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


Dutch Labour party should heed Britain’s Jeremy Corbyn

Dutch Labour party should heed Britain’s Jeremy Corbyn

PvdA senator Adri Duivesteijn thinks it's time the Dutch Labour leadership returned to its core social-democratic values. He believes Jeremy Corbyn in Britain can show it how it should be done. Happy days are here again for British social democrats. Left-wing Jeremy Corbyn has been elected Labour leader by an overwhelming majority. An era of neo-liberal domination has come to an end. How can such a radical change of direction be explained? And could the same thing happen in the Netherlands? Distance There are two reasons why the Labour membership opted for an authentic leader with a classic social-democratic ideology: the gap that loomed between the leadership and the voters, and the leadership’s implication in the moves to erode politics, government and the public sector. The social democracy used to be characterised by a joining of movements in society with political representatives. The classic and tangible differences between rich and poor are no longer as sharply defined, the change from an economy based on manufacture to a services-based economy and the emergence of a broadly-based middle class has made the political playing field much more complex. Politics has changed dramatically. The natural alliance between the social democracy and innovative movements, extraparliamentary action and parliamentary action have become two separate worlds that are no longer communicating. The rift between the Dutch Labour party and union FNV is one example of many. Politics has become separate, a class of its own. Party membership as a political deed Without this structural bond it’s the state of the economy that seems to determine the outcome of an election. For many voters that might be enough but for many members of social democratic parties this non-participation is not as clear cut. Their membership is in itself a political deed. It represents a commitment to a certain ideology and a political desire for change. It implies an active role for a common cause. And when party leaders get to power and neglect the social democratic values as they see fit they are also damaging the pride and honour of the party members. The charms of neo-liberalism The rift will become even greater when social democratic leaders lose their grip on their own ideology. Seduced by the charms of neo-liberalism, pragmatism and an all too technocratic approach, European social democrats helped erode the role and position of politics, government and the public sector. Social democrats are complicit in relegating both politics and the government to the roles of manager or supervisor. Many public tasks have been outsourced, distanced or privatised. Citizens became consumers and have become the much-fought over objects of a fierce competition between what used to be ‘public services’. This has generated a feeling of unease in the middle classes. And the members of the social democratic parties are feeling like strangers in their own homes. Jeremy Corbyn, who exemplifies the belief in social democratic values, knows this like no other: Labour must stand for values that can’t be traded in but must be fought for time and again. By electing Corbyn, the labour membership has made clear that it’s time to return to the true values of the social democracy. The battle is not lost yet. Both the leaders and the members of the Dutch labour party should take heed. This article appeared earlier in Trouw  More >


Budget boredom: the cabinet is marking time and it shows

The government's 2016 spending plans are unambitious, show a lack of vision and highlight the balancing act this cabinet has become, says DutchNews.nl editor Robin Pascoe. Dare I say it? This year it was hard not to be somewhat underwhelmed by the presentation of the Dutch government’s annual spending plans. From a lacklustre king’s speech to the finance minister’s attempt to jolly up the proceedings by using a briefcase from 1947 to carry his crucial papers, it all felt a little forced. This year, like most recent budgets, the main points had already been leaked. Even the government’s communications strategy - stress the economy is doing well but we need to do better - was in the public arena. Little wonder then, that this year’s budget was a hollow occasion. Even the comments from opposition party leaders were predictable - D66’s Alexander Pechtold spoke yet again about the cabinet’s lack of ambition and PVV leader Geert Wilders did his usual ‘tsunami of asylum seekers’ bit, with a dash of ‘blood on their hands’ thrown in for good measure. Yes, the refugee crisis is the dominant issue at the moment, but this is a European issue, not a Dutch one. At a local level, we’ve got the endless calculations about the impact of the budget on spending power instead. Does anyone really notice an alleged 1.4% increase in the amount of disposable cash they have, as the government would have us believe? It is no secret in The Hague that the two ruling parties - the right-wing VVD and the social democratic PvdA - disagree about many things. In 2017, there is a general election and support for both the ruling parties is well down in the polls. So, this is a wait-and-see budget.  A cut in income tax here, a bit of extra money for defence there... nothing controversial. Everyone is waiting for the next big domestic thing to come along. As it will when the general election campaign kicks off.  More >


Hey city dwellers: distance is dead!

