hemel (junior justice minister from 1982 to 1989), for instance, is the daughter of Belgian musician and refugee Oscar van Hemel. From 1933, many Germans fled to other European countries and to the United States (the Manns, relatives of Anne Frank, Albert Einstein) where, after the Anschluss in 1936, they were joined by Austrians (among them Sigmund Freud, who fled to London). The Spanish civil war (1936-1939) led to an exodus of Spaniards, most of whom ended up in France. Writer Jorge Semprun was one them. Many fled from occupied countries to Britain, like Erik Hazelhoff Roelfzema (of film and musical Soldier of Orange fame) and the High Commissioner for Refugees Van Heuven Goedhart. A small number of Dutch Jews managed to flee to safety. After WWII, millions of refugees were milling around Europe, so many in fact, that a special International Refugee Organisation was founded to deal with them. There were displaced people, German minorities from Poland and Czechoslovakia (Günter Grass), Jewish survivors, and groups on the run from the Red Army. Dutch Indies A separate group came from the Dutch Indies and Indonesia to the Netherlands. They were ethnic Dutch or ‘Indo’s’ who fled the fighting of the war of independence (the Bersiap period, the police actions ). They were categorised as repatriates although many of them had never set foot in the Netherlands before, or hadn’t been there for a very long time. Although many had Dutch nationality and couldn’t be classified as refugees they felt like refugees and their welcome in the Netherlands reflected that. One of Geert Wilders’ grandmothers and housing minister Stef Blok’s father came to the Netherlands as repatriates. In 1951, 12,500 Moluccan soldiers from the KNIL Royal Indonesian army were transferred to the Netherlands on the order of a Dutch court because their position in Indonesia was too precarious. They were treated as refugees although they weren’t included in the VN refugee treaty. Steady stream From 1945 to 1950 international relations became ever more tense. A slow but steady stream of refugees from the communist countries entered western Europe. More came after the communist take-over in Czechoslovakia (the father of human rights activist Boris Dittrich), the Soviet invasion of Hungary in 1956 (junior minister Dzsingisz Gabor) and Czechoslovakia in 1968 (television presenter Martin Simek and tennis star Richard Krajicek). Until 1975, refugees also came from countries with fascist regimes. Greeks, Spaniards and Portuguese who left for political reasons didn’t claim refugee status because it was easy for them to get residency permits as migrant workers. Between 1992 and 1995, many refugees from the former Yugoslavia were given asylum in western Europe. In 1999, refugees from Kosovo also made their way to western Europe until Nato managed to put a stop to the incipient genocide of Kosovar Muslims with a military intervention against Serbia. Asylum seeker numbers and the problems of housing them were as great then as they are now. All refugees We Europeans are all refugees. Modern history shows that we’ve had to seek refuge in and outside Europe on many occasions. It also shows that we managed to build a life for ourselves in our new home. But the events of today uncovers something even more fundamental. Protecting refugees is not altruistic, it is a mutual insurance policy. I hope my house won’t burn down. But it might happen and so I pay my insurance premium every month. Meanwhile I hope that I won’t need that insurance but that someone else will profit from it. That seems altruistic but isn’t: I know I’m covered as well in the event something happens to me. Or, as footballer Marco van Basten is supposed to have said: when I play Germany I bet on a German victory. That way I can’t lose. The same is true of refugee law. We, as members of the global community, have agreed to help each other out in times of trouble. If all we have to do is welcome refugees we should not complain but count ourselves lucky that we’re not the ones having to leave our country behind. And we know that if that sea level keeps rising our grandchildren will find a new home elsewhere, too. This article appeared earlier in the NRC Translation: DutchNews  More >


