Analysis: Post-election Dutch may be awkward EU partners

THE HAGUE (Reuters) - The Dutch general election on Wednesday is likely to send a message of commitment to Europe diluted by grudging support for more integration and downright distaste for blank cheques to save the euro.

As such, the Netherlands finds itself in the new mainstream of north European creditor countries, led by Germany, where economic anxiety and resentment at the perceived fecklessness of Greece and other southern debtors is sapping support for the single currency.

As a trading nation that sends three-quarters of its exports to the European Union, the Netherlands, one of the EU's founding members, has good reason to be broadly pro-European, and there is no groundswell of agitation to quit the 17-member single currency bloc.

But the days of automatic, unquestioning Dutch backing for "more Europe" are long gone. As far back as 2005 the Netherlands, along with France, voted down a constitutional treaty for the EU in a referendum that was as much an eye-opener for the Dutch as it was for the rest of Europe.

"There is an emotional aversion on the part of some people in the Netherlands against the European integration process - its speed, its breadth, its all-encompassing nature," said Alexander Rinnooy Kan, who ended his term last week as chairman of the Social and Economic Council, an important government advisory body.

NATIONAL AMBIVALENCE

Rinnooy Kan said the sense of unease about Europe's direction had been compounded by irritation with the country's generally pro-European elite for their failure to get to grips with an economic crisis that shows no sign of ending.

Indeed Dutch voters are more concerned about the economy, healthcare and social security than about Europe as an issue, according to an opinion poll last week.

The Dutch business world is still a strong supporter of Europe. Abandoning the euro would be like trying to unscramble an omelette, said Jan Klaver, senior economist at the VNO employers' organization.

But having to bail out the euro zone periphery with loans and guarantees at a time of spending cuts at home grates on an already tetchy public.

"An objective analysis tells us that Europe has worked extremely well for the Netherlands, and the cost of preserving the euro has a very strong business case behind it. But a lot of people have lost confidence in the long-term ideal," Rinnooy Kan said.

Nevertheless, the latest opinion polls have two broadly pro-European parties in a dead heat going into the election: the Liberal Party of outgoing Prime Minister Mark Rutte and the Labour Party of Diederik Samsom.

On the face of it, their lead is hard to square with jaundiced attitudes on the street towards Europe. Adriaan Schout, deputy director of the Clingendael Institute, an international relations thinktank in The Hague, speaks of a Dutch-EU paradox.

"There's this impression that we're pro-European, but it depends on what you mean," Schout said. "It's so easy to see things in black and white, but it's more balanced than that."

Willemien, 77, a retired translator who lives in Amsterdam, typifies that ambivalence. On Wednesday she will cast her ballot for the Liberals, as she always has, but her support for the European project is hedged with qualifications.

She said it was too late for the Netherlands to leave the euro now, but that maybe it would make sense for the country to be in a smaller bloc of hardcore euro zone economies.

"I'm afraid Greece may be a bottomless pit. We cannot all let ourselves be dragged down to the bottom," she said.

And even among the hardcore, the Dutch should stand up for the national interest.

"It doesn't need to be that the Netherlands automatically follows what Germany and France think."

DEEP AND DANGEROUS WATERS

Analysts expect the Liberals and Labour will be able to form the core of a coalition that can deliver the fiscal discipline needed to meet EU targets, thus removing one of the uncertainties preoccupying investors.

Labour has gained ground at the expense of the harder-left Socialist Party, which, though more anti-austerity than explicitly anti-European, favors taking more time to reduce the budget deficit.

"Over the past 20 years, Europe has been for the biggest businesses and the financial markets, and not for the common people," Emile Roemer, the Socialist Party leader, said during a campaign appearance.

Until he fell flat in a series of televised debates, Roemer had been tapping into a fear of the future that is gripping voters across Europe as economic stagnation fosters a belief that an era of strong and steady growth could be over for good.

"People feel instinctively that we're running into deep and dangerous waters," Wim Kok, a former Labour prime minister, told Reuters.

YES, BUT...

So how will fervor for the single market, tinged by growing insecurity, translate into policy towards Europe after the election?

Many Dutch favor stronger supervision of banks and stricter fiscal discipline to prevent a repeat of the euro zone debt and banking crisis. The Netherlands was a driving force behind the idea of a powerful budget tsar in Brussels to crack the whip over slackers.

But they do not want European bureaucrats poking their noses into every nook and cranny of Dutch life.

"Brussels should not decide what goes into making Dutch polder cheese," said Jaap Paauwe, a professor of human resource studies at Tilburg University.

The Dutch have been critical of the EU on many issues down the years and are wary of too much power building up in any one set of hands, as the 2005 referendum demonstrated.

Clingendael's Schout said the Netherlands, like any other country, was keenly aware of its self interest. "We want to have deeper integration, but only if the rules are respected."

Because the Dutch are above all pragmatic, Schout said he was not worried about the capacity of politicians to hammer out a coalition platform on Europe after the election.

"We are still a consensual society. There is a great interest in cooperation - it's more or less in our genes."

Kok, the former prime minister, agreed that the Netherlands would not, in principle, stand in the way of giving Brussels more oversight over member states' economic and fiscal policy in order to strengthen the foundations of the single currency.

"There's a growing awareness of the fact that being a passenger on the euro ship means that you must give certain responsibilities to the captain and other officers of the ship," he said.

(Additional reporting by Thomas Escritt, Gilbert Kreijger and Sara Webb; Editing by Will Waterman)

Source: http://news.yahoo.com/analysis-post-election-dutch-may-awkward-eu-partners-132357109--business.html

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