Economist Mathijs Bouman never got the memo that the city is the only place to be. But in his quiet countryside hideaway, he is not sorry one bit. Distance is dead. It was killed by the internet. At the end of the ‘90s British journalist Frances Cairncross predicted the murder in her bestseller Death of Distance. Thanks to the internet location no longer matters, Cairncross wrote. No one will be stuck in traffic jams because there will be no need to get from one place to another. And no one will have to be stuck in a stuffy office in a polluted city. As long as you have a fast internet connection you can work absolutely anywhere. Well, it convinced me. I went out and bought myself a nice house on a big piece of land at a considerable distance from the Noordzeekanaal. The internet is quick as a flash. This column arrives at the Financieele Dagblad in less time than it takes to hit the send button. When I’m called upon to do something for radio, Skype and a good microphone make it seem as if I’m in the studio. In case of breaking news I slip on my good jacket and hey presto I’m live on RTL-Z. Fast internet can put me anywhere I want to be. It’s wonderful. Life is good in the Dutch countryside. The air is clean, local initiative thrives and my neighbour gives me a friendly good morning when I pop out to get my spelt bread (yes, we have spelt bread here) at the local bakery. Distance is dead and I’m doing a jolly dance on its grave. But it seems I’m dancing alone. Sometime at the beginning of this century a collective memo went out to journalists, writers and other ‘creatives’ saying that the party of the future was going to take place in the city. Except I never got the memo. The city is hipper and busier than ever and everyone wants to live there. That is where the good restaurants are and the best Belgian beers flow. It has the best Rembrandts and the most popular DJs. To young, and not so young, professionals the city has become the only relevant reality. The countryside is no more than a muddy stain between cities with crap 4G reception. That is why houses in Amsterdam are already more expensive than they were before the crisis. The average house price is €297,000, higher than it ever was. In Haarlem prices are rocketing too. As the housing market in the big cities is heating up and small apartments are sold for ridiculous prices, farm houses in the country are patiently awaiting the first viewing of the year. Us bemused country folk shake our heads at this new-fangled city silliness. First you fight for a couple of square feet to call your home, then you squeeze yourself into some trendy bar with all the other self-employed while some hip millennial knocks his frappucino all over your expensive Macbook. Listen city dweller: distance is dead! Really, that mud stain is not such a bad place to be. And no, I’m not selling. I’m staying. Mathijs Bouman is an economist and journalist. This article appeared earlier in the Financieele Dagblad      More >


