Dutch economists & ex-ministers: Brexit so disastrous that Dutch government should campaign against it

Netherlands’ Prime Minister Mark Rutte discusses the UK’s negotiations over EU membership with David Cameron

Two prominent economists who also were Dutch ministers and still are influential “public thinkers” about macro-economic, budgetary and fiscal affairs, have come out in their weekly column for a strong Dutch government involvement in the campaign against Brexit.

write in their Sunday column (15th November 2015) in the biggest Dutch newspaper The Telegraaf, that the OECD may predict a sunny future for the Netherlands, but that uncertainties like the slump of China and others Emerging Economies (see: The Economist) can scupper those rosy predictions.

But a second danger looms on the horizon: a Brexit can also harm the economic and political interests of the Netherlands. Vermeend and Van der Ploeg point out that with a Brexit

  • an average British household stands to lose between 1200 and 3500 Pound a year;
  • the EU stands to lose 17% of its collective Bruto Interior Product, and 25% of its Defense expenditure; just when the EU enters a “Great Game” over Ukraine, the Crimea, Moldova, Hungary, Greece, Georgia, etcetera;
  • both the British and European/continental economy will be hit hard (important think tanks predict havoc for the British economic life and relations);
  • the Netherlands risks losing its second biggest trade partner (after Germany); we export for billions of euro’s to you, and 300.000 Dutch jobs are dependent on that (the Dutch government really struggles to get unemployment down as it is), and
  • Dutch companies invest to the tune of 180 billion euro’s in the British economy; that is bound to fall off when you slam the door on the continental EU, and parts of the City move to continental capitals and/or Frankfurt am Main (or independent Edinburgh?);
  • The Netherlands fought hard in the ‘60’s to get Britain in the EEC, as a counterweight to the continental giants France and Germany (we share a more maritime trading tradition); if London leaves, we’re back at the mercy of Berlin and its French sidecar.
  • Politically, Britain and the Netherlands share a sober, pragmatic outlook on how the EU should function, and distrust French grandiloquent but old-fashioned projects and proposals (political influence on central banks); and distrust the French and German love for the Common Agricultural Policy as a fountain of subsidies to big landowners instead of struggling British dairy farmers. When the crofters and gentry farmers disappear from the EU policy tables, the wily olive oil farmers and inefficient, rowdy French farmers will regain the dominance they had up to 1972. And British farmers will be even more at the mercy of the four big supermarket chains; no more protection by EU competition or market rules!
  • The Dutch, who alone amongst the Six stood up to De Gaulle over Britains entry, and who depend so strongly on our ties with you, will feel especially spurned and aggrieved if London leaves under UKIP’s banner (or: banter). And you will need our waterworks experts (dredging! dikes!) with increasing British flooding, to give just one example. The only non-Asian expert center on Indonesia, the biggest, strategically located muslim nation, where Cameron tries to get a foothold, is in the Netherlands (Indonesian students come here to study their Adat laws; and our navy and multinationals like Shell still have close ties!).

Vermeend and Van der Ploeg point out that the Dutch adage: “European if necessary, national if possible” resonates powerfully in how British policymakers see and use the EU; London will lose that “Glorious Revolution”-alliance if it excludes itself from EU policymaking, but still will have to follow each twist and turn of the EU Common Market’s regulation. The Swiss and Norwegians rue that they ever accepted that servitude…

Cameron is fearful of the EMU countries ganging up on poor Britain; if London walks out of the EU, the EMU member governments won’t cut Britain any slack in how they run that recovering economic and monetary bloc on the continent! And anyway: an exit procedure will entail years of renegotiating economic and financial relations with the continent; and continental EU governments, spurned by “those pesky Brits”, will be in no mood to pay heed to British concerns about those new relations.

* Dr. Bernard Aris is a historian, a D66 parliamentary researcher and a LibDem supporting member.

