Tensions Run High at EU Talks without the UK

By Oscar Phillips ’21

Mark Rutte, Angela Merkel, EU Pres. Ursula von der Leyen, Emmanuel Macron (Photo Credit: Francisco Seco/AP)

European leaders began in-person talks for the first time since the COVID-19 pandemic hit globally. The first discussion took place in Brussels, Belgium on Friday, July 17 where European leaders discussed economic recovery. While a deal—led by French President Emmanuel Macron and German Chancellor Angela Merkel—was brokered, it faced substantial opposition, most notably from the Netherlands and Prime Minister Mark Rutte. Rutte has led the charge on improving the package financially and politically. They were joined by Sweden and Prime Minister Stefan Löfven, who pushed for a smaller recovery that comes in the form of loans, not grants. This has irritated many southern European nations, namely Spain and Italy, who were both among the hardest hit nations and the most desperate to revive their economies. In anger at the original standstill, Italian Prime Minister Giuseppe Conte declared Europe was "under the blackmail of the 'frugals'.” 

Diplomatically, Rutte has been at the forefront of trying to include democracy clauses and liberalism exceptions to the package, resulting in the less democratic nations of the EU receiving less or no funds from the recovery package. This push led Hungary’s dictator Viktor Orban to joke to the press, “I don’t know why the Dutch guy (Rutte) hates me.” 

Both financially and diplomatically, the Netherlands has made an alliance with smaller Northern nations with frugal reputations like Sweden, Belgium, and Luxembourg. In this case, one defines frugal as placing a big emphasis on balanced budgets, austerity when need be, and a national pride in tight purses. Missing from the alliance has been the UK. With Brexit in effect, they are obviously no longer involved in EU affairs. As a result, the Netherlands lost an important ally. Britain was very powerful in the EU, and ideologically, the UK and the Netherlands shared a long-standing democratic tradition and adherence to liberal economics and free trade. After all, the Netherlands has long taken pride in its economic frugality and thrift. They tout their reputation as a trading nation and as a pioneer of early European capitalism.

Ever since the Industrial Revolution, Northern Europe has held an economic advantage over Southern Europe, much like Northern and Southern states in America. As a result, there has been a large consensus that the North is the more responsible and innovative of the two halves.

As a result, the Netherlands, along with the other Northern “frugals,” can often remark, in an occasionally tasteless manner, that Southern Europe does not share their austere spending habits. To them, Southern Europe is wasteful and constantly borrowing. This idea prompted the then-head of the Eurogroup, Jeroen Dijsselbloem, said in 2017, “You cannot spend all the money on drinks and women and then ask for help.” Southern Europe’s economic woes are well documented and to add insult to injury, the Netherlands is one of the biggest contributors to the EU’s budget and, according to Rem Korteweg from the Dutch think tank Clingendael Research, “it has become almost an issue of theology in Dutch politics not to want to spend any more money on the European Union.” 

While Rutte and the Netherlands have no interest in a departure from the EU, the deal could be viewed as yet another giveaway to Southern Europe and enrage voters. The Dutch call for frugality largely fell on deaf ears as Emmanuel Macron and Angela Merkel pushed for a deal to be completed. As for now, though, the Netherlands find themselves in a much weaker position than they would have had Britain, their ideological ally and more powerful friend, remained in the EU.