The tax on Tesla cars is crony capitalism in the polder

The tax on Tesla cars is crony capitalism in the polder

Crony capitalism in the polder exists. Just look at the tax on Tesla electric cars, writes economist Mathijs Bouman. In the American state of Michigan you’re not allowed to buy a car on the internet. As of last year, car buyers have to use an existing car dealer. A lot of car manufacturers have dealership networks so it doesn’t present much of a problem. But there’s one make that only has showrooms and an internet shop. Electric car maker Tesla is the only car manufacturer which sells directly to clients. Other American states, such as New Jersey, Colorado, Texas, Arizona and Virginia, have adopted anti-Tesla laws and put the kibosh on direct car sales. It’s what Daniel Crone, professor at the University of Michigan, calls ‘crony capitalism’ in a recent scientific report. It’s traditional car makers and dealers using their political influence to put one over on a new and potentially dangerous competitor. As a result the consumer suffers and the technological advances of electrically powered cars are being sabotaged. Here in the Netherlands we take a much more liberal view. It’s all go with the electric revolution. Fully electric cars – the so-called zero emission cars – will remain subject to the low 4% additional tax liability for lease cars, junior finance minister Eric Wiebes announced last week. The owners of hybrid cars will be paying more but, says Wiebes, the ‘early adopters’ who choose to go electric all the way can count on the undiminished support of the cabinet. ‘Undiminished’ is a relative term in this context. The 4% additional tax liability only covers electric cars under €50,000. Cars over €50,000 are subject to a much higher rate. And there’s only one make that sells electric cars of over €50,000. That’s right, it’s Tesla. The cheapest online model costs €83,000. Driving a Tesla would add thousands of euros to the annual lease car bill. The €50,000 cap is not something Wiebes himself came up with. It was the motor trade sector organisations such as Bovag (dealerships) and Rai (manufacturers and importers) who put it to him and the cabinet was happy to oblige. Crony capitalism the Dutch way. When asked, a Bovag spokesperson denied the cap is meant to foil a newcomer and his superior product. On the contrary, it promotes a level playing field because without the cap luxury electric cars would profit from a more advantageous tax break than cheaper cars. I’m not convinced. There’s another expensive zero emission made by an established car maker with a dealership network: Toyota’s hydrogen Mirai. It’s not for sale in the Netherlands yet but in Germany it’s priced at €79,000. It’s pure luxury, but there’s no €50,000 cap on hydrogen cars, Wiebes said. It makes sense. Mathijs Bouman is an economist and journalist This article appeared earlier in the Financieele Dagblad  More >


