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EUROPEAN REVIEW

ISSUE 21- Page 5

Flatlanders have bumpy ride in dramatic year for the Netherlands

In our occasional series on our EU partners we focus on those near neighbours of the UK, the Dutch. Proceeding, usually, by consensus and with caution, both politics and industrial relations in the Netherlands rarely strike sparks. However 2002 turned out to be a bit of an exception.

THE NETHERLANDS HAS OFTEN BEEN seen as a model of how to conduct government and industrial relations. Dutch companies, such as Philips and Unilever, are known throughout the world and they tend to follow an open-minded consensual approach, often using English as a business language with a pragmatic approach to industrial relations. Governments, under the proportional representation system were always coalitions, often of apparently opposed parties. For the last eight years an alliance led by Labour leader Wim Kok with Liberal and Social Liberal groups pursued policies which led to economic growth rates of 4% annually and unemployment falling from 8% to 2.4%, while it was rising to nearly 9% in the EU as a whole. The 'Dutch economic model' which encompassed a strong central bank, a social consensus on wage restraint, and limits on government spending was lauded throughout Europe. Indeed, its success supported the appointment of Wim Duisenberg, the Dutch central bank chief, as head of the European Central Bank.

Personalities in 2002 Dutch politics: murdered right-winger Fortuyn, Harry Potter look-a-like Balkenende and defeated Prime Minister Kok

However, over the last few months there were signs that this happy state of affairs was coming to an end. As the German and U.S. economies slowed down the very openness of the economy became a disadvantage. Growth virtually ground to a halt in the last quarter of 2001, industrial production fell 3.2% in the first three months of the year, and retail sales were down 1.1%.

Strikes began to break out, with Philips losing 30,000 work-days, and government accounts went into the red. It was against this background that the government resigned in the spring following an unfavourable report on the rôle of the Dutch army in Bosnia. During the campaign another factor came into play: the new extreme right-wing politician Pim Fortuyn, playing on fears about immigration, received growing support. Then, sensationally, he was murdered and support for his party (LPF) grew even more. The result left the LPF as the second largest group in Parliament and they formed an alliance with the largest, the centre-right CDA and its socially conservative leader Jan Peter Balkenende, whom the Dutch press compared to Harry Potter.		His appointment as Prime Minister caused diverging views among the social partners with employers declaring themselves more in tune with the new administration while their call to repeal care leave legislation only fuelled fears among trade unions that they would 'toe the line' of the right wing government. In the event government proposals actually brought the social partners back together as both sides deplored the cuts in disability insurance (with employers shouldering more of the burden), subsidies for jobs for disadvantaged groups of workers and severance pay. Strikes continued however with the airline KLM seeking damages in the courts of €2,000 per striker after a July walk-out.
	Dutch multi-nationals felt the heat in 2002

In mid-October there was another shock for the Dutch people as the new government collapsed making it the shortest-lived since the second world war. Whilst there were disagreements over issues such as EU enlargement, the main reason was the unstable nature of the LPF which frequently changed its leader and indulged in backbiting. The voters seem set to withdraw support from them in the new election set for January but, apart from their absence, the composition of any new coalition is still unclear.

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