How the Dutch fell out of love with the EU

There is something up with the Dutch. As one of the six founding members of what became the European Union, the Netherlands claims a special place in the European family. Some even say that through Benelux—a system of political and economic cooperation between Belgium, the Netherlands, and Luxembourg that started with a customs agreement in 1944—the Dutch helped inspire Europe’s integration project. But increasingly, they appear grumpy and disappointed with the EU.

Among its European peers, the Netherlands is a middle-tier power with middle-of-the-road politics. Belief in European cooperation is strong, though successive Dutch governments have steered away from promoting a federal Europe. The political establishment is pro-EU, but also staunchly Atlanticist. Mainstream thinking on commerce and trade is Anglo-Saxon, the approach to finance and monetary policy is German, and the social welfare system is similar to those of Denmark and Sweden.

The Netherlands is too small to be considered a threat, but large enough to be taken seriously: with 17 million inhabitants, it might be called the largest of the small EU member states. Thanks to a domestic political system that nurtures coalitions and compromise, the Dutch are respected in Brussels for their pragmatism, common sense, and consensus building. These ingredients have helped the Netherlands become an attractive and influential coalition partner.

Strategically, the Netherlands has worked to maintain a balance in the EU: among the large countries, and among the institutions. It enthusiastically promoted British membership of the European Community in the 1970s to balance against Franco-German dominance. And it saw a strong European Commission as a way to keep large member states in check and promote the interests of smaller ones.

On foreign policy, the Netherlands favors strong international engagement but rarely takes a controversial position. The country wants a strong EU in international affairs to amplify its own bilateral foreign policy and address issues for which it does not have the bandwidth by itself. But it wants the European External Action Service to coordinate European foreign policies, not direct them. The Hague has been ambitious on European defense cooperation, particularly by integrating its military forces and capabilities with those of Germany and Belgium; but like most other EU members, the Netherlands has dramatically cut its defense budget in previous years.

As an Atlanticist, free-trading nation, the Netherlands backed the negotiations on the Transatlantic Trade and Investment Partnership (TTIP), though antitrade protests made the government lukewarm about a deal. Even on Russia, it supports the EU’s sanctions regime, but less fanatically than might be expected of a country that lost 193 of its citizens when Russian-backed separatists shot down Malaysian Airlines flight 17 over eastern Ukraine in July 2014.

But since the early 2000s, the Netherlands’ image as a mainstream, no-nonsense partner has changed: the Dutch have started to view the EU with growing suspicion. EU enlargement in 2004 altered the union’s internal balance and member states’ voting weights. The Netherlands has less of a say than some of the newest members, yet it is one of the largest per-capita contributors to the EU budget. Despite the benefits in mutual trade, a larger union meant the Dutch voice became softer. This proved particularly uncomfortable when member states agreed to hand over more powers to Brussels.

Meanwhile, the commission proved unable to stop some countries from breaking EU rules such as the Stability and Growth Pact, which aims to ensure economic stability, sparking the ire of the rule-abiding Dutch. A first sign of estrangement was the rejection in a 2005 referendum of the EU’s proposed constitutional treaty.

The eurozone crisis added further concerns about the EU’s direction of travel: the Netherlands became a creditor country that was asked to bail out Southern eurozone members while having to take their word for it that they would make the reforms necessary to weather the financial storm. The perception that the Dutch were left paying the bill while other countries flouted the rules became fertile ground for Euroskeptic politicians. It boosted the anti-immigrant, anti-EU popularity of Geert Wilders and made the Dutch government increasingly critical of the commission and ever-closer EU cooperation. The government saw the commission less as the defender of small countries’ interests and more as an overly ambitious regulator with an appetite to expand its reach.

By 2013, The Hague was actively seeking a smaller, more effective commission and finding support in Germany and other member states. Former Dutch foreign minister Frans Timmermans introduced a subsidiarity test to identify policy areas that can better be left to member states than to the commission. Later, as first vice president of the commission in charge of the better regulation portfolio, among other issues, he supported a mantra that “the EU should be big on big things and small on small things.”

Gradually, however, public opposition to the EU hardened. The rejection of the EU Association Agreement with Ukraine in a referendum in April 2016 underlined the image of the Netherlands as a country critical of the EU. Today, support for EU membership hovers at around 40 percent, feeding speculation that the Netherlands could be next to leave the club after Britain voted to quit in June 2016.

Euroskeptic parties will do well in the parliamentary election on March 15, even though a referendum on the Netherlands’ EU membership is unlikely for now. Brexit helps Dutch Euroskeptics in another way than just setting a precedent that could be copied. Britain’s decision creates a financial headache for The Hague, as it will be under pressure to help fill the €10 billion ($10.5 billion) annual funding gap the UK will leave behind in the EU budget.

Brexit will also make it more difficult for countries to block decisions in the EU Council under the union’s voting rules. To stop France and Germany from pushing a decision through, a blocking minority of thirteen member states is needed. The EU’s new arithmetic puts smaller (and Northern) states at a disadvantage.

The Dutch government seeks a more pragmatic European Union, not a federalist fairy tale. In response to Brexit, some European leaders now talk of a flight forward toward deeper integration. But the Dutch law that enabled a referendum to block the EU-Ukraine Association Agreement could similarly be used to block a new EU treaty. And so, as long as that law exists, The Hague will oppose changes to the treaties.

It is unclear whether the governing coalition that emerges from the March 15 election will have the political courage to change the law. Much will also depend on the new balance of power in the 27 remaining EU member states. It remains to be seen whether the Netherlands can ensure that its interests are protected and its concerns heard in a union that will inevitably revolve around Berlin and Paris. For the time being, the Dutch feel they are being pushed—albeit reluctantly—ever closer to the exit.

Rem Korteweg is a senior research fellow at the Centre for European Reform in London. This blog post is the second in a set of guest contributions providing insights into the March 15 Dutch parliamentary election.