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The fall and future of Dutch neo-liberal nationalism

The collapse of budget negotiations and the upcoming elections in Holland provide opportunities for the emergence of better answers to the violence done by nationalist antagonisms, imposed through neo-liberal austerity programmes

Marijn Nieuwenhuis
26 April 2012

Jusqu'ici tout va bien, jusqu'ici tout va bien… But what is important is not the fall itself but the landing…

The Dutch minority coalition has abruptly imploded only a week after the publication of my article on the rise of a contradictory form of nationalist neo-liberalism. Geert Wilders, leader of the Dutch Freedom Party (PVV), decided on the supposedly last day of the seven week closed-door talks to once and for all bury all hopes for a continuation of an ideologically difficult (if not impossible) coalition. The collapse of the talks, which were dedicated to resolving the country’s public debt deficit and meant to brutally cut the public sector (by 14 to 16 billion euro) for the sake of reviving the troubled Dutch economy, exposes the challenge of combining a nationalistic populist agenda with a neo-liberal one. The inherent contradiction proved in the end simply too large to be bridged. Dark clouds are now taking shape on the horizon of a country which some 400 years ago introduced modern capitalism to the world. One would think that it would know by now that capitalism is prone to crises.

The implosion of the neoliberal nationalist coalition means that the Netherlands is very unlikely any time soon to reduce its budget deficit from its current 4.7 percent to the three percent of GDP required by the EU Stability Pact. The leader of the PVV showed little sign of regret for his walkout and instead seemed close to welcoming the implosion as a national victory against “the dictators in Brussels” . Brussels in turn responded by blaming Wilders for ‘lying’ and ‘only caring about election results’ - a sentiment largely shared by both representatives of the Christian Democrats (CDA) and the Economic Liberals (VVD). One wonders however what the coalition partners were expecting when they originally formed their dubious pact with the party that relentlessly acts upon and praises itself for its populism.

Blaming populism

It is uncertain if we will ever fully understand why Wilders decided either to take part in or, after seven weeks, to walk out of the budget talks. Some argue that the PVV is internally fragmented after a long row of incidents that have come along to challenge its integrity. Dissident members have been critical of the lack of democracy within the Party’s ranks and only a few days ago a local branch of the PVV (Limburg) was held responsible for the collapse of the alliance in a provincial government (in Limburg). It is doubtful that the PVV will play an influential role in the formation of a new coalition after the new elections held probably later this year. Its former rightwing partners are said to have finally lost confidence in the antagonistic agenda of Wilders and other parties are unlikely ever to want to cooperate with the PVV. Political isolation will however not make the Party disappear.

The latest polls (held the day after the collapse) show that Wilders’ anti-EU rhetoric and his hypocritical last-minute walkout from the budget negotiations did not have a negative effect on support for his Party, which in fact consolidated to around 13 to 14 percent of total votes. The position of the PVV is difficult to challenge given its antagonistic nature which feeds on an anti-immigrant sentiment, a radical EU scepticism and (when it has the time) Islamophobia. It is most successful in the position of political isolation from which it antagonistically and reactively bolsters strength and popular support. It will take some radical implosion of the party from within to bring about its demise. Meanwhile, what it has achieved with these abrupt coalition talks is the indefinite postponement of a neo-liberal austerity programme.

Neo-liberal scaremongering and the need for political alternatives

The failure of the talks has led to a series of doom scenarios. The former Parliamentary Leader of the VVD, Jozias Van Aartsen, warned last Sunday that the Netherlands can now officially be categorised as one of Europe’s problem countries - a sentiment shared and confirmed by academic economists of several Dutch universities who have warned that the Netherlands will soon join France and Austria in losing their AAA status.

Fitch Ratings in fact have already considered downgrading the Dutch credit status which could significantly increase the interest rate and lead to higher yields on government bonds. The President of the Dutch Central Bank warned: “If we would lose our AAA rating, it could lead to 100 basis points extra interest rate on our government debt and to 4 billion euros [sic] of extra interest costs annually”. Citibank has announced that it has removed the country from its ‘elite club’ (leaving only Germany as a true AAA ‘core country’ in the EU). The financial situation of the Netherlands possibly could further deteriorate if the EU decides to pursue its threat to place sanctions on the country for not reaching its 3 percent budget deficit margin. Having posed as among the harshest supporters of austerity in their attitude to problems in Greece, Italy and Spain, things indeed look very different now for the Netherlands. The fact that the country is (or was) one of the four remaining AAA-rated countries in the euro-zone and a founding member of the EU could also have significant ripple effects on the political and financial stability of an already crippled neo-liberal European Union project. More austerity would however automatically translate into greater support for national populism.

However, the tension between the urgency to soothe the financial markets and the resistance to radical austerity measures characterises and lays bare the contradiction inherent in the principles of (neo) liberal democracy which the EU continues to spoon-feed to its member states. Wilders and his party seem to have come to understand that a popular and reactionary negative is required to prevent the downward spiral of their popularity which has been largely the result of their participation in a neo-liberal austerity programme. The eventual consequence of the budget talks collapse was consequentially presented as a reactionary struggle between the nation and an evil European Union which threatened to dictate and overrule the sovereignty of the Dutch state. Similarities with the equally popular French far-right politician, Marine Le Pen, can be easily drawn. ‘No against the EU, the Euro and of course no against Islam’. The more the effects of neo-liberalism become tangible, the greater the risk of a nationalist backlash. Nationalist populism feeds on the discontent and social-economic inequalities which neo-liberalism all too gladly offers it.

The political middle-ground seems more and more difficult to trot and a more progressive alternative which seriously challenges the fundamentals of economic liberalism and its resultant right-wing populism becomes increasingly urgent. The growing popularity of socialist alternatives in France and the Netherlands are hopeful (yet admittedly dim) signs that an alternative is in the making. Events such as the collapse of budget negotiations and the upcoming elections provide opportunities for the conceptualization and pursuit of viable answers to the violence done by nationalist antagonisms, imposed through neo-liberal austerity programmes.

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