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The Netherlands: An EU Country That Works

Prague, 7 May 1998 (RFE/RL) -- Yesterday's resounding endorsement by Dutch voters of Prime Minister Wim Kok and his Left-of-Center Labor Party constitutes strong popular confirmation of what analysts have been saying for some time: The Netherlands is today, along with Britain and Ireland, a strikingly healthy exception to the economic ailments most other European Union members states have suffered from in recent years.

Dutch voters have clearly now adopted that view as well, reflecting popular contentment with the economic good news the coalition led by Kok has brought in the past four years. Final results from the balloting, in which 22 parties competed, showed the Labor Party garnering 40 percent of the vote, raising its representation in the 150-member Parliament from 37 to 45 seats. This is the biggest such single jump in a major party's popularity in recent Dutch history.

At the same time, Dutch Center-Right Liberals, with whom Labor has ruled since 1994 in the so-called Purple Coalition --Labor red melding with Liberal blue-- also made impressive gains. The Liberals boosted their parliamentary delegation from 31 to 38. Only the Centrist Democrats '66 Party, the third member of the outgoing coalition -- which frequently bridged policy gaps between Labor and the Liberals, but seldom got credit for it -- suffered a setback. D66's parliamentary group was reduced by almost a half, from 24 to 14.

The voters demonstrated Dutch political as well as economic health in their choices yesterday. Support for extremist, protest and special-interest groups diminished to the point of no return as voters went largely for the mainstream parties, whose record obviously pleased them. The Netherlands' largest extreme-Right party, the xenophobic Democratic Center (CD), lost all three seats it had won four years ago, thereby ripping up what Kok in 1994 described as a "black page" in the country's history. And parties representing the special interests of the country's retired voters, with seven seats in the old parliament, also saw their representation reduced to zero.

In the early 1980s, the Netherlands was a bloated welfare state, losing more jobs than it could create and increasingly unable to compete internationally -- a familiar syndrome in most EU members even today. Then, in 1982, Dutch pragmatism took over. Through protracted negotiations among labor unions (Kok was their chief negotiator), employers and the government, the country's now much-praised economic model was set up. It was based largely on a careful paring away of welfare-state benefits by the state and an understanding between labor and management that traded wage freezes for job-creation. Both policies are still largely in place today.

Even so, economic crisis in the Netherlands and elsewhere in Western Europe in the late 1980s and early 1990s prevented any dramatic improvements. It also led to the unceremonious booting out of power in 1994 of the Christian Democrats, who had led Dutch coalition governments for the previous 76 years. Yesterday, the Christian Democrats were reduced to 26 parliamentary seats, making them now only the third largest Dutch party.

In the four years it has been in power, Kok's Purple Coalition has come close to fulfilling one of its -- English-language -- campaign slogans: "The Netherlands: An EU Country that Works." It has reduced unemployment from 8.1 to under 5 percent, less than half the current overall EU rate (10.5 percent). Kok has more than fulfilled a 1994 campaign promise to create 100,000 jobs a year, while the country's giant neighbor Germany has lost half-a-million jobs in the same period. Along the Dutch-German border these days, it is German workers who come seeking jobs in the Netherlands, not the other way around, as it was 20 years ago.

Other important economic indicators point up why so many urge the so-called Dutch model on other EU members. Last year, the Netherlands had a 3.4 percent economic growth grate, one of the EU's highest, exceeding both Germany and France. Predictions for this year speak of even further growth, perhaps as much as 4 percent. And with a budget deficit of only 1.4 percent, the Netherlands easily met the toughest criterion for joining the EU's new single currency, the euro.

But all these rosy figures tend to conceal grey economic areas often conveniently forgotten by boosters of the Dutch model. At 2.2 percent, the Netherlands today has one of the EU's highest inflation rates, and its public debt far exceeds the euro zone's criterion. Even more important, official Dutch jobless figures -- like those of so many other EU members -- are also questionable. Many of the newly created jobs are only part-time -- indeed, one-third of all Dutch jobs are less than full-time -- and citizens are classed as unemployed only if they are less than 57-and-a-half years old, work less than 12 hours per week and are registered in government jobs offices.

This means that, in a population of 15.5 million, only 329,000 people are officially out of a job. But in fact more than a million Dutch men and women, almost 15 percent of the work force, are looking for jobs of more than 12 hours a week. That's one big reason why last year's report of the Netherlands Central Bank, while hailing the economy's success, admitted -- in the report's words -- that "this success is only relative (to the rest of the EU)."

Could less economically healthy EU members adopt the Dutch model, or at least learn from some of its concrete successes? Most analysts believe much could be learned from the Dutch, particularly in paring down welfare-state benefits without impoverishing recipients and creating so many part-time jobs, likely to be increasingly necessary in many EU nations. In fact, others are learning from the Dutch because Kok and many of his ministers have extensively briefed their counterparts in many EU nations on the Netherlands' methods.

But analysts tend to doubt that larger and more heterogeneous states like Germany and France could take over the entire model. That's because they believe the Netherlands' successes owe much not only to the homogeneity and relative smallness of the country, but also to its ingrained tolerance, pragmatism and bent for consensual solutions. These national characteristics, they say, can not be reproduced overnight, or even over a generation or two, in other West European societies with very different traditions.