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  • Here’s a hint: if you want to increase the vote for ‘leave’, try telling people they should stay for the good of foreign countries like the Netherlands.

  • Steve Coltman 25th Nov '15 - 5:15pm

    This post contains a lot of nonsense. There seems to be an assumption that, if the UK left the EU, all trade across the Channel and North Sea would instantly cease! No, the worst-case scenario, if you can call it that, is that we would trade with EU countries on the same basis as we trade with the rest of the world, i.e. there would be a few % import duties payable. This is how it is with our single biggest trading partner, the USA. That is how it is with all the 64% of our non-EU trade. We trade quite profitably with the rest of the world BTW, it generates a £20bn annual trade surplus whereas our 36% with the EU is in a £60bn a year trade deficit.
    The EU would ‘lose 25% of its Defense expenditure’ – no again, it’s not the EU’s defence expenditure in the first place – if anything its NATO’s. This is a very revealing point – one of the reasons to leave is because of the ambitions of Brussels to become a United States of Europe and gradually take control of its member countries defence budgets. There is an embryonic European defence ministry already.
    I can believe that the UK’s leaving will alter the political balance within the residual EU but that’s not our problem. I can believe there will be ill-feeling towards the UK but if Brussels was not so ambitious and dishonest, if there was no ‘ever closer union’, rather a Confederation of Nation States instead, there would be no great reason to leave in the first place.
    I don’t believe the UK leaving the EU would be painless but I don’t think it would be the end of the world either, trade would continue much as before but for the UK, Ever Closer Union would be dead.

  • @Dav: let’s assume for a second that you are right and the vote is to leave.

    How do you expect to get a free trade deal with the EU if the remaining countries are feeling “spurned and aggrieved”?

    Come to that, how would you propose to soothe the feelings of the large number of people (40% at least) who will have voted to stay in? How do you reconcile them to the sepia – toned 1950s theme – park that you seem to want the country to become? There’s going to be riots when you try telling people that there’s no internet, only two channels of monochrome TV, and no live premier league.

    And what are you going to do when large numbers of well – paid, semi / unskilled jobs fail to appear by magic, and in fact these jobs become even more squeezed – “refrigerators will order groceries, robots will have them collected and drones will deliver them to your door, eliminating the need for grocery clerks and delivery drivers.” ( see http://www.gartner.com/newsroom/id/2866617 ).

    I’ve said it before, I’ll say it again – this country doesn’t need Brexit. It needs better education.

    And the out camp need to join the modern world not try running away from it.

  • Little Jackie Paper 25th Nov '15 - 6:46pm

    JUF – I agree with, ‘How do you expect to get a free trade deal with the EU if the remaining countries are feeling “spurned and aggrieved”?’ Looking at how Greece went it’s pretty clear that the EU will look to discourage anyone else from an exit. The prospect of a ricochet from a UK exit is probably something that does worry the EU and for that reason alone I guess that Britain would probably be in a pretty weak position to negotiate from. My instinct is that some sort of unsatisfactory Switzerland/Norway arrangement would be the most likely outcome – accepting all the rules and likely free movement with less influence.

    That said, this seems glib, ‘this country doesn’t need Brexit. It needs better education.’ A big part of the problem in recent years across the world has been the devaluation of education and, significantly, the devaluation of labour. There is an entirely good argument that the UK should look for a more, ‘closed,’ or, ‘managed,’ outlook within the EU. That won’t be easy of course. But some pro-EU people might do very well to reflect that if we had a truly reciprocal union then flows of people, as distinct from capital, would be far more balanced than they have been over the past 10 years.

  • jedibeeftrix 25th Nov '15 - 7:03pm

    the dutch have every incentive then to campaign for an EU that britain can remain within. go get ’em tiger…!

  • Peter Hayes 25th Nov '15 - 9:36pm

    How will the fishing in the North Sea work if we leave. Will we be banned from fishing in the Eastern North Sea until an agreement is made or will we just carry on with the EU fishing agreement, the Dutch and British should say.

