News from the Netherlands

undertheradar's picture

Unemployment Benefits


UWV, the institution paying out unemployment and disability benefits came out with a report Monday stating that it's funds reserved for the unemployed had fallen to minus 1.9 billion euros. At the end of 2008 there was still more than 9 billion euros to pay out unemployment benefits. The employee contributions were scrapped in 2009 by the fourth Cabinet under PM JP Balkenende. The reason at the time was to compensate for drops in purchasing power due to other measures taken. The current Cabinet under PM M Rutte is discussing ways to cut spending this week. They had received warnings from Brussels last week to toe the line on the deficit. A likely outcome is that employee contributions will be reimplemented. A short gaze over the comments to news stories covering the developments on UI indicates widespread dissatisfaction and cynicism.


Update 15:53 CET:


Minister of Social Affairs Henk Kamp says a reintroduction of employee contributions would harm purchasing power and would not be practical. A new administrative system had been introduced recently to simplify the administration of employee's wages and an employee's contribution to UI does not fit in the simplified system.


Give me back my Guilder


The Freedom Party, the party never shirking controversy, in fact usually benefiting from it in the polls, released a cost benefit report they say shows a return to the guilder would be positive. The essence is that leaving the euro would cost 51 billion euros but lead to benefits of 75 billion euros. They had commissioned Lombard Street Research to do it and are being vehemently criticized for using a firm widely known to be eurosceptical.


Candidate for the leadership of the Labour Party, R Plasterk, is especially critical and reasoned that the researchers had started with that conclusion and worked their assumptions to prove it. Hmm, who has produced any 'objective' research on this issue that the rest of us can examine? I may look further into Labour Party leadership contest but it will be decided in a couple of days and another angle on politics generally may be of more interest to zerohedge readers. writer Jeroen de Boer argues that LSR's conclusion that the Dutch going it alone would be positive is actually a 'wild' experiment since the guilder had been defacto tied to the D mark for decades except for a few incidents. So he seems to be insinuating any scenario for leaving the euro should involve using the same fiat as Germany. He picks through the research in his way and adds some from other sources and his own logic. This mostly involves comparing exports of countries such as Switzerland, Denmark, and Sweden to Germany. He then reasons it wouldn't work because the Netherlands has deeper trade links with Germany.




PM M Rutte said this afternoon that he thinks the guilder would have been 'destroyed' by speculation in 2008 and 2009. Like so many currencies that were 'destroyed' in those years I guess. I wonder what makes him so anxious.


As I've said, the point of my blog is just to give an impression of events in the Netherlands. We can discuss this attempt at insight on my part in the comments. That is if anyone deems any of my observations interesting or would like to help me out trying to make sense of it all. I'm trying to figure out an angle that will fly on zerohedge. This is something entirely different from my first post so we'll see what happens.

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winter2012's picture

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Lednbrass's picture

For what its worth I found this informative and like the exchange, good to hear this perspective.

Treason Season's picture

Ambrose Evans-Pritchard has a piece on Geert Wilders. Nothing really new but people might enjoy the comment section.

Ghordius's picture

Ol' Ambrose carefully hides context in this article again. He can't resist EURbashing stories, eh? ;-)

undertheradar's picture

Absolutely. He always does, and always with good reason. The banking sector is kaput. How does it try to make money these days?

The entire regulatory system within eurozone countries, especially that of financial markets, is not fit to withstand the onslaught of these exotic and hard-to-understand products. The products look fancy and may pay off in the short term for buyers, and thus stroke the egos of the buyers who then award themselves astronomical compensation and leave the ticking timebombs to their successors.

There is no will to thoroughly clean up the banking sector, in fact, the politicians look to the banks, the BIS, the ECB to receive their marching orders.

I think the focus of solutions to the eurozone crisis are almost completely misguided:

1. Politicians focus on the Maastricht criteria of budget rules. This seems to be easy to sell to their electorates because the electorates understand that you have to live within your means and so whoever carps on about them is seen as some kind of moral crusader who just isn't given the chance to succeed. Meanwhile, even if they are put in power, never seem to be able to fix things in a sustainable way. They may succeed in the short term, making things even more difficult to their successors to apply the 'golden' rule in the future.

