A crackling game of give and take

Edition 18 May 2017, by Johannes Visser

No white smoke has yet been detected over Binnenhof, the center of power in Dutch politics in The Hague. A small cabal of politicians, advisors and civil servants has been meeting over the past month, trying to form a new government while staying hush about what goes inside. These insider negotiators only express themselves in the most cryptic of utterances. And so not much is known about how the talks are going between the winner of the elections VVD, Christian Appeal (CDA), Democrats 66 (D66) and GreenLeft. According to VVD-minister of Health Edith Schippers, who leads the formation process, talks are at times ‘crackling’ but they are also ‘solidly flowing along’, all of which is is politico-speak for: ‘not going too bad, but don’t get your hopes up yet’.

To get some idea of what these formation talks are about it makes sense to look at how several pressure groups have been trying to get the negotiators’ attention, mostly through the media. By publishing unsolicited advice in op-eds and ‘news articles’, these outside groups try to influence the formation process and to some extent mirror the inner workings of finding compromises between ideologically diverse coalition partners. Most commentators agree that the most important subject of discussion is the green economy. Largely absent from government formation in previous years, sustainability is now seen as key for keeping the Greens on board in any future government. Closing all the Dutch coal mines is a goal of all political parties, although they differ on the time-line. All four parties are also in agreement about ‘greening’ the taxation system, aka raising taxes on CO2-pollution, but there is much light between the rightof- center-parties VVD and CDA, and the leftist Greens.

Easing the pressure somewhat is a call to arms in April from ninety university professors, as well as a request by the entrepreneurial umbrella group VNO-NCW last year, to heavily invest in the green economy, giving Prime-minister Mark Rutte political cover against some of his staunchly conservative rank and file. Exactly how much money would be invested in green is still anyone’s guess. And despite an unexpected budget surplus of three billion euros in 2016, Schippers has warned that the new government will have less money to spend, after the Central Planning Bureau (CPB), the Dutch National Bank as well as Finance Minister Jeroen Dijsselbloem had adjusted future economic projections downward.

On April 20th, just before all negotiators went on a week’s holiday, Schippers reported that the negotiators had also touched on topics of pensions, education, migration and taxation. The latter may just turn out to be the deal maker or breaker in these talks. All parties agree that at least some reform is necessary in the overly cumbersome Dutch system of raising, exempting and refunding taxes. The Tax Office is reportedly unable to process all tax declarations in time because of insufficiently qualified staff and defunct informations systems. The right of center ‘engine block’ consisting of VVD, CDA and D66 would like to see an incremental change of the taxation system, for example by simplifying sales taxes from three brackets to one. During the election campaign the Greens called for an all-out, radical transformation of the taxation system, a demand they undoubtedly will have to compromise on as the talks progress.

Too many obstacles to speak of are here to derail this high-stakes game of give and take. And yet, ‘with every day of negotiation, it becomes more likely for this government to become a reality’, said D66’s leader, Alexander Pechtold. The alternatives for different coalitions appear less attractive. And so, the talks keep inching forward: squeakily, crackling, quietly.