Newspaper article The Christian Science Monitor

Will Europe Go Dutch? Vote Last Week Endorsed Prime Minister's Formula for Growth with Social Benefits

Newspaper article The Christian Science Monitor

Will Europe Go Dutch? Vote Last Week Endorsed Prime Minister's Formula for Growth with Social Benefits

Article excerpt

The Dutch are showing the rest of Europe how it can keep the welfare state alive, while also creating an American-style lean and mean economy.

The winning formula was endorsed by Dutch voters last week with the reelection victory of Prime Minister Wim Kok's Labor Party.

His recipe? Keep a generous social system while injecting flexibility and incentives into the labor market. Mr. Kok has cut unemployment and disability benefits so that it no longer pays better to stay on the dole than go to work. He also has pushed through rules making it easier for companies to hire temporary and part-time workers. But the government still supplies free public health care and pays students to attend university. "We want to be good for those who need support, but not for those who can really take care of themselves," the silver-haired prime minister explains. "This country must be strong and social," Kok adds. The combination works, say analysts. During the past four years since Kok took power, more than 500,000 jobs have been created in this northern European country of 15 million people, and unemployment is down to an almost American level of only 5 percent. Kok's left-wing Labor Party gained eight seats in the May 6 parliamentary vote, boosting its total to 45 in the 150-seat legislature. Its senior coalition partner, the right-wing Liberals, won seven seats, for 38, while their junior partner, the centrist Democrats 66 Party lost 10 of its 24 seats. They are expected to hold negotiations on forming the next government. To its partisans, the Dutch model demonstrates how reform can be achieved without a Thatcher or Reagan-style purge of the welfare state. Other small European countries, such as Denmark and Austria, also have succeeded at forging a consensus to keep wages down and increase labor flexibility. "Small countries have learned to deal with increased international competition by building on labor consultation," says Jelle Visser, a sociology and labor relations professor at the University of Amsterdam. But because of its size, the Netherlands' success may not be relevant to European giants Germany and France. Both are struggling with double-digit unemployment and problematic public deficits. Here in Utrecht, the main shopping street, Steenweg, is packed with eager customers who take a break by sampling everything from Australian ice cream to the more traditional Dutch chocolate. Casual is 'the Dutch way' Kok arrived on foot for a pre-election debate without a single bodyguard. "That's the Dutch way," an aide explains. The setting was a cafe where Kok mingled with the youthful customers. In this compact, cozy, and consensus-obsessed society, democracy still resembles a New England town meeting. No Dutch prime minister rules alone. Even though he won a big victory, it could take Kok weeks to form a new coalition government. …

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