2. Leaving capital rules and thus 'financial regulation' primarily to the BIS in Basel. This is a club of career bankers and central bankers that are primarily interested in keeping the banking system afloat and have little interest in fixing social problems.

3. An attempt to introduce 'financial regulation' by the likes of Merkozy through a Tobin tax. Once again, it would be nice to reduce 'speculation' by taxing financial transactions and it appeals to their electorates because they understand that the system should be taxed to earn back the bailouts. But do they really do anything about the complexity of the products? And will they ever succeed in introducing it? Sounds like a lot of hot air to me.

The euro is entwined in a complex global financial system and its an 'artificial' construct impossible to manage this way because it has none of the strengths a currency requires.

I could go on and probably will but that's enough for now. I'm interested in any reactions ;)

theFlyingDutchman's picture

I do wonder what should happen with the Euro. I'm not sure what is the 'best' option left here. If Germany and the Netherlands would left the Euro the new currency will rapidly revalued due to our gold reserves and strenght of the economy. Our economy will imploded when that happens. Devaluing new currency isn't a great option either seeing the SNB's balance blown up. And it's only a short term option.

It looks like Germany is trying to stay in the Euro until someone has to actually pick up the tab. Don't think they are that stupid to think they can actually cure the current problems.

undertheradar's picture

I also truly believe the germans are prepared to bolt and go it alone at any time. There will be a lot of chaos in the short term if that happens, and its not clear how it will work out long term for them. They will probably face having a stronger currency and that is going to affect their export miracle, which is showing signs of difficulty already. And they will have sovereignty back over their currency which is a very important thing to have with politics moving at the speed that it does within the eurozone. But yes, to boot out a couple of the weaker countries doesn't seem to be working either does it? Savers in those countries are playing their own kind of regulatory arbitrage by putting their money in the banks of the stronger countries. Which strengthens the strong countries in the short term and weakens the weak.

Setarcos's picture

Just pay the banks and shut up.

We all know that compound interest works SO well.

We all know that leverage of actual deposits and notional derivatives works SO well.

Maybe you do not believe me, but the the transfer of wealth to the 0.01% is a clear cut case.

How dare anyone complain about a system that works SO well!

Come on, just pay up to the banks which so kindly lent you money.

They are the victims in all of this - similar to the way that poor Israel is the perpetual victim which always wags the dog.

(Sarc off)

We - the bulk of humanity - are up shit creek, without an oar of any sort.

But we are not akin to some little boat cast adrift; we are more akin to the "unsinkable Titanic".

Hello WW3 when, not if, Washington/Tel Aviv launch war on Iran.

Only some kind of miracle - the intervention of some kind of god - could halt the run-up to nuclear WW3.

I do not believe that there is a god, let alone one that cares about our species, which has manifestly stuffed everything up.

Plenty of other locations in the universe where, sooner or later (given infinity) some species just might "get it right" ... presumably by not having endless wars and destroying the environment.

Dunno.  Hereabouts we apparently have a version of a god that conforms with the Old Testament, Talmud and general Zionist 'thinking', i.e. based in hatred, fear, loathing and revenge ... for what?

Hello WW3.



Shizzmoney's picture

For the sake of your unemployed and helpless, Holland, Get off the Euro! 

These German/British/Hedge Fund bankers will drain every one of the member countries' entitlement well dry, and their gold, until every last drop is taken.

undertheradar's picture

You can bet they've been gathered around the table for a while.

Capt. Ray's picture



Let me try to describe it the way I tell it to my ducht family:

Euro is a State owned currency.

Guilder is a State owned currency.

So, the freedom that you fantasizes about when thinking of "your own" currency is a misassumption.

The ducht will just transfer from one State owned currency to another.


That’s why, imo, they talk about it behind closed doors with the head of State. The Queen.


There are some benefits to the Guilder though. The point of entry of the guilder money supply is, in a small community, closer to everyone. So there are the benefits.