Mark Rutte should kickstart a campaign to keep Britain in the EU

Mark Rutte should kickstart a campaign to keep Britain in the EU

Apart from the British economy itself, it will be the Dutch economy which will be hardest hit if the Brits decide to leave the EU, warn economists Rick van der Ploeg and Willem Vermeend. The UK is one of this country’s most important trading partners and investors and a Brexit would result in an economic downturn and the loss of many thousands of jobs. According to the polls, prime minister Mark Rutte's second cabinet isn’t doing very well. Friends and foes are divided about why that should be, but according to the golden rule in The Hague political circles, there can only be one culprit and that is the coalition itself. The fact that the Netherlands is one of the best performing economies at this moment confirms this, and history teaches us that this can only benefit the ruling parties. However, the polls are telling a different story. This month the OECD praised the Netherlands to the sky: things really couldn’t get much better. The economy will grow by 2.2% this year and by 2.5% in 2016, it predicted. And in 2017 it will grow by 2.7%. Unemployment will go down and the budget deficit will shrink to 0.7% of GDP in 2017 (Rutte 2 started out with a budget deficit of 4% of GDP) State debt will be among the lowest in Europe. The cabinet hopes to breeze through its remaining mandate on the strength of this rosy picture and score a resounding victory at the general election in March 2017. That may be too optimistic. Unforeseen circumstances Economic forecasts have a way of not materialising and there are always unforeseen circumstances to spoil the fun. Over the last decades the world economy has been fluctuating wildly, changing the prospects of individual economies almost overnight. We are no prophets of doom but there are other scenarios to be considered apart from the optimistic OECD forecast. There are serious indications that the world economy will be slowing down from 2016, mainly because of a lower growth rate in emerging economies such as China. This will have a negative impact on open economies of which the Netherlands is one. Growth will go down and unemployment will rise. Not only will the coalition have to field that blow, it will also have to cope with a society increasingly worried about the level of health care, care for the elderly, the power of Brussels and the refugee crisis. There is another danger, closer to home. It’s the UK referendum about the British membership of the EU, to be held before 2017. Prime minister David Cameron told chairman of the European council Donald Tusk in a letter last week he wants speedy negotiations about a wish list that might possibly keep the Brits in. EU worries Cameron wants more powers for national parliaments and a restriction of the rules surrounding European migration (EU migrants would have to wait four years before becoming eligible for benefits). He also wants better protection for countries outside the monetary union, such as Britain, from decisions made by the euro zone. Most European leaders have already spoken of their concerns about the consequences of a possible Brexit. They feel Britain is a EU member that is difficult to please and predict that the population will vote for the pound in their pocket and reject a Brexit. The annual benefit of the EU membership for British households is between £1,200 and £3,500 (around €1,500 to €4,400). Other EU countries are also pointing out that international think-tanks predict a Brexit would plunge the country into political and economic chaos. The British economy would be left reeling after taking a €80bn hit (around 2% of GDP) and unemployment would skyrocket. American economists are speaking of economic suicide while Barack Obama’s administration has made it clear that without EU membership Britain’s political role would be negligible. Negotiations Looking at the latest UK polls, these dramatic consequences haven’t hit home yet. Opinion is split down the middle, although the refugee crisis and a backlash over EU threats about a floundering UK are benefiting the Brexit camp. There are some very good reasons why the EU should start negotiating with Cameron. For political and economic reasons the EU can’t afford to lose Britain as a member. Without it, the EU will lose economic strength and political influence and the risk that other countries will follow suit will become greater. A Brexit would slice off one-sixth of European GDP and a quarter of the defence budget. Not only will the British economy suffer, the EU economy will take a pounding too. It also has to be noted that the British aren’t the only ones to be dissatisfied about what they see as too much EU interference. Many in the Netherlands feel the same. If Britain leaves the EU, the Dutch economy will be hardest hit, apart from the British themselves. After Germany, Britain is our most important trading partner. Exports account for some €50bn and 300,000 jobs. With investments worth €180bn, Dutch companies are large-scale investors in Britain which in turn is one of the biggest international investors in the Dutch economy. A Brexit also means losing an important political partner in the EU and power will inevitably move even further towards France and Germany. For Mark Rutte this should be enough reason to kickstart a European campaign to keep the UK in the European Union. His slogan should be: European when needed and national when possible. This means certain powers will be handed back to the member states and that cooperation in areas where nations share a common interest (security, employment) will be strengthened. In this, the British are our most important ally. This article appeared earlier in the Telegraaf  More >


We need a discussion on ethics to cope with innovation

We need a discussion on ethics to cope with innovation

Innovation is moving so fast it leaves citizens –and the law – standing, says trendwatcher Farid Tabarki. What is needed is a discussion on ethics. What do 3D printed drones, an Amsterdam Uber taxi driver and a camper van in Egmond have in common? Yes, they all move but that’s not what I’m getting at. All three are examples of the challenges of today. I’ll come back to that later, but first: King Willem-Alexander in China. When the king addressed the China Executive Leadership Academy he was asked to explain how a small country such as the Netherlands had managed to become a major exporter with a prosperous population. His answer was: ‘Independent courts and independent supervisors guarantee equal treatment of every citizen before the law, and the protection of human rights.’ This was immediately labelled as a comment on ‘human rights’ – not surprising when you look at the Chinese reputation for breaching them. Rules and regulations That same week, Freedom House published its ‘Freedom on the Net’ report which states that China beats even Syria and Iran when it comes to internet restrictions. It’s a huge achievement, but then the Chinese are used to doing things on a large scale. The king was right. Dutch prosperity is largely the result of a properly functioning state of law and reliable, if somewhat labyrinthine, rules and regulations. But sometimes the rate of innovation leaves the law behind and holes appear. Which brings me to the drone, the taxi driver and the camper van. Everyone can 3D print a drone. The question is who owns the air space it flies in? And what about the photographs it takes? Can Google simply go ahead and use drones to deliver packages, as it says it will be doing from 2017? Game changer The Uber taxi uses a smart platform which has infuriated drivers who work under the old system based on licences and rules. The camper van is the one whistle blower Ad Bos had to live in when he lost his job. Nowadays a hack or a download on a USB stick is the quick way of revealing government and company secrets. An ethical discussion is required for all three issues: how do we deal with privacy, small-scale initiatives and government transparency? These are not easy subjects for citizens to ponder. The human brain is hard put to take in the nature and the speed with which innovation happens, and the collective brain can’t keep up at all. Companies are already using what Deloitte calls ‘RegTech’, software to deal with complicated regulations. Ghandi – who started out as a lawyer – wanted laws to be ‘codified ethics’ but that ideal is now further away than ever. At Christmas, an institution which, apart from increasingly ugly decorations, has not seen any innovation for the last decades, the king has an excellent opportunity to elaborate on the subject in his speech. Farid Tabarki is a trendwatcher and founder of Studio Zeitgeist. Twitter: @studiozeitgeist This article appeared earlier in the Financieele Dagblad   More >


