‘Frugal four’ chief Mark Rutte leads opposition to EU recovery plan

Dutch prime minister Mark Rutte long relied on Germany to champion EU fiscal discipline, pushing back on integrationist attempts to mutualise debt or relax deficit rules. On Friday, he will face off against German chancellor Angela Merkel in resisting a Berlin-backed spending plan to help the EU recover from its gravest recession.

Mr Rutte leads a group of four member states that are opposed to handing out €500bn in grants to the countries most severely hit by the Covid-19 pandemic. With Berlin now allied with Paris in backing the plan, he is threatening to scale it down by demanding loans only and more stringent conditions to the aid.

In the Financial Times on Tuesday, Mr Rutte and the leaders of Austria, Denmark and Sweden called for a “realistic level of spending” and for all the money to be paid back. On Friday, at a video meeting of EU leaders, the so-called “frugal four” alliance could be joined by Baltic countries and eastern member states in voicing their criticism at parts of the recovery fund. 

Amy Verdun, professor of European politics at the University of Leiden, said Mr Rutte had used the quartet to improve his standing in the EU after Brexit and show that The Hague was not isolated on key economic issues. “Rutte has been the leader of the Frugal Four,” she said. “He enjoys it.”

Mr Rutte’s voters at home do too: a poll in March showed the centrist prime minister — at the helm of his third government after a decade in power — was considered to be the country’s greatest prime minister of the postwar era.

But the political landscape at home is shifting and limiting his room to negotiate in Brussels. His four-party coalition no longer holds a majority in the Dutch parliament and Eurosceptic forces have been quick to seize on signs of the government agreeing to hand over taxpayer money to southern European countries.

A recent poll for Dutch newspaper Volkskrant from I & O Research found that 61 per cent of Dutch voters did not support the EU recovery plan as proposed by the European Commission. Resistance was highest among voters on the far-right. Only 4 per cent of voters said they were happy with the proposal. “It’s not just Italy and France who have populists; we have them too,” said one Dutch diplomat. 

A composite of the 'frugal four': from left, Sebastian Kurz, chancellor of Austria; Mette Frederiksen, prime minister of Denmark; Mark Rutte, prime minister of the Netherlands; and Stefan Lofven, prime minister of Sweden The ‘frugal four’: from left, Sebastian Kurz, chancellor of Austria; Mette Frederiksen, prime minister of Denmark; Mark Rutte, prime minister of the Netherlands; and Stefan Lofven, prime minister of Sweden © FT Montage/AFP/Getty/EPA

Lodewijk Asscher, leader of the opposition Dutch Labour party, said Mr Rutte had failed to use his enduring popularity to make the case for bolder financial relief for other EU member states.

“He could have used his political capital to be part of a solution in Europe, not the problem,” Mr Asscher said.

The 53-year-old Mr Rutte will be making his case safe in the knowledge that he has the backing of his coalition, which includes the conservative Christian Democrats (CDA), whose finance minister Wopke Hoekstra has often taken an even tougher line than the prime minister’s People’s Party for Freedom and Democracy (VVD). 

“The discourse of this government has always been that the Netherlands pays more on a per capita basis into the EU budget than anyone else,” said Ms Verdun.

National elections in March next year have emboldened EU critics on the conservative right. The CDA is in the process of selecting a new leader and is fighting off the threat of anti-EU populist Thierry Baudet.

Mr Baudet had previously called for the Netherlands to leave the eurozone. His far-right Forum for Democracy (FvD) came joint first with Mr Rutte’s VVD in municipal elections last year.

CDA officials say the party’s leader will be instrumental in either pushing the mainstream right further towards Euroscepticism or back towards the moderate centre.

Mr Rutte’s right-of-centre party meanwhile is riding high in the polls, winning plaudits for its management of the pandemic and opposition to the boldest parts of the EU’s economic recovery effort. Last month in the European Parliament, VVD MEPs aligned with the far-right Alternative for Germany and Rassemblement National during a symbolic vote against fiscal stimulus. 

Malik Azmani, the VVD’s leader in the European Parliament, said the “frugality” versus “solidarity” debate was a “false contradiction”.

“Making sure we spend our taxpayers’ money wisely whilst finding a way out of this crisis together is showing the kind of solidarity that we need to recover in a sustainable way,” Mr Azmani told the Financial Times.

The dominance of the two right-leaning coalition parties has overshadowed the only avowedly pro-EU party in the government, D66. Rob Jetten, party leader, said D66 was a moderating force in the government and helped soften Mr Hoekstra’s tough stance.

“After first refusing to talk about anything else than reform and past Italian mistakes, the government has now accepted the principle of EU borrowing, large-scale investments and has welcomed the introduction of certain European taxes,” Mr Jetten said.

Mr Rutte would probably climb down on parts of the recovery package, which diplomats expect to be sealed later this summer, Ms Verdun said. “Rutte’s domestic and EU record shows that he does often give in . . . What matters for him first is to create room for a deal and show he is a credible player who has to be reckoned with. It is part of the strategy.”