But in the end… (like one week after introduction)

It’s the State and the fractional reserve banking system that is tight to the petro-dollar that fnck them over (etc, etc). Like everywhere else, btw.

A picture of the Queen on a piece of paper does not make money different.





undertheradar's picture

The credibility of a currency is important. It's always a struggle for who has sovereignty over it, who is trusted to write contracts in it.

Capt. Ray's picture

I agree Undertheradar.


Credibility = Enforcement

Sovereignty = Sate territory

Trust = Law


All are tools of the monarch.

Flounder's picture

Ernst does a good job in reporting Dutch economic and eurozone issues.


Hannibal's picture

I think there is way too much "Obedience!"

bernorange's picture

Seems apropos to add here:

"Inquiring minds are reading a 73 page detailed report The Netherlands & The Euro that explains country by country why Italy, Greece, Portugal, and Spain are going to need lots more money, and the Netherlands and Germany will end up footing the bill.

The study highlights the fundamental flaws of the Economic and Monetary Union (EMU), the damage done by the euro to date to the Netherlands, and the potential costs down the road. The report conclusion is Netherlands should exit the EMU.


undertheradar's picture

Thanks for the link, will be an interesting read.


I'll add one while we're at it:

oulous's picture

I live in Amsterdam.

Whats your blog undertheradar?

undertheradar's picture

You're looking at it. I have contributor's rights here. Until I don't.

oulous's picture

I also live in the Netherlands. My perspective is helped and harmed by my weak understanding of dutch.

I have to say its a very well run country when compared to so many others. All western nations have gambled in the range

of debt based prosperity. The real question is which ones will survive a post debt reset and why? I can't help but think the NL

has a chance to get some things right. They are cutting costs like mad here and continue to have an open debate about what

to tackle next. Housing is a problem here as it is way too expensive. 

undertheradar's picture

I'm not as optimistic about the open debate here. It may be a bit of hubris on my part, but I would like to get beyond the pat answers people have one way or the other.

Treason Season's picture

I don't know if there is a demand here at ZH for Dutch centric econ news but I feel there is a crying need for boots-on-the-ground bloggers from not only the Netherlands but Spain and Germany and Eastern Euroope and elsewhere a spark of resistance against this Eurofascism exists. Some kind of rallying point and information zone is needed. Not sure what I am suggesting actually but it seems the opposition against this Brussels based tyrany is too dispersed and unorganized and too much resignation prevails. Anyway here's hoping the Dutch wake up and regain their sovereignty.

Ghordius's picture

Treason Season, could you give me an example of this "Eurofascism" in the context of what this means for someone living in the eurozone in general or in the NL in particular?

Treason Season's picture

Well, just off the top of my head I haven't met one person in the Netherlands or anywhere else in Europe that voted for Rompuy, have you?

Ghordius's picture

then you haven't met Jan Peter Balkenende, the Dutch gentlemen who voted on behalf of the Netherlands for Rompuy, who is something like the permanent secretary of the Council, official title: "President of the European Council".

look it up

it's a one-country one-vote and the person has to be: 1) boring, 2) experienced (it has to be a former Prime Minister) and it has to have the 3) trust of the heads of governments who meet and form the European Council, that is nothing more than a bloody summit of governments.

I personally think Herman Van Rumpuy fits perfectly, he has been voted to the Belgian Parliament, he has been chosen to head the Belgian Government and he can be trusted to keep his mouth mostly shut and not to do anything the Council does not want. Because his job is mostly not doing anything without consultation of the Council anyway.

debtor of last resort's picture

Like this one: a Dutch (and French) "NO" to a European constitution. After that, 98% of it was implemented as the Lisbon Treason, pardon, treaty.


At the backdoor, and after dark

And of course, we have all the lies about the economy. But that's worldwide.


Ghordius's picture

oh my goodness, not another of those discussions...

the Dutch had a consultative referendum (in 2005, I think) on the European Constitution. Which was scrapped.