Will the Dutch come clean on their murky tax deals? I should coco

Will the Dutch come clean on their murky tax deals? I should coco

What’s the easiest way to upset a Dutch finance official? Call his country a tax haven, says journalist Gordon Darroch. Five years ago the Obama administration named the Netherlands as one of three low-tax countries (along with Ireland and Bermuda) that had allowed US multinational corporations to pay just €16bn in tax on €700bn of earnings, which converts to a rate of just under 2.3%. It prompted splutterings of outrage from the Dutch embassy in Washington and the Americans meekly withdrew the accusation. But the bad smell lingered like a week-old herring. Since then Dutch ministers have been resolute in shutting down any mention of the h-word. The defence against Obama’s declaration was that corporation tax is transparent and set at 25.5%, which puts the country in the medium tax bracket. What it omitted to mention was the Dutch tax administration’s habit of drawing up generous pre-nuptial agreements with multinational firms to entice them to relocate to the Netherlands. Benefits The benefits on both sides are obvious: the company cuts a hefty slice from its tax bill, while the Dutch nation nets a small income with little or no extra burden on its infrastructure. All countries have tax incentives to attract foreign investment, but the Dutch have been unusually prolific: a report by the economic institute SEO in 2013 concluded that €278bn flowed through Dutch-based shell companies every year. And the system is more opaque than transparent, since many of these companies take the form of Special Financial Instruments, which are not publicly registered. Last year the combined assets of the 14,400 SFIs amounted to €3.5 trillion. But since the global financial crisis the Netherlands’ tax arrangements have come under scrutiny from the European Commission. Two years ago Brussels drafted plans to require member states to outlaw letterbox firms, which were siphoning €150bn out of the region every year – the equivalent of the EU’s entire budget. That doesn’t include the tax lost through the cut-throat competition between jurisdictions in the eurozone. Financial research institution Somo found that 19 of Portugal’s 20 largest multinational firms were registered in the Netherlands for tax purposes, putting €2.5 billion of profits beyond the reach of the Portuguese exchequer. Portuguese Systematically depriving another country in the same currency zone of tax revenues is akin to cutting off your nose to make your face more efficient. Yet when Portugal’s domestic debt ballooned after 2008 and it sought bailouts from countries such as the Netherlands, Dutch commentators and politicians queued up to denounce the supposedly feckless Portuguese. Such lack of humility and self-examination does not bode well as Europe tries to harmonise its members’ tax regimes. Two weeks ago the European Commission ruled that a deal between the Netherlands and Starbucks, which allowed the coffee chain to put nearly €20bn of profits out of reach of the tax authorities, amounted to illegal state aid. The Dutch government threw up its arms in horror, insisting the deal complied with international tax laws and the commission, not it, was at fault. Thus we had the bizarre spectacle of ministers in The Hague protesting against a decision that allows it to claim up to €30m in back taxes from a multinational company. Coco Old habits, it seems, die hard. This week NRC revealed that Dutch bank ING was heavily involved in drafting a law that created a tax break for a new type of financial security known as contingent convertibles, or cocos. Cocos are a hybrid financial vehicle devised to shore up banks’ equity reserves in times of crisis. They function like bonds, but can be converted into share capital if a pre-set threshold is reached. The banks argued that these instruments should be tax deductible in order to bring the Netherlands into line with other jurisdictions. But there was a problem: if the exemption applied solely to banks, there was a high risk that Brussels would class it as state aid for financial institutions and veto it. The Dutch financial regulator AFM had already ruled that cocos were unsuitable for most ordinary investors because of their complexity. Finance minister Jeroen Dijsselbloem brought in the measure last June, bringing the banks €350m a year in tax relief. It took the form of an amendment to the Finance Act rather than a separate law, meaning it did not have to be vetted by the Council of State. Documents published by NRC show how ING, together with former finance minister Gerrit Zalm, now chairman of the nationalised bank ABN Amro, made several revisions to the draft law, including removing any reference to financial institutions. The suspicion is that the government and the banks were colluding to put Brussels off the scent. European Commission Economist Sweder van Wijnbergen told NRC: 'If there is any suggestion of state aid it has to be reported to the European Commission. These documents show that this suggestion existed, Dijsselbloem knew about it and sought a wording, in co-operation with the banks, that would steer the commission off course.' In the immediate aftermath of the banking crisis the Dutch government was in the vanguard of nations calling for more stringent financial regulation within the European Union. Dijsselbloem, in his role as chair of the group of eurozone finance ministers, was praised in Brussels for his firm handling of the Greek debt crisis. But back home in The Hague his ministry facilitates the kind of virtuoso accounting that would make a Greek restaurateur salivate. If the Netherlands wants to be taken seriously as one of Europe’s leading financial nations, it needs to practice tax compliance as well as preach it. Gordon Darroch is a British journalist living in The Hague. This column was first published on his blog Words for Press.   More >


