Tuesday, August 13, 2013

The Stupidity That is European Economic Policy Propels Another Country Towards the Radical Right Wing

The Netherlands Reawakens a Radical Party

It is becoming increasingly difficult to measure just how much social and economic damage is being done by the insanely misguided policy of austerity that European leaders are imposing on members of the European Union.  The latest victim is The Netherlands where as a result of that policy the ultra right wing has gained a new lease on life.

in July Geert Wilders, a far-right politician known for calling on the Netherlands to ban the Koran and exit the euro, wrote them a piquant epitaph. Mr Wilders announced he would hold talks with right-wing parties in other countries about forming an anti-Europe bloc in the European Parliament elections this autumn. He has since spoken with Marine Le Pen’s National Front in France, a party similar to Mr Wilders’s Freedom Party in many ways, and with the Lega Nord in Italy. Having shattered the multi-cultural Netherlands, which once brokered the integration of Europe, Mr Wilders is now proposing to undertake Europe’s dismantling.

How did this radical ideologue get back into prominence after being marginalized?  Austerity of course.

Anti-European feeling in the Netherlands is rooted in the deteriorating economy. The country weathered the first years of the euro crisis relatively unscathed, maintaining its AAA credit rating and a 4.5% unemployment rate, the lowest in Europe. With their privileged economic position, the Dutch blamed profligate southern Europeans for demanding support from the north. In 2011 they led the AAA countries (along with Germany, Finland and Austria) that demanded Europe harden its 3% budget-deficit limit as part of the price for that support. Mr Rutte still claims the strong enforcement powers granted to Olli Rehn, the EU’s budget commissioner, as a personal achievement.

Yet as deficit-cutting progressed across Europe, the Dutch economy turned south. It has now been in recession for six quarters, with output 1.8% lower in May compared with a year earlier and unemployment rising to 6.8 %. Every economic projection has proved too optimistic. As revenues shrank, the Dutch missed the 3% deficit target they had themselves helped establish. Humiliating visits from Mr Rehn demanding ever-greater austerity have lent weight to Mr Wilders’s charges that the government is slashing spending and raising taxes merely to satisfy Brussels.

And what have European policy makers learned from all of this?  Why nothing of course, they are incapable of learning.

During his latest visit in June, Mr Rehn demanded that the Netherlands push through an additional €6 billion ($8 billion) in austerity measures in 2014, on top of those already planned. Mr Rutte will have to pass a revised budget in September though it is not clear whether he can. 

So just another day at the office for European leaders, another day, another country pushed towards social, political and economic crisis.

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