Now you are claiming that 98% of the European Constitution is in the Lisbon Treaty... now, without making the detour to the fact that the Kingdom is structured on the right and duty of Parliament to make legally binding treaties as it sees fit (otherwise the referendum would not have been consultative and it would have been legally binding):

do you have anything where the common man skating on the canals of Rotterdam can say: "Here, this is EuroFascism" - best paired with the comment: "And our elected Parliament is powerless to do anything against it"?

alfman's picture

banks and big corporations ruling is fascism.

i hope, you get it.

Ghordius's picture

my question is still valid: How do you explain it to the man on the street? Ever tried it in those words? People complain about Van Rumpuy, of all unimportant things....

undertheradar's picture

Exactly. There is a dire need to refocus the debate.

oulous's picture

I agree with boots on the ground. At this point I would put very high value on a multi nation blog of people sort of tweeting small annecdotes about the country they live in. For example "Seeing more Geert Wilders posters." "Four new stores closed here in Munich on a busy shopping street." "Spanish government is cutting pensions for sanitation workers." "My uncle lost his job here in Belgium."

undertheradar's picture

The events are everything. We get too many stereotypes fed to us, or too many prejudices from one another to be able to look at the situation. It is meant to anger us, confuse us or give us a chuckle. At some point we have to take it a bit further than that. There is good work being done, and we should share links to it.

undertheradar's picture

Let's see what we can do right here. I mean, that is my intention, to pull in people from around Europe to discuss this openly instead of the whining we are limited to on our national medias. Because the Dutch future is inextricably linked to the fate of Europe (I've read a bit of diplomatic history) that is certainly something we can do here. Of course, my intention is stated in my blog and the springboard is a story coming from the Netherlands. I am happy to stay here as long as the Tylers let me. We'll see if it all works and what kind of a crowd we can whip up and for how long.

Fed_Printstone's picture

I for one have thought for a long time that it was HIGH f'ing time people outside the Netherlands got a whiff of the putrid economic smell.

God only knows the outside world still thinks of it as one of the best-run countries in the world (akin to some tulip-and-windmill cartoon of tolerance and love with always-smiling perfect families and 2.1 pot-smoking kids in every home.)

It's only a veery thin layer of "so-very-nice-and-clean-and-well-run" that is covering up the ugliness and economic unsustainability underneath, and cluelessness within.

The fact is that it is slowly crumbling from the inside out from the calcified mass of decades of layer-upon-layer of misguided policies and regulations concerning/coercing almost EVERY aspect of daily life. In business and everywhere else for that matter.

Keep up the good work!

undertheradar's picture

Thanks Feddy, looking forward to more incisive comments from you.

Ghordius's picture

" ...since the guilder had been defacto tied to the D mark for decades except for a few incidents..."

There. You have it. The Guilder going alone would result in a peg or floor to the euro (or later to whatever other currency Germany, France and the other two BeNeLux woud be using). The current situation of the Swiss Franc is the best example - the CHF is hiding under the euro's gown.

This scenario would make more sense if the dollar goes trough strong devaluation bouts that cannot be offset by more LTRO.

We are in a Currency Wars "Race to the bottom" phase. Should we unexpectedly turn into a braking phase (for which I don't see the political will yet), then it would make sense for the Guilder to get out to play - at great cost for the supply lines, though, so don't expect the small and medium businesses of the Netherlands to be very happy.

The logic of the "optimum currency zone size" still applies: the Netherlands are small. Fine economy, but small in a fully globalized world.

undertheradar's picture

Hi Ghordius.

I think you have it. We are in a currency war, with no suitable regulation to control it so that it is sustainable. I guess currencies will always be at war, but if we are going to avoid major deflationary and inflationary events following each other up, we're going to have to agree to do something about the weapons of mass destruction. There is no political will anywhere to be found to handle this, in fact it is close to suicide to even suggest.

Any currency zone would also have to involve a fiscal union of sorts and lots and lots of politics, which seem to polarize everyone. On a smaller scale it might work.

Ghordius's picture

no, currencies are not always at war - or at least not this heated. we had long lulls of peace between wars, for example the Pax Americana Bretton Woods Agreement. a time where a US congress was saving and paying back debt instead of borrowing.

and this meme of "it has to involve a fiscal union" is IMO just a propaganda point.

undertheradar's picture

Good set of links, I will dig in sometime and get an impression.

