Divided over Ukraine and defence spending, the bickering Dutch have been effectively sidelined in Europe, writes Gordon Darroch.

In December 2023 Mark Rutte, as caretaker prime minister, faced down a critical test of his leadership on Ukraine. The European Union had drawn up a fresh €50 billion aid package, two-thirds of it in the form of loans.

As a fiscal conservative, Rutte was against expanding the EU budget, but he was prepared to flex the rules in the case of Ukraine, not least because he was closing in on the Nato secretary-general’s job and had a reputation to uphold as one of Volodymyr Zelenskyy’s closest allies. But in the Dutch parliament, a majority of the newly-elected MPs were threatening to support a motion against the aid package that had been tabled by the orthodox Protestant SGP party.

Some, like Geert Wilders’s Freedom Party (PVV), were inherently sceptical of spending more money on Ukraine at all; others, such as the farmers’ party BBB and Pieter Omtzigt’s centre-right NSC, objected to the use of debt finance.

They argued that the package should be funded by making savings elsewhere in the EU budget, but Rutte dismissed the idea as unworkable. And then came the bombshell: the prime minister told MPs it was pointless to pass the motion anyway, because he would simply ignore it. “If this motion is passed and you want me to enact it, I’m telling you now I won’t,” he said. “You’ll have to table a no-confidence motion and the entire cabinet will resign, you can be sure of that.”

It was a bold “back me or sack me” ultimatum, even if the implications were unclear. Rutte and his cabinet had already resigned in July, triggering elections in which barely a quarter of voters backed the parties in his coalition. His government was on life support. But the bluff succeeded: the SGP backed down, MPs voted for the aid package and Rutte went to Brussels with his ambitions and his reputation intact.

How different were the dynamics last week when Dick Schoof found himself in a similar quandary over the European Union’s €800 billion rearmament plan. Then, as now, the prime minister was a firm supporter of raising EU spending to protect Ukraine from Russian aggression.

Eurobonds

Then, as now, MPs tabled a motion opposing the plan because it involved reckless borrowing in the form of debt, commonly known as Eurobonds. And then, as now, the prime minister openly set himself against parliament’s wishes.

But unlike his predecessor, Schoof was unable to call parliament’s bluff. The non-partisan prime minister simply lacked the authority to threaten to walk out and take his ministers with him. The vote went ahead, with three of the four parties in his coalition saying the Netherlands should reject the plan.

Schoof was then called to heel by the coalition party leaders, who hold the real power in his government. They berated him for not listening sufficiently to their concerns before he went to Brussels and signed off on Ursula von der Leyen’s plan to ramp up European defence spending.

For a brief moment it looked as if a full-blown crisis might erupt as Schoof faced off against PVV, BBB and NSC, complaining that they had left him in an impossible position in Brussels. But with Geert Wilders unwilling to force an election on the issue of national security, they opted instead for a classic Dutch compromise.

Schoof would not have to disown his support for the rearmament plan and would be given more scope to negotiate the details. But the cabinet would cast a critical eye over the plans and vote no or abstain on anything that reeked too strongly of Eurobonds.

“Defence is a structural challenge that requires structural funding,” three ministers wrote in a letter following late-night crisis talks with Schoof. But they followed it up with: “Debt is not the solution.” The cabinet decided it would indeed have its cake and eat it.

Backseat role

The upshot is that the Dutch, having been one of Ukraine’s most forthright backers during Rutte’s premiership, will take much more of a backseat role in future. As one diplomat told NRC, the Netherlands has become one of the unpredictable factors in the negotiations.

The ministers’ letter makes it plain: “In order to serve Dutch interests as effectively as possible, the cabinet will not take a pre-determined position into the negotiations, so that the conditions and priorities stated above can be taken on board.” The coalition parties expect Schoof to act as a financial sniffer dog, making sure Europe’s defensive plans are untainted by Eurobonds or any gateway drugs.

The bigger problem is that the Netherlands is increasingly out of step with European thinking on defence and security. The row has overtones of the start of the pandemic in 2020, when the Dutch vehemently opposed using Eurobonds to fund the recovery and the then finance minister, Wopke Hoekstra, outraged his peers in the Mediterranean countries for implying that the crisis was caused by their slack fiscal management.

Although the backlash forced Hoekstra to soften his language, the Dutch got their way and ensured the coronavirus emergency fund took the form of non-mutualised loans.

Frugals

Back then the Netherlands could count on the support of its “frugal four” partners: Denmark, Sweden and Austria, but the other nations have come out of their frugal shells in response to aggression from Russia and elsewhere. Sweden has joined Nato. Denmark’s sovereignty in Greenland is under threat.

As the only frugals in the village, the Dutch risk marginalising themselves in the debate while the other EU nations adjust to a world in which Donald Trump sees Russia as a potential partner and Europe as a rival. Even the Germans are poised to release their debt brake to fund a massive increase in defence spending.

Within a year the incoming conservative chancellor, Friedrich Merz, has gone from being an avowed defender of the Schuldenbremse to vowing to do “whatever it takes” to defend peace and freedom in Europe. And if that means letting the bickering, bean-counting Dutch argue with themselves on the sidelines, so be it.

Read more of Gordon Darroch’s work on his website.