Anti-EU, Anti-Brussels Sentiment Rises in Netherlands; Don't Expect Much From a "Merkollande" Summit

Emile Roeme, a socialist running on an anti-Brussels, anti-austerity plan is likely to become the next prime minister of the Netherlands.

On the extreme right, populist Geert Wilders wants the Netherlands to withdraw from the eurozone completely.

The centrists who support the nannyzone feel squeezed in the middle, and their days appear numbered.

In a case of Dutch Discontent, Socialists Ride Wave of Anti-EU Sentiment

The economy is in trouble and unemployment is rising -- in the Netherlands as in much of the rest of Europe. Ahead of upcoming elections, the Socialists are riding a wave of euro-skepticism and may emerge as the strongest political force in the country.

According to the polls, [Emile Roeme] the former elementary school teacher could become the next prime minister of the Netherlands.

'Over My Dead Body'

Roemer owes this popularity to his skepticism about Europe. "Having even more Brussels is not the solution to Europe's crisis," he says. The Socialist rails against the European Commission's austerity targets, under which the Netherlands is supposed to reduce its budget deficit to below the Maastricht Treaty ceiling of 3 percent of GDP by next year.

"Over my dead body," says Roemer, referring to the possibility of penalties being imposed by the European Commission. It is also a jibe at the German chancellor, who used similar language to express her views on introducing euro bonds. Too much power has been placed into the hands of uncontrollable technocrats, Roemer claims. "The economic policy Brussels wants to dictate to us is downright antisocial."

If Roemer prevails in the parliamentary election on Sept. 12, German Chancellor Angela Merkel will lose one of the few supporters of her Europe-wide austerity program. The Dutch have stood with the Germans when it comes to imposing strict conditions on countries like Greece.

Now the Socialist leader wants his fellow Dutchmen to vote in a referendum on the fiscal pact, one of Merkel's pet projects, which aims to impose budgetary discipline on the 25 signatory countries. The government in The Hague, which collapsed in April over a national austerity package, has not ratified the agreement yet.

One Fewer Gold Star

Right-wing populist Geert Wilders, who is known for his anti-Islam stance, is also fighting against Europe. He opposes the euro and wants the country to withdraw from the European Union. He even says that one of the 12 gold stars should be removed from the European flag if the Netherlands were to leave the EU.

The left and the right in the Netherlands are coming at the traditionally pro-European centrist politicians from both sides. "It's like a horseshoe," says a senior EU official, talking about his home country. "The extremes are almost touching each other." The center-right Christian Democratic Appeal party (CDA) and the center-left Labor Party are being overtaken by populists on the left and the right.

In a country that, like Germany, has particularly benefited from the common currency, champions of the euro have seen their numbers decline. "Some 60 to 70 percent of our income depends on exports to other European countries," says Mona Keijzer, a top Christian Democratic politician. But she too stresses that each country should address its own problems, and she roundly rejects any additional transfer of sovereignty to Europe. "We want to be a sovereign country," says Keijzer. "We are Dutch."

First Sarkozy, Now Merkollande

Former French president Nicolas Sarkozy and German chancellor Angela Merkel were uneasy allies in an effort to unite Europe. Sarkozy wanted eurobonds, an idea Merkel emphatically rejected at least 20 times.

Hollande has now replaced Sarkozy, and the alliance would appear to be even more tenuous. Not only does Hollande want eurobonds, he also wants to rework some of the austerity measures insisted upon by Merkel.

Thus it is amusing to see politicians who cannot see eye-to-eye on much of anything agree to work together on solution to eurozone crisis.

Germany and France have moved on Monday to bury months of squabbling over how to resolve the euro crisis by agreeing to form a joint policymaking body to create a more integrated economic and fiscal policy in the eurozone and structure a new banking supervision regime.

The German and French finance ministers, Wolfgang Sch�uble and Pierre Moscovici, said the aim of the new working group was to produce common policies on how to deal with Greece, Spain and Italy. as well as mapping out longer-term strategies. The Germans hope this will conclude in a full-scale political union within the eurozone.

Full-Scale Political Union? Really?

OK, Hollande wants to save the euro too. Lovely. However, he does not want to cede power to Brussels.

Consider this snip from the Wall Street Journal article France Shows Caution on EU Integration on July 8.

As they debate over the pace of future political integration, Mr.Hollande and Ms. Merkel are expected to spar over whether time has come to appoint a euro-zone budget czar. German officials have called for giving the European Commission more powers to police national budget, and make sure profligate nations don't put the currency union at risk any more.

France, fearing a loss of control over its national budget, has so far rejected that idea.

Instead, Mr. Hollande wants to boost the status of the leader of the Eurogroup, the informal forum where the leaders and finance ministers of the countries that use the euro currency meet.

How Long Can the Merkolande Alliance Last?

My guess is not long given radically different viewpoints on how to get there from here.

United States of Merkel

Let's recap what I said yesterday, in Merkel Pushes Convention to Draft New EU Treaty; United States of Merkel?

Do the German people want a centralized authority over budgets led by bureaucrats in Brussels or is is it primarily Merkel?

I suggest the latter. Merkel wants as her legacy a United States of Merkel (which I define as a United States of Europe in which she gets primary credit for building). She does not care what it costs Germany as long as it gets her in the history books forever and a day.

Numerous Problems

The problems should be obvious. Many countries, especially the club-med states, do not want austerity or loss of sovereignty. They want printing.

Also note that Holllande wants to continue his tax the rich policies while lowering the retirement age and preventing businesses from firing workers.

Will Hollande's ideas work in a United States of Merkel?

Let's assume they will work. Indeed that should be Germany's big fear. Put a bunch of nannycrats together and they are likely to decide anything. And whatever rules they decide will apply to every country in the nannyzone that foolishly signs the treaty.

If the treaty is a simple majority rule treaty, Germany would be at risk of being overruled by the club-med states. If  the treaty is by percentages, the club-med states would be at risk of being dominated by what is good for Germany and France (assuming of course Germany and France can agree).

Do-or-Die Political Expediency

Finally, politicians might want a nannyzone, but citizens of many countries would not, and I strongly suspect that includes Germany.

Recall that France and Germany pushed through a treaty in December (still not ratified). Also recall that Hollande ran on a platform of renegotiating the treaty.

Germany and France are still bickering. How's that supposed to work? Does Merkel think an agreement now is likely?

I think not. Instead, her proposal is simply a matter of do-or-die political expediency and her one last chance to push for the United States of Merkel.

Don't Expect Much (Except Bickering) From a "Merkollande"Summit

While Hollande is skeptical at best, the Netherlands is downright anti-Brussels belligerent.

So please tell me again how the Merkolande summit is supposed to work given the Netherlands, Germany, and France still not have ratified the last one, and numerous countries do not want to create a United States of Merkel led by nannycrats with budgetary veto powers.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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