Euro-horse Already Out of Barn

The tweet reads “High time for a parliamentary investigation into the euro.” Could they be talking about Greece?

For indeed, doubt was thrown on Greece’s continued membership just yesterday, by Finance Minister Varoufakis, in the event that Eurogroup ministers refuse to accept Athens’ own ideas about how to deal with its tremendous burden of sovereign debt. This despite that fact that there is no mention in the treaties underpinning the Eurozone for any member leaving it, much less any prescribed procedure. Still, there is neither any authorization nor prescribed procedure for, say, giving birth during a transcontinental airline flight, yet that does happen from time to time; if/when the emergency arises and Greece just has to return to the drachma, they’ll surely find some way to do it, with or without formal EU treaty provisions.

In any event, this tweet (from the right-wing Dutch political blog Dagelijkse Standaard) does after all call for a parliamentary inquiry, and cuts closer to home. This is a petition directed to the Netherlands parliament, initiated by a group of political commentators led by a certain Thierry Baudet. Still only in his early 30s, Baudet already has a string of publications to his name, most of them in a Eurosceptic vein, decrying the threat to the nation-state posed by the super-national European institutions. More directly relevant, he also succeeded back in 2013 in having a referendum submitted to the Dutch Tweede Kamer – that is, he gained more than the 40,000 signatures required to put it to the attention of the parliament – which was to be “concerning the future of the Netherlands within the European Union.” The Tweede Kamer did duly consider the proposal, then rejected it.

Unsurprisingly, the group behind this latest proposed referendum has its own website, complete with a dedicated page to “Why a parliamentary inquiry over the euro?” Key to their argument is their assertion that it was assumed Northern European lands would allow themselves to become responsible for the fiscal failures of Southern European lands.

Despite what was claimed later, this perverse mechanism was amply foreseen by politicians. As Romano Prodi, president of the European Commission at the time when the Maastricht Treaty was concluded, said, “The difficult moments were predictable. When we created the euro, my complaint as an economist was (and I discussed this with Kohl and with other heads-of-state): how can we have a common currency without shared financial, economic and political pillars? The answer was: for now we have made this leap forward. The rest will follow.”


It continues to surprise us how it could have been possible for such a radical decision to be paired with such little critical debate. What role did the government play here? How is it possible that politicians did not take more care over the financial stability of our country? What did those involved know precisely about the risks? And what did they not know? . . . Did people realize that this euro eventually would make necessary a very great transfer of power over to Brussels – such as the banking union, the stability pact and the upcoming budgetary union?

So they want the Dutch parliament to look into such questions, obviously with a view towards taking further concrete measures should unsatisfactory answers be revealed.

First of all, again, there is no explicit procedure available for any country now using the euro to ditch it for another currency – although, granted, that procedure can be made up on the fly, but surely not with great accompanying financial and economic chaos. More importantly, although this conservative group can probably once again get their 40,000 signatures to bring this measure before the Tweede Kamer as well, the question of the Netherlands in the euro is surely settled for now. There is no sign at all of any truly widespread political rejection by the Dutch populace of the common currency.

Indeed, economic analysis has tended to show that the euro has greatly benefited those Northern European lands heavily involved in trade and able to keep their labor costs in check – such as Germany, especially, but also the Netherlands, both of whom have seen their terms of trade steadily improve since the introduction of the euro in 1999 against Southern European lands with less ability to hold costs down. This widening gap between those advantaged and those disadvantaged by the euro contributed substantially towards getting everyone in the sovereign-debt mess we find ourselves in now – well, except for Germany and the Netherlands (again), plus a few other Eurozone countries (and Denmark) who find that they can actually ask borrowers to pay them to take their money on loan these days, rather than actually pay positive rates of interest.

This initiative must therefore be counted as merely a cry from out of the Dutch conservative wilderness. To the extent anyone takes it seriously, it is surely not constructive, in that doubts concerning any Eurozone member’s commitment to the euro are not useful just now as that grouping has to decide what to do about Greece’s new governing regime and its demands to cut down austerity. It’s rather the Greek people who need to examine the depth of their commitment to the euro, and thereby their level of support for future negotiating maneuvering by their Syriza government which we can surely expect more of in the near future

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