Netherlands: Recession,with no end in sight

As austerity shock-effects wear off, workers’ opposition will grow

A recent study by Eurostat pointed out that hourly wages across the EU fell by 5.8% since 2010. Only in Greece and Portugal there was a more serious fall in wages, in the case of Greece this was 11.3%. The British Labour Party published these figures, which showed that British wages had gone down by 5.7%. The situation was only worse in the Netherlands, Greece and Portugal (the figures have been corrected for inflation). Dutch studies also point out that wages are no better than in 1997

Unemployment in the Netherlands is at a historical high and approaching 10%. Unemployment is predicted to continue to rise until 2018. After 10 years there will still be more than half a million unemployed. House prices are on a long decline, the building industry has collapsed and car sales are lower than ever. With the government planning one round of cuts after another, consumers not spending for lack of money and employers not investing, only exports keep the Dutch economy slightly afloat. An economic setback in China or lower German car sales could spell more disaster for the Dutch economy. Hardly any growth is likely in the next decade. From second strongest position in the Eurozone, the Dutch economy has very quickly joined the ‘stragglers’.

Big attacks on the welfare state and rising rents and prices (inflation is at 3.1%), Dutch workers have many reasons to protest. The government – a coalition of the Liberal and Labour party – is not in a strong position. It does not have a majority in the Upper House. Its main strength is the lack of any serious opposition. The government is trying to get the necessary votes for a cuts-package by making agreements with other parties. But this is easier said than done. The government tries to broker deals with institutions in society, like the housing corporations, the medical sector, the unions, which they call “Accords”. The Social Accord must legitimise cuts on social spending, the Housing Accord must ensure that rents go up and the Health Accord ensures that people have to pay more towards healthcare.

All parties agree that cuts have to be made. This also applies to the opposition Socialist Party, which called for 10 billion euro-worth of cuts in its election programme in summer 2012. The ending of wasteful expenditure on the armed forces’ ‘Joint Strike Fighter’ aircraft, is justified (although we would argue that related jobs should be maintained by converting the arms industry into socially-useful work) but other SP proposed cuts are not acceptable.

Huge electoral gains, as predicted in the polls, eluded the Socialist Party in early September last year, when it declared that it had given up its opposition to the raising of the pension age early in the election campaign. The Labour Party, now very unpopular, gained many votes with the help of the media. Months later, with the Labour Party in an austerity government, betraying its election promises (speak left, govern right), one would expect the Socialist Party to grow in support. But the Socialist Party continues to express its support to enter a cuts-coalition rather that opposes them squarely. This “more of the same” formula offers no perspective for future growth.

Geert Wilders’ ‘anti-austerity’ campaign

Geert Wilders’ right wing Freedom party collected 80,000 signatures against the cuts and Wilders has toured the country in an anti-austerity campaign. There is a danger that he will manage to capture the anti-austerity mood. Though he is gaining support in the polls, the enthusiasm for Wilders party is only lukewarm. His policy shifts, a series of minor scandals in the party, participation in previous government and the fact that Wilders has been on the political stage without really making a difference all play a role.

The trade union movement in the Netherlands has undergone a major reorganisation to ensure its loyalty to the Labour Party and its pro-austerity policy. The leadership concluded the Social Accord mentioned earlier. There have been some union demonstrations, mainly on the issue of home health care. A staggering 300,000 home health care workers are faced with redundancy through the decentralisation of home care. But these demonstrations, for a lack of a perspective and linking up with other issues in the workers’ movement, became smaller. A recent demonstration drew only 400 people – hardly enough to make the government stop in its tracks. The leadership of union movement is not in a position to call for an all-out struggle against the cuts if it is busy concluding ‘Accords’ with the government, at the same time.

The will to fight back is weakened by permanent media propaganda that southern Europe shows that protest is futile. It consumes time and energy, but leads nowhere, is the message. It underlines, the mass media would have it, that so-called reforms are “necessary” and “inevitable”.

With avenues for the expression of their anger blocked, resentment and frustrations among workers are growing. At some stage, explosions will take place. In 2004, a union demonstration against the abolition of early retirement schemes attracted 300,000, at a point in time when the mainstream media had written of the workers’ movement. This could easily happen again. Movements of rent payers, pensioners (some pensions have been lowered by as much as 6%), health workers and youth – who all see opportunities blocked – or even low income small entrepreneurs, are all possible.

There is the danger of the resistance to the cuts being hijacked by Wilder’s Freedom Party. During his ‘tour’ against austerity, Wilders collected 80,000 protest signatures so far. He has shifted from blaming Islam for all the troubles in society to blaming the EU; a stand that he hopes will make him popular again. Indeed, Wilders gained new support since his disastrous participation in the previous austerity government coalition.

The Dutch working class movement, as in many other countries, has to be almost rebuilt. The first step will be workers fighting against the concrete consequences of cuts and then links can be formed with other protestors. With the government drawing up plans to cut an extra six billion euro (while spending 4.3 billion on the Joint Strike Fighter) and no end of the recession in sight, there will be plenty of reasons to resist. The government’s Social Accord with the unions provides for cuts (the lowering of unemployment benefits, for instance) to be carried out at a later stage. If the government ends the Social Accord by making these cuts at a much earlier stage, the unions might be forced into more active opposition.

Coalition government facing difficulties

The government is facing increasing difficulties. No opposition party was willing to subscribe to the new cuts package, so the outcome of budget deliberations in the Upper House remains uncertain. More painful for the government was that an attempt to broaden the coalition, with the participation of another neo-liberal party, failed and was widely reported in the media. In recent days, it was announced that the Netherlands will go ahead and buy the Joint Strike Fighter. Despite opposing this in opposition, the Labour Party, now in coalition, has finally agreed to the government spending 4.5 billion on an expensive fighter jet to further Dutch imperialist aims, while the government makes 6 billion euro cuts. The reaction to this news is another blow to the government.

The government’s tactic of ‘decentralisation’, giving municipalities more responsibilities but no more money, is backfiring. The municipality of the city of The Hague is considering a lawsuit against central government because the Law on Municipalities states that central government has to provide the funds for the tasks that municipalities have to carry out. The city of The Hague also states that central government policy on the elderly is violating human rights, denying elderly people the right to live independently. Home support is provided by almost 80,000 volunteers in The Hague (more that 10% of the entire population of the town) and 12,000 are already overworked. Volunteer help by family and neighbours is therefore already at the maximum level.

Municipal elections will be held in March 2014. The Liberal Party and the Labour Party face huge setbacks. But the election is timed very cleverly; just before the municipalities become responsible for the implementation of cuts. Many central government budgets (health and home care and youth care, for example) will be transferred to municipalities in 2014, after huge cuts. The government is likely to be damaged by the outcome of the 2014 elections, but for the lack of an alternative they will probably stumble on, hoping for an economic recovery.

After the onset of the deep economic crisis in 2008 there was a general feeling that capitalism had failed. When an alternative was not readily available because of the weakness of working class organisation and political leadership, the ruling class grabbed the chance to make up lost ground. Lower wages and high unemployment, previously thought implausible in the Netherlands, have caused an additional shock to the Dutch working class. With very few protests, and with trade union protests limited to several hundred people only, the idea of resistance to the cuts and the consequences of the crisis of capitalism seem remote and unreal. But at a certain stage the shock effects of the last years will wear off. Workers will realise that unless if they resist they face decades of low wages, mass unemployment, low pensions and a breakdown of the welfare state. Working class protests will take time to develop, but once they do, they could grow very quickly and so can the popularity of the alternative of bold socialist ideas.

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September 2013