IN THE first sign of tension between the Netherlands and its ally in fiscal discipline Germany, Dutch caretaker prime minister Mark Rutte has said he sees no point in discussions about tighter EU integration until concrete action is taken to resolve the euro zone’s sovereign debt crisis.
Mr Rutte’s tough comments came as he met EU president Herman Van Rompuy, one of four EU leaders charged with drawing up an integration “master plan” aimed at finally calming the financial markets when it is presented to a summit of European leaders at the end of this month.
The integration drive is being led by Germany, and the plan – on which Mr Van Rompuy is working along with EU Commission president José Manuel Barroso, ECB president Mario Draghi, and Eurogroup chairman Jean-Claude Juncker – is widely expected to propose a new supervisory body for the crippled banking sector as well as closer tax harmonisation between states.
However, in the face of new figures yesterday which showed the Dutch economy shrinking in the first quarter of this year by 1.1 per cent, its third successive quarter of negative growth, meaning the country remains in recession, Mr Rutte was clearly frustrated by the slow pace of remedial action.
“We have to tackle these problems and solve them right now – and not become lost in lengthy structural discussions about the future of Europe,” he said.
“Only then, once the immediate debt crisis has been resolved, will there be a firm base from which to reform the structure of the alliance – and tackle issues such as banking supervision.”
In the short term, said Mr Rutte – whose Liberal Party faces a growing challenge from the Socialists in a September election – the only answer was for euro zone states to meet the terms of existing agreements on debt reduction and budget reform.
“Meeting our commitments will help to restore confidence. That is how countries such as Spain and Greece will ultimately resolve their problems. And that is how the euro zone will find a common purpose.”
Mr Rutte is under growing pressure at home as a €13 billion austerity package agreed by the two minority coalition partners and three smaller parties last month continues to unravel.
Four of those five parties have now turned their backs on a central plank of the deal, ending tax breaks on commuters’ travel expenses, and yesterday another element hit the rocks.
The independent Central Planning Bureau warned that a proposed public sector pay freeze until the end of 2015 would be “impossible”.
It said redundancies and retirements over the next two years would mean wage increases would be essential in 2015 if services were to recruit enough staff to function.