  • @Jedibeeftrix – I would put it slightly differently…
    From several decades of experience of working with the Dutch (and other Europeans), I’ve found them to be excellent intermediaries, Time and time again within pan-European organisations, I’ve found that having convinced members of the Dutch company of the validity of my plans they have taken them to Paris and achieved what was impossible for me, a representative of the English company, to achieve…

    So I would say, support the Dutch and help them in their campaign, as there is a good chance we might get an EU that Britain can be proud to be a member of. Only proviso, just accept that once you hand over materials to the Dutch they become Dutch idea’s etc. and so keep quiet about their actual source and complement the Dutch on their proposals.

  • Ed Shepherd 26th Nov '15 - 7:18am

    Reminds me of why so many people in Birmingham now boycott HP Sauce.

  • Brexit only becomes a problem for anyone if trade between UK and EU suddenly comes to a halt.
    This is extremely unlikely – consider the reaction of German, French and Italian car makers, for instance, if their products suddenly lost access to the UK market. This would be a huge hit to their economies.
    While EU politicians may be aggrieved at the UK leaving, this is hardly likely to translate into any action to disrupt trade which benefits them more than the UK. Remember all 27 of them would have to agree what action to take, anyway – which is not likely to happen.
    The UK is a net importer, and the EU does not export anything that we can’t get elsewhere – and possibly cheaper if trade barriers with non-EU countries are removed.

  • Rather than engaging in futile and nonsense-filled shroud waving, shouldn’t the pro-EU camp be engaged in a positive argument about all the problems the UK could better solve inside the EU rather than sitting outside it?

    There are heaps of challenges to work together on, ranging from widening markets for UK services to improving energy security, co-operation on research, fighting terrorism and combating climate change.

    The “In” campaign needs to concentrate on the potential future benefits of remaining an EU member rather than focus on thinly veiled threats of how the rest of the EU will “punish” the UK if it makes the “wrong” decision.

  • Brexit only becomes a problem for anyone if trade between UK and EU suddenly comes to a halt.
    This is extremely unlikely

    Indeed — in fact, if the original article is to be believed (eg, ‘the Netherlands risks losing its second biggest trade partner (after Germany); we export for billions of euro’s to you, and 300.000 Dutch jobs are dependent on that (the Dutch government really struggles to get unemployment down as it is’) then the Dutch should be desperate for an acceptable deal to be offered to the UK, as they would be much harder hit by losing trade with Britain than Britain would be losing trade with them.

    In other words: the EU needs the UK as much, if not more, than the UK needs the EU. We will not be negotiating or deal from a place of weakness, where we have to take whatever conditions the EU offers.

  • J George SMID 26th Nov '15 - 3:36pm

    Of course there are problems with the EU and it is right to be sceptical which way the EU is going. Partly it is our fault that we are allowing the EU to go in a direction we are not happy about later. Partly it is the way the EU is organised. I am very sceptical about that, indeed I am a Eurosceptic. But divorce is the least attractive solution to marriage problems. You do not solve the problems, you destroy the marriage.

    I agree with RC: the pro-EU camp be engaged in a positive argument about all the problems the UK could better solve inside the EU rather than sitting outside it. We are not ‘pesky Brits’ quite a lot of nations have a lot of time for us. The UK should be leading the EU, we should fight for the EU following the UK and accepting our British ways. We have to be leading NOT leaving.

  • But divorce is the least attractive solution to marriage problems. You do not solve the problems, you destroy the marriage.

    A marriage is a union, designed to create a single joint entity out of two individuals, so they have common aims and interests and act as one.

    A business relationship, by contrast, is designed to allow two entities with different interests to co-operate on areas where they can mutually benefit, while (unlike in a marriage) remaining fundamentally separate.

    If they discover that the business relationship is no longer in the interests of one or the other, then they correct thing to do is dissolve it.

    The EU is not a marriage, it is a business relationship.

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