Sheer numbers force shift in Dutch government’s stance on refugee crisis

Back in April, the Dutch government almost split over the matter of what to do with failed asylum seekers who are unable or unwilling to leave the country. As tens of thousands of refugees advance towards the heart of Europe, the coalition has now been forced to find common ground on how to tackle the crisis, writes Nicola Chadwick. It wasn’t long ago that the VVD called for Europe’s borders to be closed completely to boat refugees. Parliamentary party leader Halbe Zijlstra saw this as the only humane answer to the tragic drownings in the Mediterranean. It was only when 800 people drowned in one night in April that the international community was prompted into sending ships to prevent more tragedies at sea. Up to then the downsized Frontex mission focused on preventing the boats from entering European waters. Then European leaders approved a plan to bomb boats that might be used to traffic refugees to prevent them from leaving port. However, European naval ships cannot 'simply bomb boats in Libyan waters' without a UN mandate writes migrantreport.org. Last year, the former junior justice minister Fred Teeven warned several times of 'shocking' increases in the numbers of asylum seekers. These migrants never materialised. In May last year, 1,000 people were reportedly applying for asylum every week, only the junior minister forgot to mention the figures included people reapplying who were already here. In November, Teeven reiterated his warning that as many as 40,000 migrants were on their way to the Netherlands and municipalities would struggle to accommodate them. It’s only now that we are seeing what it looks like when tens of thousands of migrants are on the move. So far an estimated 340,000 people have entered Europe this year from countries like Syria and Eritrea. That is still just a fraction (0.068%) of the European population. Compare that to Lebanon where 1 in 5 of the population is now Syrian. Conspiracy of neglect The world had almost become indifferent to a constant stream of images of people in unseaworthy vessels attempting to cross the Mediterranean since the beginning of the year. However, the discovery of 71 bodies in the back of a lorry in Austria in August and last’s week’s photograph of the lifeless body of a little three-year-old boy changed that. Finally, the seriousness of the situation is getting through to ordinary people, prompting them into action. As a result, collections for shoes, warm clothes, blankets and tents are being set up. And demonstrations and Facebook events organised to welcome refugees. Amnesty International has called the current crisis 'a conspiracy of neglect'. There are more than 50 million people fleeing wars worldwide, the highest figure since World War II. The VVD consistently refer to this group at best as migrants, Labour looks upon them more sympathetically as asylum seekers. In truth, they are a mixture of economic migrants and refugees, but most are Syrians and Eritreans fleeing war. The VVD wants Syrian refugees to be kept in camps in the region and European borders closed. It is a policy that plays into the hands of people traffickers as desperation drives people into the hands of criminal gangs. And besides, up to now millions of refugees have been kept in camps with inadequate facilities in neighbouring countries. The Christian Democrats have called for safe havens to be created. Even though the Netherlands’ last attempt to guard a safe haven ended in the massacre of 8,000 Muslim men and boys in Srebrenica. D66 leader Alexander Pechtold has called for the Netherlands to be 'magnanimous' and take in more than the Dutch quota. The Christian Union wants to set up an Airbnb for refugees, so that people can open their own homes to welcome them. The anti-immigration PVV just calls the people who have risked their lives to reach Europe 'gelukszoekers', (basically people looking for a better life) and says they should be sent back on arrival, preferably in the same boats they arrived in. PVV leader Geert Wilders even attended a council meeting in Zeewolde to speak against the municipality taking in asylum seekers. Like Nigel Farage of UKIP, he blames the current influx on Germany’s open door policy. Dublin agreement Labour leader Diederik Samsom says the Dublin agreement which stipulates refugees must apply for asylum in the first EU country they enter should be disregarded. In fact it already has been – albeit temporarily. He believes in six months’ time there will be EU camps in Italy and Greece where refugees will be registered and redistributed to the various EU countries. Samson is calling for European agreement to 'harmonise' asylum policies so that refugees do not shop for the country with the softest approach. Just over a week ago, prime minister Mark Rutte warned the influx of refugees would undermine Dutch society. VVD parliamentary party leader Zijlstra felt that Italy was chucking the problem over the fence by allowing the people who washed up on its shores to pass through the country without registering them. Earlier in the crisis, the government ignored a parliamentary motion to increase the number of vulnerable asylum seekers invited to take refuge in the Netherlands from 500 to 750, so that they could avoid the long and dangerous journey across the Mediterranean or via the Balkans. Harsh rhetoric Germany is planning to take in 800,000 refugees, as a result it has become a symbol of freedom and safety for the refugees. Ultimately the country will benefit from the newcomers. Three out of four Germans support the government’s policy and over 60% are willing to help refugees themselves. The images we are currently witnessing remind us of the migration of East Germans via Hungary and Austria to West Germany at the end of the Cold War. In the Netherlands, less than half the population supports taking in refugees. But that is not surprising considering the harsh rhetoric in the immigration debate in recent years as even moderate politicians try to outsmart Wilders. So far, the reaction and solidarity among European countries has been woefully inadequate. At an earlier EU conference, European countries failed to take up the gauntlet and agree to a distribution ratio when the EU target was to take in 40,000 refugees. Now the UN says EU countries will have to take in 200,000. If a redistribution key is agreed, the Netherlands will take in just over 7,200 refugees on top of the 2,000 agreed back in April, but it will only do so on the condition that African and Arab countries concede to the repatriation of economic migrants. Public opinion and the sheer numbers of people on the move are forcing government leaders to shift position. Now foreign minister Bert Koenders says: 'The Netherlands wants to be in the leading group', and is drafting a plan with Germany, Italy and France on how to accommodate and distribute refugees in the EU.  In January, prime minister Mark Rutte will take over the European Council presidency. As such, he may have to take the lead in the current crisis. 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 >


