Do not put our exports at risk

 

Last year I was invited to a dinner with Roger Bootle. He was presented to me as a 'respected voice' in British financial circles. I was looking forward to it. During the meal, Bootle held a fanatical plea for British withdrawal from the EU. I confronted him with counter-arguments, such as the impact on British exports to the EU. Bootle got irritated and became increasingly angry. The dinner turned unpleasant and I left early, which rarely happens, so as to avoid a fight.

Roger Bootle is managing director of Capital Economics, which published a report on the Netherlands and the EU. In the same way as Bootle wants a British withdrawal (Brexit), he advises the PVV to pursue a Dutch exit from the EU, the so-called NEXIT. Instead of sounding like a 'respected voice', Bootle actually sounds like chief economist for the UK Independence Party UKIP, led by Nigel Farage, which preaches Brexit. The recipe is more drastic for the Netherlands than for Britain. By exiting, the Netherlands would not only leave the single market, but also the Eurozone and the Schengen zone for free movement of people.

According to Bootle there would be some 'transitional problems', but the Netherlands would then have more advantages than disadvantages from 2035 on. Britain and The Netherlands wouldn't pay any more money to the EU budget, abolish unnecessary EU legislation, conduct their own immigration policy, re-introduce the Dutch guilder, and the EU would offer both countries a favourable trade agreement. The Netherlands would then turn into a Switzerland at the North Sea.

This vision is economic daydreaming. If the Netherlands leave the EU, they must negotiate a new trade agreement with the EU. It is an illusion to think that Brussels will be generous to the Netherlands, one of the founders of European integration, as regards trade relations. The Netherlands export annually €120 billion to the EU. That creates 1.5 million jobs in mostly small and medium-sized enterprises. Once the Netherlands exits the single market, all that is at risk. Bootle says it would be 'churlish' if other countries disadvantage the Netherlands because of NEXIT. There are plenty of churlish pirates on the borders of the Netherlands who stand to profit from closing of the Dutch export sector from foreign markets.

Whoever negotiates in Brussels should be well aware of this principle: if you are not at the table, you are on the menu. Germans and Austrians want Dutch trucks on their roads to disappear sooner rather than later. Antwerp and Hamburg would like to take over the trade Rotterdam loses in case of a NEXIT. Frankfurt airport has always seen a competitor in the hub function of Schiphol. The Netherlands win diplomatic battles in Brussels as a small country by relying on internal market legislation, such as free movement of goods. A NEXIT would automatically put the Netherlands on the menu.

A lack of practical understanding runs like a thread through the report. Bootle says that the Netherlands will have an independent monetary policy again with the guilder. But even before the introduction of the euro the Dutch weren't able to, because the guilder was pegged to the D -Mark. Nor can Bootle say whether the guilder will depreciate or appreciate after NEXIT. In the first case, there will be a capital flight; in the second, Dutch exports will be much more expensive. Conclusion: The Netherlands must link the guilder to the euro! Why exit then? The Netherlands are better off at the negotiating table, urging for reform along with, among others, their German and British allies.

Bootle paints a Swiss status for the Netherlands. NEXIT The report was published before the Swiss referendum on immigration quotas, which immediately led to a cold war between Bern and Brussels. Germany and France seek fiscal reprisals to rob the Swiss economy of its main commodity, banking secrecy. The German tax authorities are hunting for prominent tax evaders like Alice Schwarzer, leader of German feminism, who parked her millions in Switzerland. Switzerland has voted itself into the black books.

Bootle should have limited his report to a study of Venlo, birthplace of PVV leader Geert Wilders. Venlo has a 'Trade Port' foundation that benefits from the disappearance of borders, European distribution, and smooth, unobstructed exports. The Limburg border town has ten international transport companies, an export-oriented fruit and vegetable sector and receives a great many shopping day-tourists from Germany. For Venlo the European single market is vital. Apply the Bootle and Wilders' NEXIT on that and see what is left of Venlo.