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9/15/12

The Netherlands: fool's gold

Brussels breathed an audible sigh of relief at the result of the elections in the Netherlands. In these turbulent times, everyone sees what they want to, and what they wanted to see was the comeback of the pro-European centre, who would manage, modulate and internalise the current plan – growth through austerity. If the economics of this are terrible (the postwar economic boom may never return, and why should we assume banks will re-emerge as the economic engine they once were?), the European politics of it are even worse.

The current German consensus that sees partial surrender of debtor sovereignty as the quid pro quo of debt mutualisation is a real vote-loser everywhere else – in France, Spain, Italy, Portugal, never mind Greece. And besides, the Germans say they have written enough cheques in the aftermath of re-unification, so their share of mutualisation will always be limited.

The closer you look, the more cracks there are in the theory that, with these policies, the pro-Europe political centre will hold the ring on the rescue of the euro. Much solace was to be had in Brussels from the fact the Dutch electorate, traditionally seen as the trend-setting Californians of Europe, rejected the extremes. They gave the far-right populist Geert Wilders a kicking, and froze the vote of the Socialist party, which voted against the eurozone rescue package.

Negotiations over the formation of the next government are going to be interesting. It will do nothing to prevent the wrecking of the economy of the European periphery to stave off the evil day when the banks write down their bad assets. This is not how deeper European integration will be forged. The Netherlands is both pro-European and pro-euro. The issue is the management of the euro storm, from which the Netherlands, a rich nation with low unemployment, will find scant shelter.

Read more: The Netherlands: fool's gold | Editorial | Comment is free | The Guardian

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