KYRAN FITZGERALD: Why the Dutch may be the new Brits

In its search for a new post-Brexit friendly EU neighbour, Ireland could do worse than look to the Netherlands, with both having much in common in a changing EU, writes Kyran Fitzgerald

The Netherlands — roughly the size of Munster — is now the world's 18th-largest economy. Picture: PA

Britain is headed out the EU door and Ireland is on the lookout for new EU-based allies to take its place.

We could usefully start with the Dutch.

Of modest size, the country punches above its weight in the councils of Europe.

No one can question its commitment to the idea of European unity but, increasingly, its leadership is displaying a scepticism about the intentions of leaders such as France’s President Macron, to push forward with a centralising vision for the EU.

The Dutch have found themselves lined up — along with the Irish and Luxembourgers — on the naughty step regarding tax arrangements with major US companies.

While the Dutch people know only too well what can happen when European nations are allowed to drift apart, they are, in their very essence, a pragmatic trading people who have literally had to carve much of their country out of the sea.

In 1953, more than 1,800 people died when the sea dykes broke during a great flood.

Such events have helped to foster a very grounded approach to nation building.

By way of contrast, continental European bureaucrats can often act rigidly in their relationships, both internal and external.

Much of the recent growth in populism at nation state level can be traced to this top-down thinking.

This is not the Dutch way. 

Some of the most interesting commentary on the future of the EU has been provided by Jeroen Dijsselbloem, the former Dutch finance minister who stood down recently as president of the influential Eurogroup gathering of EU finance ministers.

He argues that the EU has, in effect, been suffering from a form of post-traumatic syndrome following the economic crash and ensuing eurozone sovereign debt crisis.

As a result, the EU has “failed to deliver on its main tasks in recent years”.

Too many projects have been left unfinished.

“We expanded the EU without strengthening it,” he said.

In his view, the EU’s leaders should concentrate on a limited number of key projects, rather than on pursuing a grand centralising vision which lacks the backing of the voters at national level.

He concedes that multinationals bear their fair share of the tax burden, given that they profit from a well functioning education and justice system, and he strongly endorses the shift from banking bailout to bail-ins where investors carry the burden of a bank failure.

Those losing out in the globalisation process must be provided with social supports, while tax systems must be reformed so as to reduce the burden on workers.

Above all, he insists, “the worst response would be to repeat the old answer of further and deeper [European] integration.

“We risk weakening the whole construct by making big leaps into the dark.”

Mr Djisselbloem has stepped back from politics.

His brand of social democracy is currently out of fashion, but his views would be widely shared both on the street and in the boardrooms, where there is a weariness with the rigid approaches that had led the EU into crisis.

As the EU recovers, one can only hope that political pragmatism will make a comeback.

The Irish and Dutch, each with their own particular concerns and heritage, now find themselves with much in common.

Our two main party leaders would both find themselves at home in the Hague, where grand visions are politely scoffed at.

The Dutch were early runners in the race towards reconciliation with neighbours.

The Second World War had yet to end when the Benelux economic union between Holland, Belgium, and Luxembourg was established in 1944 and this group combined with the French and Germans in 1951 to form the European Coal and Steel Community — the forerunner of the EEC.

Natural gas gushed from 1959 onwards, helping to make the Netherlands a wealthy nation, complete with a Rolls Royce welfare system, but by the early 1980s the country was in big trouble.

Its unearned wealth had made its industries and wider economy uncompetitive.

Lessons were learned. A new young prime minister, Ruud Lubbers, introduced tough reforms which eventually pushed the budget into balance and paved the way for a recovery. A new pragmatism was evident.

The Dutch held onto their social partnership model, but with a strong dash of liberal economics thrown in. Then Mr Lubbers hit it off with Margaret Thatcher.

Both were strong backers of the Single European Market, a fact that most Tories these days conveniently forget.

Mr Lubbers was, however, a true believer when it came to the wider European project.

He served as honest broker for the Maastricht Treaty, which paved the way for the euro. At the same time, he negotiated a UK opt-out from the euro and the EU Social Chapter.

He would later regret his role in the establishment of a European currency which has done more, ultimately, to divide than to unite.

Over time, the Dutch replaced their energy-based wealth with a wave of foreign direct investment which helps underpin their current prosperity.

The Netherlands — roughly the size of Munster — is now the world’s 18th- largest economy, with a gross national income in excess of $850bn (€690bn).

The country offers generous incentives, but relies less than we do on tax packages as a means of wooing overseas firms.

Geographically, the Netherlands is both highly vulnerable — as much of it lies below sea level — and yet has also been uniquely well-placed to take advantage of periods of peace and prosperity.

Europe’s largest port is in Rotterdam, while Amsterdam’s Schiphol is one of its leading airports.

According to the US State Department, the Netherlands is “the largest historical recipient of direct investment from the US”, accounting for 8% of foreign direct investment (FDI) into Europe.

The Dutch tradition of commerce dates back to the country’s 17th century heyday.

After a long hiatus, Holland was late arriving to the 19th century industrialisation party.

However, in the 20th century, the Dutch developed a strong domestic base in agriculture, industry, and commerce.

Companies such as Philips, Royal Dutch Shell, Unilever, and Ahold have become global corporations.

Rather more than a worryingly insular Britain, the country looks set to capitalise on the latest wave of global transformation.

It is already reorienting its economy in the wake of the Brexit vote.




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