European Council on Foreign Relations

The Dutch in a twist

The precarious coalition that Dutch prime minister Mark Rutte (VVD, conservative/liberal) had cobbled together 18 months ago (with the Christian Democrats (CDA) and with the support of Geert Wilders’ Freedom Party (PVV)) collapsed on Saturday. The makeshift construction by which the PVV did not participate in government but ‘condoned’ it had been hanging by a thread already because they recently lost their minimal formal majority after the defection of one of Wilders’ lieutenants.

The bust-up came over cuts required to meet the 3% limit for the 2013 budget. With the deficit running at 4.8% some €14b had to be found, and the three party leaders had been negotiating for seven weeks in secret. Just as Rutte thought they were there – having found over €14b in all manner of measures to which Wilders had agreed individually – Wilders pulled the plug on the package, saying that he would

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ECFR this week: 20th April 2012

We are keeping a close eye on France over the coming weekend, as that country votes in the first round of its presidential election. Ulrike Guerot has previewed the election from a German point of view in this blog post – ‘Should Merkel be scared of Hollande’ – asking whether German unease over a socialist victory is justified. In this article Thomas Klau argues that France deserves better than the campaign it has been given.

We’ll have more on the election as events unfold – and it sounds as though Thomas has already been kept very busy giving analysis to the French and European media.

Meanwhile, several other things have been keeping us busy:

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Should Merkel be scared of Hollande?

Looking at some of the most radical notions in some speeches of François Hollande, who is now actively fishing in the basin of the French left, one could have a clear flash of ‘déjà-vu’, as it resembles pretty much François Mitterrands ideas back in 1981. Six weeks of vacation and retirement at 60 were already in vogue back then.

The nervousness seems to grow in Berlin because the French elections and their likely outcome – a French president called Hollande – would heavily impact German plans with respect to the next steps in the euro-crisis management, especially the vote and implementation of the fiscal compact and the ESM. The possibility of Sarkozy u-turning the devastating trend that has been unfolding against him in recent days is highly unlikely. Hence, Berlin is busy preparing a combined vote of the fiscal compact and the ESM in the Bundestag by the end of May. The aim is

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EU opportunity to press Jordan

The visit of the Jordanian monarch, King Abdullah, to Brussels and Strasbourg (a video of King Abdullah's speech in the European Parliament is available here) represents another opportunity for Europe to press the case for reform in the Hashemite Kingdom. As we argued in a recent report, the pace of political change in Jordan has slowed considerably, despite promises made by the King last year to open up the system.

New steps taken over the past week by the country’s parliament advancing an election law limiting the number of seats available to political parties in parliament, and banning parties founded on a religious basis, represent a considerable blow against any reform agenda. Moreover, they are clearly direct attacks on the Islamic Action Front (IAF), the political wing of the Muslim Brotherhood, which is the country’s most popular party and would likely win any fair

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€ view: good and bad news on current account imbalances

I spent the second half of last week at the conference of the Institute for New Economic Thinking (INET) in Berlin. The central policy topic was – of course – again the euro-crisis. While the vast majority of speakers agreed that the crisis was much more than a simple fiscal solvency crisis (in contrast to what sometimes has been discussed in some German media), there was disagreement on the question how the underlying balance-of-payment crisis could be solved. Interestingly, there were already vastly different claims on what really is going on at the moment in terms of adjustment in the euro periphery. While one speaker claimed that “unit labour costs in Spain continue to rise more quickly than in Germany” another speaker claimed that “in the 2.5 years since the onset of the crisis, Spain has regained already a third of the competitiveness lost in the decade before”.

In fact, the

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