Dutch minister wants to let Big Brother watch us

Dutch minister wants to let Big Brother watch us

If home affairs minister Ronald Plasterk gets his way, Big Brother will spy on us all with impunity. It's time to ditch his draft proposal, writes journalist and internet safety expert Menso Heus. Home affairs minister Ronald Plasterk chose the depths of the silly season to offer up for ‘consultation’ a draft proposal which rides roughshod over the basic rights of every Dutch citizen: the new law governing intelligence and security services, WIV. If this proposal becomes law, the intelligence and security services AIVD and MIVD will be given unprecedented authorisation to access private data. With the minister’s permission and without even a hint of suspicion of any criminal behaviour on our part, the services will be monitoring and analysing our phone conversations, email exchanges, web surfing behaviour, etc. The data gathered will be kept for up to three years and can be shared with foreign secret services. The proposal has been carefully drafted: there is no mention of ‘mass surveillance’, the kind that Edward Snowden uncovered some time ago but that, clearly, is what this is about. Instead of protecting us from such comprehensive oversight, the Dutch government now wants to participate in it. Rights The arbitrary tapping of the means of communication used by innocent and unsuspected citizens contravenes the constitution, the European Convention on Human Rights, the International Covenant on Civil and Political Rights and the jurisprudence of the European Court of Human Rights. It is also in direct opposition to the United Nation’s Universal Declaration of Human Rights. As if this isn’t bad enough, Plasterk also allows the services extensive hacking powers. They can, for instance, use your computer without your knowledge to spy on a suspect. If you yourself are the target, the services can activate cameras and microphones in your equipment from a distance. Hacking makes systems unsafer and easier to access by criminals. But the new law doesn’t contain a provision to repair the damage, or even an obligation to acknowledge that any damage was done. Implications The implications for the freedom of the press are dire. The law offers some guarantees for the protection of journalistic sources, but as journalists and their sources are part of the government’s mass surveillance effort, that protection means exactly nothing. Journalists and their sources could never again be sure of an unmonitored exchange. Whistle-blowers who want to leak abusive situations anonymously will find it next to impossible to do so. The Dutch whistle-blowers platform Publeaks, where concerned citizens can report abuse anonymously, will also be spied on by the government. This also puts the systems of the forty affiliated media outlets in the danger zone. Reading behaviour will be monitored: the services will have no problem finding out which media platforms we are looking at, from Volkskrant.nl to Wikileaks.org. The consequences of such government spying are clear to see in the United States. The American security service NSA has been involved in mass surveillance and espionage among journalists for some time. As a result, journalistic sources are no longer as prepared to talk and the media are increasingly putting a lid on information that could lead to trouble. This is what is described in the Human Rights Watch report ‘With Liberty to Monitor All’ as the chilling effect. Court The Dutch intelligence services have been reprimanded repeatedly by the courts for unauthorised actions towards journalists. Not only is it unlikely that with the new possibilities at their disposal they will suddenly behave, their activities will also go largely unmonitored by the – possibly partisan and not always well informed - politicians whose responsibility this is. Free Press Unlimited is not against the modernisation of legislation concerning the intelligence and security services. We recognise that some persons or organisations which are legitimately deemed a danger to society should be subjected to efficient scrutiny. But it’s the governments which allow a blanket surveillance of their own citizens which constitute the biggest danger to society. That is what we see in the dozens of countries in which we are active. We call on all political parties – especially the ones that sport the words ‘freedom’ and ‘democracy’ in their names – to return this draft to the minister forthwith. Citizens who want to comment can do so until September 1 on www.internetconsultatie.nl/wiv Menso Heus is a 'technology officer' and internet safety expert at Free Press Unlimited. This article appeared earlier in the Volkskrant.  More >


