Finance

Clash ministries Hoekstra and Wiebes over plan European emergency fund

The discussions heated up in the autumn of last year, when the cabinet had not yet resigned and the elections were still a long way off. The Ministry of Economic Affairs and Climate (EZK) coordinated the preparation of a Dutch plan for obtaining European aid.

This was against the wishes of the Ministry of Finance, according to documents released after an appeal to the Open Government Act (Wob).

Finance wants to put treasury in order

The Ministry of Minister Wopke Hoekstra (CDA) tried with all its might to prevent additional investment plans from being made, according to the analyzes sent to then Minister Eric Wiebes (EZK, VVD).

These are plans on top of the investments that were already agreed when the budget of millions for 2021 was drawn up, writes a high-ranking official from EZK.

The money from the Recovery and Resilience Facility (RRF) should be used for finances to cover already planned expenses. This means that the European aid billions are only used to repay the national debt, concludes EZK.

EZK wants to invest extra

At the Ministry of Economic Affairs and Climate, they want to make extra plans to pitch to the Commission. Extra investments help the economy to recover from the corona blow and prevent ‘long-term permanent damage’. And that is also good for government finances, the EZK official argues.

Minister Hoekstra is going hard, according to the documents. “Finance tries to have a political discussion about [het herstelplan] in the Council of Ministers and to hinder the commitment to additionality (additional investments, ed.)”, the official reported to Wiebes on September 24.

Finance wants control

The Ministry of Hoekstra is aiming to take decisions about the recovery plan in future in a consultation in which not all ministries involved participate. In this way, finance seems to want to prevent additional investment plans from being devised.

There is not only this substantive difference of opinion, Finance is also trying to get control over the submission of the recovery plan itself, the official reports. It was agreed in the summer of 2020 that EZK will do this. “Finance is now (…) trying to take over coordination against these agreements (…),” the official writes.

Minister Wiebes reassures his civil servant with a handwritten remark: “This battle seems premature to me!”

“It will only come to the next cabinet,” he continues. “Let’s not argue too much about non-existent projects for money that isn’t there for now.”

Homework shifted

The VVD member, who left The Hague in January because of his role in the allowance affair, already knows that no application will be made from the Netherlands for the elections in March 2021. In order to make such an application promising, a country must meet strict requirements.

These demands came at the insistence of the Netherlands, to force European countries to get their affairs in order, so that fewer problems arise in the next crisis. The Netherlands itself must also comply with these requirements, which means that reforms must be made in the housing and labor market.

The cabinet is passing these politically unpopular measures on to their successors, officially so as not to get in their way with plans they might not like. That argument makes no sense, however, according to an advice that was already sent to Wiebes in mid-September last year.

No new reforms

The officials point out the rules for the recovery plan that make it possible to adjust the plan. This option exists if the plan cannot be achieved due to matters beyond the cabinet’s influence, such as elections that have already been called.

This option is being ignored, as already on September 18, 2020, it will be decided during a ministerial meeting not to implement any new reforms. And so Wiebes thinks the entire discussion with the Ministry of Finance is a waste of time.

No point in discussion

“I don’t understand this piece”, he responds to an official note that must be signed. “The next cabinet will determine whether and how it will use any resources – only then will the expenditure be relevant.”

“Why should we now have a fundamental discussion about this money being spent on one or the other, even now that there is no suitable spending target yet? Why!”, he writes.

On the formation table

That discussion is currently being conducted by the four parties negotiating a new cabinet. There it must also be decided which reforms the Netherlands will implement in order to obtain approval from Brussels.

To do this, the mortgage interest deduction will probably have to be phased out more quickly, the outgoing cabinet recently reported. The battle over who does the coordination seems to have been settled. The last letter to parliament with news about the plan has only been signed by Wopke Hoekstra.

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