Coronabond debate opens old wounds, Dutch accused of lack of solidarity
The Dutch government has been criticised by
domestic politicians, MEPs, and Italian mayors and officials for its tough line
on EU measures to support countries hard hit by the coronacrisis, and for
showing a lack of solidarity to its fellow EU countries.
A group of
Italian mayors, regional governors and one MEP even bought a page in German
paper Frankfurter Allgemeine Zeitung to outline their position and criticise
the lack of support from the Netherlands. In the letter, they accuse the
Netherlands of not being ethical or showing solidarity with the rest of Europe
in its approach to the crisis and urging Germany to take the ‘right steps’ and
support southern European countries.The Netherlands and Germany have been
acting together to head off calls for the introduction of ‘coronabonds’ to help
pay for the crisis.
addition, a number of MEPs from the Renew Europe group have written a direct
appeal to Dutch prime minister Mark Rutte, describing comments made by Hoekstra
last week as ‘insensitive’ and ‘unacceptable’, although the status of the
letter is unclear.
Hoekstra said in a briefing to Dutch MPs last
week that issuing coronabonds would be a ‘moral hazard’ and called on the EU to
‘investigate countries which say they have no budgetary margin to deal with the
effects of the crisis…. even though the eurozone has grown for seven
consecutive years’. The day he made the statement, 743 people died in Italy of
again lay bare the different approach of the Netherlands, and its ‘frugal’
partners, to tackling the current problem.
Never,’ said Rutte last week, while on a conference call with the other 26
heads of state and president of the European Commission Ursula von der Leyen
and this is not the first time the Dutch have shot down the financial
instrument in their typically direct way. Italian prime minister Giuseppe Conte
first urged the EU to consider the idea of issuing joint debt to help Europe’s
economy recover from the financial crisis nearly two weeks ago. ‘If we proceed
divided we are all weaker,’ he said on a conference call on March 17 with other
EU leaders, asking for special bonds, nicknamed coronabonds, to support public
the so-called ‘frugal’ countries of the Netherlands, Germany, Austria and
Finland have repeatedly rejected the idea. ‘The advantage is that all countries
will pay the same interest on the bonds. This is slightly cheaper for the south
and slightly more expensive for the north,’ says Catherine de Vries, a
professor of political economy at the Vrije Universiteit in a column in the
Financieele Dagblad on Tuesday.
Five days after Conte called for solidarity,
some 400 academics wrote an open letter to the European central bank and
published in the Financial Times, asking for coronabonds.
economics minister Peter Altmaie dismissed the call. ‘The debate about
eurobonds is a phantom debate.’ The next day, on March 24, Dutch finance
minister Wopke Hoekstra dropped what some say was his unsympathetic clanger,
calling for an investigation into southern EU state finances. Italy and Spain
were also hardest hit during the 2007 financial crisis. On March 25, the call
for coronabonds went beyond Italy when nine countries – Belgium, France, Italy,
Luxembourg, Spain, Portugal, Greece, Slovenia and Ireland – sent a letter to
President of the EU Council, Charles Michel.
‘We need to
work on a common debt instrument issued by a European institution to raise
funds on the market on the same basis and to the benefits of all member states,
thus ensuring stable long-term financing for the policies required to counter
the damages caused by this pandemic,’ the letter said.
leading German economists call for €1 trillion of European crisis bonds Nevertheless,
on the same day that Commission president Von der Leyen rebuked member states
for ‘looking out for themselves’, the Netherlands and Germany blocked a
coronabonds proposal after Rutte declared they would never happen. ‘I cannot
foresee any circumstances in which the Netherlands will accept eurobonds,’
Rutte said after the meeting.
There is, however, at least one Dutchman who
is receptive to the idea of a coronabond, central bank president Klaas Knot.
‘This is a test for the eurozone. When you see what is happening with the
corona virus in countries such as Italy and Spain, I think the call for
solidarity is extremely logical, Knot said in an interview with the NRC. ‘How
you implement this solidarity is a political decision. Coronabonds are one
Divisions are also emerging in domestic
politics. D66 leader Rob Jetten praised the interview with Knot on Twitter,
stating that ‘now jobs and incomes throughout Europe are in trouble… we must
not let our friends drown. We will only get out of this together.’
‘t Veld, an MEP for D66, told Politico.eu that aid the government’s ‘attitude
and tone were so inappropriate and so blunt, and I do not think you need to be
a northerner or southerner to feel that.’
And on Monday night, ChristenUnie leader
Gert-Jan Segers told television programme Op1: ‘There must now be a new
Marshall Plan for southern Europe, which is now so ravaged.’ According to
Politico, Dutch diplomats have spent recent days trying to calm their their EU partners,
arguing in particular that Hoekstra had not intended to point fingers at any
particular countries. But Rutte and Hoekstra, Politico states, have shown no
signs of backing down.
Dutch ‘no’ on corona
bonds undermines European project
Working together is
not just the right thing to do. It’s in everyone’s best self-interest