DutchZeroPrinter's picture

We don't need a fiscal union. It's needed to take away our freedom.

Gold has been the standard for centuries. It's just a medium of exchange. It's a pricing mechanism for different types of goods. We didn't need a fiscal union back then. We need sound money. It will regulate deficits, the price of money and will prevent the global boom and bust cycles.

undertheradar's picture

Agreed fully on the PABWA you mention. But a lot was different then. Not just sound budgets.

A currency zone would require give and take. If I look at France, Belux, NL, DE, all countries have totally different starting points for a currency union. Look at the states of the real estate markets. In NL, we reached a peak a few years ago, based on a mortgage interest rebate system that is getting out of control expensive. The Germans have started their own RE uptrend, I don't think it involves rebates, but they are also starting at a much lower rate of home ownership and a big fear of inflation.

DutchZeroPrinter's picture

The problem is that interest rates are fixed. Interest rates is the price for money. When prices are fixed, supply and demand will be distorted. Right now, interest rates are far too low. It destroys the real pool of savings. We need savings to grow our economies.

In a free market with sound money, interest rates will be determined by the market. Interest rates could be different for different cities. When a bank runs out of money, it has to raise interest rates. Savers will bring in the money, less people will borrow from that bank. It's just supply and demand. Price fixing will always lead to misallocation of recources.

undertheradar's picture

Very peculiar and principled talk DZP. Tell me more about how you would set up a banking system.

DutchZeroPrinter's picture

Well, we have been there:



In the 1600s One of the first measures of the revolutionary Dutch government after breaking away from Spain was "free" or "individual" coinage, where the state would coin any metal delivered to it at no or very small cost. Free coinage was an immediate success. As the seventeenth century began, the Dutch were the driving force behind European commerce. The coins that had legal tender status were often worn and damaged, so it was not easy to exchange them.

To do so, the Bank of Amsterdam (Amsterdamsche Wisselbank) was founded in 1609. Coins were taken in as deposits based not on the face value, but on the real value of their metal weight, with credits, known as bank money, issued against them. And so was created a perfectly uniform currency. 



undertheradar's picture

Quoting Kindleberger:

The excitement in tulips began in earnest after September 1636, when bulbs were no longer available for examination since they were in their normal cycle and had been planted to bloom the following spring. Some of the buyers of the bulbs committed to pay for the 'merchandise' that was buried in the ground and that they could not see at the time of purchase. The excited bidding of November and December 1636 and January 1637 was conducted with no specimens in evidence."

It continues from there. I think you know your history of 1637.

DutchZeroPrinter's picture

But the bubble started because the money supply grew. See book at It was a mania, it was a bubble, but it wasn't global and it wasn't inflated years in a row.

undertheradar's picture

So you would need regulations on the supply of credit? I would argue you would need a more regulated system altogether such as the Bretton Woods system Ghordius was refering to. And the world was different back then. I have my ideas about the regulation of financial markets. We need to get much more conservative, so maybe there we agree. There are many practical proposals out there. Once again, my perspective follows that of many of the regular contributors to nakedcapitalism and Eve herself of course. I think booms and busts are here to stay, but we need to restrain the really big swings. I don't know what will happen if Peak Oil theories turn out to be true. Do you? Can we manage the price level then? Will credit be impossible? Would we have to go to trading cigarettes and other tradables?

Nicholas Wapshott has an excellent book contrasting Keynes and Hayek. But it got a bit boring so I haven't finished it. But it's easy to present some model out of thin air and say it works. The devil is in the details. I am much more practical than that. Even I came up with a credit model at uni though, you couldn't not do a mathematical model and graduate.

undertheradar's picture

I'm working on my Dutch history. I have a few books by Simon Schama on it that I find quite interesting. Dutch culture and history is part of the puzzle and any insights are welcome. They may be challenged ;) We can go back to that part of history, or we can look at and participate the very important dialogues going on about finance and accounting going on at naked capitalism.