Available now: Imtech washer-uppers

Available now: Imtech washer-uppers

  The Imtech debacle and why nobody, including the supervisory board, saw it coming except a couple of hedge funds and a lone ABN Amro analyst. 'The whole thing is pathetic', writes Marco de Groot. Imtech has been declared bankrupt and the last CEO and CFO will without a doubt do penance, and rightly so. Still, it can’t just have been these two who pushed the company over the edge, can it? For years brokers and investors were mesmerised by Imtech’s unique ability to acquire and grow at a rate of knots, especially in Germany and the Scandinavian countries. The only place they didn’t do quite so well was in the domestic market of the Netherlands, also the home of the dispersed company’s administrative mission control. Interview I remember the moment I stopped believing in Imtech. It was in 2012, some €1.5bn in market value ago. In an interview, CEO René van der Bruggen claimed his company had not suffered any damage from the crisis and that he saw no reason for the acquisitions to stop or continue at a slower pace. Many investors and analysts trusted him as Imtech had never issued any warning in times of economic turmoil, not in 2002 and not in 2008. And yet the first hedge funds had been going short because of rising working capital and margins. Imtech probably provided extended payment terms in exchange for higher margins which effectively meant it was playing banker to its clients. Or projects weren’t finished, obscuring losses. A pyramid scheme, in short. No talks Van der Bruggen said he would not talk to these hedge funds. Either he simply - and scandalously - refused to defend investors’ interests or he was afraid his backfiring scheme would be brought to light. ABN Amro analyst Teun Teeuwisse dared publish the figures and views of the hedge funds and was put in the stocks. The rest is history. The damage is enormous, not only to Imtech staff but also to society and the reputation of the Netherlands as an investor friendly country. Shares are worthless and banks which have supplied credit based on figures approved by accountants are left with the burden of debt. Any accountant worth his salt looks beyond the figures he’s presented with. Why didn’t they spot this? Those same accountants, no doubt protected by their disclaimers, will now be calculating just how big the damage is. The whole thing is pathetic. Supervisory And what about the supervisory board? Those people with their impressive CVs and loads of experience, why didn’t they see what was happening? In England, a Libor trader recently received a fourteen-year prison sentence.  Society would have been better if he was doing a stint washing dishes in an old people’s home. At least he would be doing something useful for society. I hope the whole sorry Imtech mess will generate dozens of washer-uppers. I also hope you or your pension fund invested in one of those clever hedge funds that went short. At least your pain will not be as great. Marco de Groot is one of the founders of consultancy and coaching bureau 8daw.  This column was published earlier in the Financieele Dagblad      More >


Youp drives a Jeep on holiday in Scotland

Youp drives a Jeep on holiday in Scotland

Comedian Youp van 't Hek is on holiday in Scotland and finds his left-hand drive is not as easy to handle as he thought. Driving a car with the steering wheel on the right-hand side is difficult enough so why not make life easier and go for an automatic. It’ll save you from having to change gear with your left hand. So said a good friend who likes to dole out good advice. This time he was meddling with my trip to the Highlands of Scotland. I wanted to take my own antique mid-life motor but the boat to Newcastle was full. My wife agreed with my friend. We should hire an automatic. I said we’d see when we got to Glasgow. In the meantime I hired a Mini via internet. I liked the idea of bumping through the beautiful Scottish landscape in a Mini. And all that stuff about changing gear would sort itself out. I can shoot a football with my left and right leg, I write with my left hand and I throw with my left. I am ambidextrous. No problem. The automatic car turned into a bit of a thing. Lots of people were wading in. Why was I being so stubborn? Why did I always do the opposite of what everyone else wanted? What did it matter if an automatic is that much easier and thus safer? Did I want to be responsible for the death of my family? I said we’d see when we got to Glasgow. Exchange Last Monday we arrived and I asked the Europcar lady if I could exchange my merry Mini for an oldie automatic. She searched the computer for a long time and then said they had one automatic left. I caught the word Jeep in amongst the Scottish which sounded like a promising deal. A Jeep among the Lochs. I felt like someone out of an advertisement for a really cushy pension scheme. I pictured our Jeep on the edge of a river full of jumping salmon. Perhaps I should buy a rod, some wading boots and an outdoor smoker and… The Jeep cost a hell of a lot more than the Mini. I said ok, signed 17 times on the dotted line and was given the key. The car was in spot 36B. And there, indeed, it was. The Jeep. It wasn’t one of those romantic jungle things you see in survival shows with Z list celebrities being bounced around deserts. This was a tank. I could single-handedly restore order in Syria, Yemen and Iraq in it. It was a car that would keep apart rioters and policemen on strike with ease and wouldn’t topple if required to lift a piece of bridge. Knobs and levers I climbed in and spent the next hour trying to figure out what the 921 knobs and levers were for. Windscreen wipers wiped, windscreen sprayers sprayed, seats shot back and forth, the roof opened and closed as did the boot, and the GPS could do just about everything except tell us where we were going. My wife suggested a couple of times we go back and ask for the Mini to be restored to us but I said no. Not with all that dangerous gear changing. At last we moved. We were actually driving, on the left side of the road. Or on the left side of the left side, in fact. I had to get used to the ridiculous width of the car, you see. Lots of Scots will have been be able to follow my progress. From Glasgow to Edinburgh the street lights were kissed by my wing mirror and the grass on the roadsides won’t have to be cut for years to come. I have given Loch Ness its monster. When you read this I have another two days to go. We drive at a snail’s pace as nice little Minis pass us by, beeping as they go. Will we survive? Of course. This is a tank, albeit one without wing mirrors and hubcaps, and you simply cannot get yourself killed in one. So the question for the airheads in Wassenaar and Blaricum where 90 percent of these vehicles can be found: how do you manage to do it? Youp van 't Hek is a comedian and writer. This column appeared earlier in the NRC  More >


