Benink: The Netherlands must bring the European narrative back into politics
'The Netherlands must make a case for Europe and the euro and cooperate in setting up new European funds, analogous to the corona recovery fund, to finance the transition of sustainability, climate and digitalization,' argues Professor of Banking and Finance Harald Benink. He is very involved in the social debate and explains how he, as a scientist, tries to contribute to it and to make impact in general. Benink is a regular guest speaker in public hearings in the House of Representatives, most recently on European budget policy.
2021 marked the end of the Merkel era, we commemorated thirty years of the Maastricht Treaty that led to the introduction of the euro. The Lower House held a hearing in November on the future of European fiscal policy and the position of the Netherlands. The hearing also addressed the question of whether EU countries should have a maximum budget deficit of 3% and a national debt of 60%. Benink had been approached as a guest speaker (from 1.10.54) because of his research and in his function as chairman of a group of international economists and lawyers that regularly analyzes Europe's financial and economic policies.
Translating science into society
'I think impact, social service, is very important: that research can be translated into policy. And I am following this interaction between economics and politics worldwide with passion. Hopefully I can draw attention to fact-based economic and political analysis, as I did in the Dutch Parliament. And also in my lectures I involve current events of course, every year I adjust the curriculum, that makes the subject more attractive to students. One hopes that science has an effect and makes people think. A dissenting voice is also necessary against populism that debates factual inaccuracies such as the claim that the Netherlands has been drawn into the eurozone against its will. Fortunately, the new cabinet is taking a more pro-European course.
That's why I started my hearing by giving a historical overview of the euro. Prime Minister Lubbers negotiating the Maastricht Treaty, Prime Minister Kok happily riding his bicycle during the Amsterdam summit in 1997 where the Stability and Growth Pact was discussed, and Finance Minister Zalm pulling the first euro bills out of the ATM in Maastricht in January 2002. In the Netherlands, the proud feeling that we were at the cradle of the euro prevailed. Now the discussion seems to have turned 180 degrees. The sentiment is that the euro was not created democratically and that we have to bleed for Southern Europe.'
We earn from the Eurozone
This retrospective discussion caused a stir in the House of Representatives. Of course, Holland had the banking crisis in 2008, followed by the euro crisis with Greece, Portugal, Ireland, Italy and Spain in the years 2010-2012, when everything had to be done to save the euro with European support programs and emergency loans to keep interest rates low. The Dutch criticism of those countries was sharp and fell on the wrong side.
Benink: ‘But we ourselves have forgotten what the euro has given us. For 23 years, thanks to the euro, we have had no revaluations; the Netherlands has gained a more favorable exchange rate against the currencies of its southern neighbors and we have an export surplus. We earn from the Eurozone, we should not forget that. If the Netherlands really wants to return to the 3% budget standard, it immediately has a problem with France, which has almost never maintained that standard for the past 20 years. And Italy, as a member of the eurozone, has never met a maximum national debt of 60% of national income.'
The Netherlands backtracks time and again
'Parties like the PVV and FVD have fed those anti-European sentiments, and the problem is that CDA and VVD, often for populist reasons, have followed that line for far too long. That could have negative consequences like a Nexit (analogous to Brexit where the UK left the EU). The Netherlands is putting its influence at risk with this euroscepticism. Also because Germany is more pro-Europe and can present the Netherlands with fait accompli political facts. Many Dutch parliamentarians do not dare to tell the truth that thanks to the EU and the euro we export much more within Europe.'
'That is not a smart attitude of the Netherlands within Europe. Besides, we are facing big challenges, climate change requires big investments. That is a pan-European project and requires efforts, also for the benefit of southern Europe. We must bring the pro-European narrative back into the debate. We cannot go back to old budget standards.'