Europe in the news, Euroscepticism, Future of the EU, Public opinion, the Netherlands

The EU’s Budget Negotiations and the Dutch Government: A Commentary

The Dutch government’s mission for last week’s budget negotiations, which had to be secured by Prime Minister Rutte, was three-fold: First, to maintain the 1 billion euro rebate on The Netherlands’ contribution to the EU. Second, to lower total EU spending. This goal might have seemed ambitious, given that new EU budgets had always been higher than the previous one, and given that the European Commission had asked for and increase of 5,5 per cent compared to the old 2007-2013 budget.

Third, Rutte’s goal was to modernize the budget in order to create more financial room for investing in the EU’s earning capacity, in areas such as research, innovation, transport, energy and digital networks.

While the latter goal is the most substantive in nature, the first two are highly political: Rutte seemed to be particularly keen on being able to demonstrate that he could succeed in making Brussels “give in and give up”, and to show that he could come home with spoils of some sort for the national electorate.

The first of these goals has been achieved: Rutte managed to maintain the Dutch rebate. The second goal was also successfully negotiated: for the first time in the history of the EU the budget has been pushed down. This makes The Netherlands part of the winning team in last Friday’s decision making process, together with Britain, Germany, Sweden and the other net-contributors.

By contrast, Rutte was not successful in securing a more modern EU budget: spending on Competitiveness for Growth may increase by 40 per cent to more than 125 billion euro, it still remains a very modest part of the total budget (12,6 per cent compared to 32,6 per cent for regional development and 37,4 per cent for agriculture).

So it can be concluded that Rutte has succeeded politically but lost in more substantive terms. In his first response to the press, Rutte stated: “Of course it is not possible to get everything you want when you negotiate with 27 member states. But we keep our rebate, for which we fought hard, and the total budget will be smaller. That’s appropriate, because all member states have to cut their spending”.

What Rutte does not mention is that since the last budget was made, the member states have asked the EU to do more, for instance in the field of regulating the financial services and national budgets, foreign policy and fighting cross border crime. The EU institutions will have to perform these additional tasks with fewer funds. For The Netherlands, there is a clear analogy with what the present central government demands from local authorities: policy decentralization has been paired with budget cuts for municipalities.

Another part of the budget that pleased the Dutch government is the demand for all EU institutions to cut down 5 per cent of their staff in the next years. Those EU-civil servants that remain will have to work longer hours without additional compensation and will face a salary cut of 6 per cent, seen as a “token of solidarity” with indebted EU member states. This measure tallies nicely with the recurrent debate on public sector rewards in The Netherlands. Just last week, there was outrage in Dutch newspapers and TV shows in response to the news that more than 3000 EU civil servants enjoy a higher salary than the Dutch prime minister himself.

The failure to truly modernize the EU’s budget is seen by many as a missed opportunity to use the budget negotiations as stating an ambition for Europe, rather than underlining the popular perception that EU budgets are more about finding a “gloomy compromise between political opportunism and subsidy addiction” as the Dutch Commissioner Neelie Kroes for Europe’s Digital Agenda called the budget agreement in the papers.

In sum, Rutte succeeded in achieving the two political goals that prevent him from losing political prestige domestically, but he failed to triumph in terms of creating more common added value for Europe, by moving away from the old economy and embrace the new economy. This can be taken as an indication of Europe’s long road ahead, both in terms of economic recovery and in terms of increasing multi-level political legitimacy.

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