The Dutch economy: The old and the new normal

The Dutch economy: The old and the new normal

Economist Mathijs Bouman says the 2% growth rate predicted for 2015 by the number crunchers at the CPB hides a rising structural deficit. It’s taken a while but the optimism virus has now definitely spread to the economists of the CPB. Over the last year, the government forecasters have become more cheery-faced with every new projection although they hardly went overboard. Last year the CPB would not go further than a 1.25% economic growth rate for 2015. The euro nose-dived, as did oil prices, the housing market started to show signs of life and internal demand rose. But the forecast by the number crunchers in The Hague only made it 2% tops in June. There has been much bad news since. The cabinet has been scaling down gas production in Groningen, the Chinese economy is cooling down, the Brazilian and Russian economies are in recession and world trade is stagnating. But in spite of all this the CPB forecast remains at 2% for the whole of 2015. And next year it says it will be 2.4%. Should this really come about the growth rate will be higher than the average pre-crisis rate. Forget the ‘new normal’ of 1%, the Netherlands is growing again at a pace we thought was normal before the crisis. Unfortunately the ‘old normal’ is surfacing in other CPB figures: the budget deficit is going down at a slower pace than predicted. With revenues from gas down and a €5bn tax reduction, the budget deficit for next year will be 1.5% of gdp. In June the SPB prediction hovered around the 0.8% mark. Granted, 1.5% is still well under the maximum deficit of 3% allowed under the European stability and growth pact. Nevertheless, the cabinet is starting to go back to its old spendthrift ways. This is especially clear from the so-called structural deficit, or the budget deficit corrected by conjunctural ups and downs. Next year the structural deficit will go up to 1.1% of gdp. According to the budgetary rules of the European Union this figure should be around 0.5%. A hike in the structural deficit during a conjunctural up is understandable politically but not very wise from an economic point of view. Economists call it procyclical budgetary policy and they never pronounce these words without a moue of distaste. I would like to know if all the Keynsian economists in this country who booed the policy of cutbacks of this government in the last few years will be equally outraged about the rising structural deficit. Mathijs Bouman is a macro-economist. This article appeared earlier in the Financieele Dagblad  More >


