Yesterday, the
Dutch newspaper Volkskrant published a peculiar story about an event that allegedly
happened in June, 2012: Dutch Prime Minister Mark Rutte threatened that The Netherlands would leave
the Euro-zone if Chairman of the European Council, Herman van Rompuy, would
not put a halt to his blueprint plans for the European transfer union.
Here are the
pertinent snips:
The resistance of Dutch PM Mark Rutte against further
European unification had been more fiercely, than the general public was aware of. In a
conversation with EU-president Herman Van Rompuy in 2012, Rutte threatened to
leave the Euro-zone if Van Rompuy would stick with his blueprint plans for it, according
to various insiders in the matter.
No other government leader ever put the Euro-membership of his
country on the line, according to Van Rompuy in an interview with De
Volkskrant. He was ‘puzzled’ about the stance of Rutte. Other persons present
at the meeting were completely flabbergasted.
In public, the Dutch prime minister had
advocated the economic importance of the euro, in reaction to the public call
of Geert Wilders’ Party for Freedom
(i.e. PVV), to let The Netherlands immediately leave the Euro-zone and the EU.
PM Rutte reacts on his behalf that a threat to abolish
the euro was never under discussion. Rutte did made clear to Van Rompuy,
however, ‘in very firm and unambiguous words’, that he would shipwreck the plans
of the latter with a veto, when necessary.
Partially due to the
resistance of The Netherlands, the reform contracts between Brussels and the
national capitals have not yet been realized. The government leaders will
further discuss those in October of this year.
The exchange of words between Rutte and Van Rompuy
took place in Het Catshuis [the official, ceremonial domicile of the Prime
Minister in The Netherlands - EL] on 5 June 2012. Van Rompuy stated that he moved on, since this remarkable event between him and the PM.
The anger of Rutte
was triggered by Van Rompuy’s idea that member states would enter into firm
agreements (contracts) with Brussels, about necessary economic reforms.
Countries, which would meet their obligations, would be rewarded. Rutte was very
much opposed against this overture towards – what he called – a ‘transfer union’.
Van Rompuy’s ideas were part of the blueprint for the
future of Europe, which he wrote at special request of the government leaders.
[For more extensive info about
these chaotic days, please refer
to this contemporary article –EL]
The outburst of Rutte is explained by others, who were present
at the meeting, as ‘election fever’. Only three months later, there would be
parliamentary elections in The Netherlands and Europe – more precisely the financial support for Greece – played an
important role in the campaign. Rutte felt being reeled in by the ‘tractor beam’ of Geert Wilders and his populist Party for Freedom, according to one of the
table-companions.
And that’s that…
“ It was a one-off event. In those days, Rutte was
stuck between a rock and a hard place. Both parties Rutte and Van Rompuy had it out and now they can
laugh about it. Let’s move on past this”.
That would be the
most logical reaction to this event, wouldn’t it?
Still, I want to
think about the implications of what happened in those days.
First, the fact
that Rutte did not categorically deny this event yesterday and stated that Van
Rompuy had not told the truth about his threat, and the fact that it has been
confirmed by others present at the meeting, tells me that it may indeed have happened
exactly as Van Rompuy stated.
Second, the
implications of this very event could have been far stretching, would chairman Mario
Draghi of the ECB not have stepped in on the 26th of June 2012, with his famous
‘ I will do whatever it takes…’ speech. In those days, the financial/economic situation in the
Euro-zone was explosive, to tell the least, and the world might never know how
close a financial meltdown in the Euro-zone had come then.
Now, I want to further dig out these points.
This threat may
indeed have happened
For me personally,
the first point is very serious and not just a simple question of poor judgment
by PM Mark Rutte.
I do understand
that Rutte was struck by ‘election fever’ in those days and that he felt that Wilders – with his
anti-European stance – was standing
behind him to tackle him and his liberal-conservative VVD-party, if Rutte would
have given in too much to Van Rompuy.
Nevertheless, Rutte’s
threat to leave the Euro-zone was an unprecedented move in a time of great pan-European tensions.
It was also a clear case of confusing one’s
personal interests and frustations with the interests of the whole country:
leaving the Euro-zone would have had enormous financial and economic
implications for The Netherlands itself, irrespective of the fact whether people
were in favour of it or against it.
As an event, it
speaks volumes of PM Mark Rutte’s blatant incompetence and his destructive stance,
in those days, caused by the fact that he neither had a firm vision and
ideas upon the future of The Netherlands, nor the backbone to stand tall for
it.
So, it could happen
that PM Mark Rutte made a threat out of personal frustration and electoral fear for Geert Wilders, which would have
cost The Netherlands dearly when it would indeed have been effectuated.
The
implications could have been far stretching
One should not
forget that this event took place in a time, when the Euro-zone stood seemingly
at the brink of a financial meltdown.
In 2011 and the first half of 2012, the Greek crisis
and the financial/economic events in the other PIIGS-countries turned from bad
to worse, as the international financial markets had been continuously challenging the toughness
and – ultimately – the viability of the Euro-zone as a whole.
Besides that, the Euro-zone
seemed struck by blatant indecisiveness and by mounting tensions between the ‘fiscally
sound’ net-exporters from the North and the ‘spending-happy’ net-importers in
the South (the PIIGS, i.e. Portugal, Ireland, Italy, Greece and Spain) of the
Euro-zone.
The member-states of the EU behaved as the proverbial ‘28 frogs in a wheel-barrow’
and a total implosion of the Euro-zone and perhaps the whole EU seemed nigh.
So when President
of the European Council Van Rompuy ran the gauntlet and took the unrewarding
task in hands to deploy his blueprint
for the transfer union (see both red and bold texts), this was not ‘just another attempt’ to attract more sovereign power to Brussels,
away from the capitals of the member states.
No, it was nothing less than an
attempt to rescue the Euro-zone and consequently, the whole European Union itself.
And personally, I
think that this ‘despised’ transfer union – in spite of the fact that it would take ‘power of
decision’ and sovereignty away from the sovereign states, and would bring it towards
the Brussels’ bureaucrats – was a good
idea, of which it is a shame that it has not been realized yet.
Currently, we
are still in the situation that all political steps of the European Council and
the Euro-zone member states have generally been ‘too little too late’. This left the Euro-zone to be still utterly dependent on the credibility of Mario Draghi, in
his role as ECB chairman and financial conscience of the Euro-zone.
With that
background in mind, the whole situation described in De Volkskrant speaks
volumes of Rutte’s bluntness and inadequateness for his current job, in my
humble opinion.
Fortunately, Mario
Draghi did come to the rescue on 26 June 2012, and he held his
famous, life-saving speech:
"Within our mandate, the ECB is ready to do
whatever it takes to preserve the euro. And believe me, it will be
enough," .
"To the extent that the size of the sovereign
premia (borrowing costs) hamper the functioning of the monetary policy
transmission channels, they come within our mandate."
Perhaps, Mario
Draghi should be honoured as the man who ultimately rescued the whole European
Union and perhaps Mark Rutte should be taunted as the man, who almost blew it
to smithereens.
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