A cost-benefit analysis of refugees will only fuel hysteria

A cost-benefit analysis of refugees will only fuel hysteria

A cost benefit analysis of the refugee crisis will inevitably focus on the costs and fuel the hysteria of Wilders' hordes. It would be better - and cheaper in the long run - to concentrate efforts on establishing a long-term policy, writes  economist Marcel Canoy. According to CPB director Laura van Geest, it doesn’t do to calculate the costs of refugees. According to Volkskrant columnist Frans Kalshoven – with in his wake a couple of applauding professors - this is exactly what should happen. Kalshoven’s argument is simple and logical. There are a number of objectifiable effects (accommodation costs, for example). Why not map these so you can separate them from the unobjectifiable, ethical and sometimes emotional issues (for example, the extent to which our society is willing to be fair or empathic). I’m with Kalshoven on many things. It’s fine to make a cost benefit analysis of matters natural and cultural before asking the ethical question of what we are prepared to spend on a symphony orchestra or a nature reserve. But it won’t wash with refugees. The costs of decent facilities (bed, bath and bread) are easily calculated. The benefits are speculative (what will happen to the labour market?) or impossible to express in figures (the impact on stability, solidarity or sense of security). Those benefits can’t be written off under the heading of ‘ethical arguments’. These are real benefits which can easily translate into solid euros, even if we have no idea how many. Unquantifiable You could argue that good researchers would give prominence to these unquantifiable benefits as well. Laura van Geest probably realises that the government's macro-economic think tank CPB doesn’t have a great track record when it comes to doing justice to benefits that are difficult to quantify. Health care is a good example, and so is the CPB report into the cost and benefits of migration (2003) in which unquantifiable benefits were reduced to insignificant footnotes. Even if the CPB were to rise above itself and make an honest attempt at interpreting these benefits, they would undoubtedly fall victim to the usual fate in the public discourse: uncertain benefits will always be equated with non-existent ones. The refugee crisis needs a thorough and calm political decision making process. A sustained European asylum policy will lead to stability in the region and a firmer sense of security. A mature handling of the migration issue will lead to selection and positive effects on the labour market, and greater public acceptance. Kalshoven’s well-meaning but naive attempt to rid the debate of emotion will achieve exactly the opposite. A cost benefit analysis of refugees will inevitably put the spotlight on costs and that will give Wilders’ already hysterical hordes more ammunition. It would be much better to do our utmost to increase the long-term benefits. That would be better for migrants and asylum seekers, better for Europe and better even for disgruntled citizens. Marcel Canoy is an economist, academic and lecturer at the Erasmus School of Accounting & Assurance This article appeared earlier in the Financieele Dagblad   This column comes with a PS from the writer: Misunderstanding 1 Some have seen this column as an attempt to gloss over effects, or even ban research. That is not the case. Research should only be carried out if it contributes something to society. I tried to explain that this analysis does not contribute anything to the quality of the decision making process and therefore isn’t fit for purpose. Misunderstanding 2 Refugees versus refugee policy Cost benefit analyses are made to evaluate policies, not people. This analysis is not about what refugees ‘bring’ but what the costs and benefits are of a more or less stringent refugee policy. Misunderstanding 3 The counterfactual A cost benefit analysis usually comes with a counterfactual: what happens if we don’t carry out this policy? Asylum policies in particular are costly but relatively cheap compared to the costs of a destabilised region or the erosion of the European Union. It is impossible to quantify this complex matter. That is why I think we should leave this to the ‘wisdom’ and insight of politicians, which will, of course, be subject to the usual democratic checks and balances.  More >