A blast from a distant past: the basic income

A blast from a distant past: the basic income

Economists Rick van der Ploeg and Willem Vermeend don't think the basic income, which a number of local councils want to experiment with, is a very good idea. Long ago, in the 1970s, left-wing parties dreamt of a basic income for everyone: young, old, rich and poor should all get a free, no strings attached, hand-out from the state. The amount would be around the poverty threshold, currently at around €1,000 a month. According to advocates, a flat income would do away with complicated social security schemes, such as benefits. Many would lead happier lives, their dignity intact. People on benefits would no longer have to suffer the indignities of having to apply for jobs and pesky controls would also be a thing of the past. Unfortunately for them, the idea was laughed out of parliament by a large majority of politicians. Not only would it be prohibitively expensive, it would also reward laziness, the kind of hammock scheme which would lead to fewer people in work and higher taxes for businesses and workers. And so the basic income idea – which was never implemented anywhere in the world – was quietly shelved. In the past, right-wing economist Milton Friedman proposed a similar scheme which abolished all benefits via a so-called negative income tax system. This idea, too, was relegated to the bin. It’s back Now the basic income is back. Its adherents never really gave up on the idea and here they are, 40 years on, waging a summer offensive. Over the past few weeks the media, in the middle of the silly season, offered ample coverage to enthusiastic left-wing aldermen in places like Wageningen, Nijmegen, Tilburg, Utrecht, Groningen and Maastricht wanting to experiment with local variations of the basic income in their towns. Although it is not entirely clear what these experiments entail, the fact is that they constitute an additional, far-reaching adjustment of the present benefit system. Some propose a three-year period of around €1,100 a month for people on benefits (on a voluntary basis). This money will be paid out unconditionally. There is no obligation to apply for jobs. They will receive no further financial support from the council and they will be allowed to earn extra on the side. Advocates of the scheme say that the fact their extra income will not have a negative effect on their benefits will make people want to work more. Whether this is true we will have to see but if it is, then it would be an obvious case of false competition. People with a free basic income would settle for lower pay and so take jobs from the working people who are in actual fact stumping up the money for this scheme. The lack of any controls surrounding the scheme would also promote the black economy. Contradiction The experiments are in complete contradiction to the incentive-led social security policy the present cabinet is trying to achieve. For this reason alone the government should put a stop to these silly season schemes sooner rather than later. Surely local councils have better ways of spending their money. The tenacity of basic income adherents is astounding. They now want to impose it via the local councils. Any argument against this pie in the sky scheme is regarded as right-wing nonsense. They also claim that detractors of the scheme have a jaundiced view of humanity and that those economists who say the sums don’t add up belong to the classic (the right-wing) school of economy. But they forget that not only the left and the right of the political centre are against a basic income, the SP is as well. The socialists rightly fear that doling out free money will cause serious cracks in our current social security system. Elections It is to be expected that the basic income will resurface in the election programmes of some parties in 2017. GroenLinks is almost certain to make it a campaign issue. In order to save those in favour from having to do the sums, we have done them for them. The CPB, in an earlier report, has already concluded that a basic income of half the social minimum (around €750 a month) will lead to job losses of around 350,000. A simple sum also shows that a basic income of €1,100 per month for every Dutch citizen would cost around €200bn. Minus the benefits which adherents of the scheme say can then be abolished, the cost will be much lower, around the €75bn mark. In order to cough up this money a significant hike in taxes will be necessary. Economist Raymond Gradus in his article for Mejudice put it at a staggering 25%. The adherents of the scheme don’t agree with these ‘right-wing’ figures. They think the positive effects will do much to bring down the final cost. Based on unproven and tenuous assumptions, they think many more people will return to work and that many billions will be saved on bureaucracy, care and policing. And people will be happier, they claim. That is as maybe, but adherents of the scheme must surely agree that those who have to foot the tax bill for all this free money will feel less than elated. Willem Vermeend is a former State Secretary of Finance and Minister of Social Affairs in the Dutch government and currently entrepreneur and professor at the University of Maastricht. Rick van der Ploeg is a former State Secretary for Eduction, Culture and Science in the Dutch government and professor of economics at the University of Oxford. This article appeared earlier in the Telegraaf .      More >