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Tuesday, 20 September 2011

An SMS from Ernst (15): Short Messages Services

The Netherlands – Romania 1-1

Dutch Minister for Integration and Asylum, Gerd Leers had an unpleasant message for Romania and Bulgaria, the two latest members of the European Union.

In spite of the fact that the European Commission is in favor of receiving both countries in the Schengen-zone, Minister Gerd Leers wants to veto this decision. His statement is: ‘both countries didn’t do enough to fight corruption and criminality. Therefore we won’t allow citizens from these countries to travel freely through the Schengen zone.’

Leers’ veto is – without a doubt – fueled by the silent partner of the Dutch government, the PVV (‘Party for Freedom’) of Geert Wilders. Geert Wilders is against Europe and the European Union. He is also against the open borders that Schengen advocates and very much against further expansion of the European Union.

The PVV is officially not a party in the Dutch minority government, but unofficially it holds a pivotal position in it. Geert Wilders can decide if the current cabinet Mark Rutte I will stay or go, by adding of withdrawing his support for the total policy of this minority cabinet.

And Romania an Bulgaria? Both countries were not amused by the intended Dutch veto. And Romania decided not to wait for the outcome, but to take some measures.

The Dutch newspaper De Telegraaf writes the following news story on Romania, of which I show the pertinent snips:

Romanians stop fifteen trucks with Dutch flowers (link in Dutch)
The Romanian authorities have stopped fifteen trucks with flowers, since last Friday (September 16). ‘Most trucks were from The Netherlands’, according to a spokesman of the Romanian Internal Revenue Service ANAF on Monday.
This weekend, the news was published that Romania halted imports of Dutch flowers, bulbs and seeds, due to a suspicion that the truckloads were contaminated with bacteria.
Samples of flowers and seeds were taken from ten trucks, two trucks were confisquated and three trucks were sent back to The Netherlands.
The Dutch embassy asked the Romanian authorities why these measures were taken. “Dutch companies that export to Romania expressed their concerns to the Dutch embassy and the authorities in The Hague’, according to the embassy.”

‘Welcome to the European Union 2012, Minister Gerd Leers! If you expected that the Romanians would accept without a fight, that you screwed them on the Schengen-zone: well, they didn’t’.

And of course, Dutch companies and the Dutch government cried blue murder on these unreliable Romanians and they even might see this as a confirmation of the correctness of their judgment, that these countries don’t belong in the EU.

But, what goes around, comes around. That has been an important lesson for Minister Gerd Leers and his veto. To be clear: I don’t approve of these kind of actions, but I understand them fully. 

Modern slavery in The Netherlands
That not everything is well in The Netherlands as well, proves the story on a Dutch female vegetable grower that was accused of executing the practice of ‘modern slavery’.

Her vegetable-growing farm, specialized in growing asparagus, was situated in a very isolated spot in the province of Brabant. It was mainly run by Polish and Portuguese personnel, under extremely poor working and living circumstances.

The people:
  • had their passports taken away from them;
  • worked for 7 days a week and much more than 8 hours per day;
  • encountered physical violence and threats from the owner or her straw men;
  • were stored in very small multi-person bedrooms, without proper kitchen and hygienic facilities;
  • were charged more than €50 per person per week for these facilities;
  • didn’t get proper nutrition;
  • were fobbed off with petty advances on their salary, while being promised that their real salary would be paid very soon;
  • The lady used a Polish straw man to keep the Polish personnel on the job and to suppress resistance;
  • that didn’t want to work, lost the job and the money they already earned;
  • that wanted to leave the farm, lost the job and the money they already earned;
Some months ago, the story was over. The police arrested the lady and she was send to prison in expectance of her trial. The Polish personnel, that now needed shelter, was temporarily stationed at the house of a labor union representative.

The labor inspection already sentenced her to a penalty of €1,100,000 on ‘extortion claims’ and she was forced to pay all due salaries to her Polish personnel. As a consequence, her company was bankrupted and the lady had to sell her farm.
Currently, her case is at the criminal court, where further penalties and even imprisonment might be expected.

The aforementioned labor union representative was interviewed by Business News Radio (, this morning. He replied when asked, if this farmer was a ‘bad apple’ when it came to personnel treatment: “This lady was definitely not the only farmer that treated her personnel like this”.

That is good to know, when the Dutch government and Dutch companies play the blame-game towards other countries.


The new pension agreement: the surgery was succesful, but the patient died.

A few months ago, on June 13, I wrote an article on the new pension agreement for The Netherlands, followed by an article (July 6) on the role of the labor unions in creating this pension agreement.

At that time, the pension agreement was still not approved by the largest labor union federation, FNV.

The approval process was long and painful for the FNV, as the two largest labor unions FNV Bondgenoten (general labor union for the manufacturing and trade industry) and ABVA-KABO (labor union for civil servants) maintained their ‘nyet’ to this agreement. 

Eventually, the ´nyet, unless…´ of the labor union for Building & Construction personnel turned into a paltry ‘yes’. This gave the federation council the needed majority vote, albeit a small one. Therefore yesterday, the federation council of FNV approved of the new pension agreement,  after some weeks of heavy and sometimes even hostile negotiations with the ‘rogue unions’ within the FNV.

This approval took place in a final meeting with Minister of Social Affairs, Henk Kamp and the representatives of the employers federations MKB Nederland ( Small and Medium Enterprise) and VNO/NCW (large companies).

For chairman Agnes Jongerius of FNV, however, it was a pyrrhic victory: both rogue unions explained that her position as chairman came under jeopardy, due to this process. And as both unions represent a total of 60% in the FNV membership base, the chance that Jongerius might make it to the winter are extremely slim.



More misery from the pension industry. The Dutch financial newspaper Het Financieele Dagblad writes on the deteriorating capital positions of the Dutch pension funds. Here are the pertinent snips:

The capital position of Dutch pension funds is increasingly deteriorating. The coverage ratio (invested capital vs future obligations) of the average fund sank to a new low.
The pension thermometer of consultancy bureau Aon Hewitt stood last Monday at the lowest point of this year, namely on a coverage ratio of 97% for the average pension fund. This is far below the 105%, that is demanded by De Nederlandsche Bank (Dutch national bank).
According to actuary Dennis van Ek of consultancy bureau Mercer, the average coverage ratio of the Dutch funds sank even to 93% on Tuesday. The drop is mainly caused by the long swap interest dropping to 2.8% from 3.9% in June. This interest is used by the pension funds to calculate the current value of their future obligations. This swap interest made the coverage ratio sink by 11%.
However, not only the interest plays a negative role. Also the slow implosion at the stock exchanges by 20%, influenced the coverage ratio negatively by another 6%, making the total drop 17% since June, according to Van Ek.

Pension funds are hit by a perfect storm, currently, that causes their capital positions to evaporate. The double whammy of low interest rates (which makes future obligations expensive) and low yields on stocks and safe sovereign bonds, combined with the Greek drama, kills their earnings.

This desperate financial situation for the pension funds can make it all too attractive to make risky investments after the implementation of the new pension agreement. In this new agreement, pension funds are allowed to calculate their obligations, using forecasted future yields of investments. The riskier the investments, the higher the forecasted future yields. This is a perverse stimulation for high-risk investments that might go awry in the future.

Greek debt drama

Just like a true Greek drama, the Greek debt drama continues… and continues… and continues… And how it will end? Nobody knows!

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