The fall of Rutte IV – changing dynamics for the Netherlands in Brussels

The collapse of the Rutte IV cabinet and the announcement of Prime Minister Rutte’s resignation will not only have a profound impact on the Dutch political landscape but will also have consequences for the position of the Netherlands in Brussels. The question now is to what extent the Netherlands will lose influence in Brussels, as its influence has substantial enlarged on several issues in recent years. In this blog, colleagues Mike de Wit and Valérie Mendes de León reflect on some policy implications of the fall of the Rutte IV cabinet.

Bridge-builder in Europe: in person and in policy

Despite facing pressures on his image in the Netherlands for some time, Prime Minister Rutte (VVD – Conservative Liberals) had gained more esteem and appreciation in Brussels as one of the longest-serving European leaders. Rutte’s mediation skills and ability to forge compromises were valued. His role as “bridge-builder” was further strengthened after the departure of the British from the European Union. This constructive role was most recently evident in the EU-Tunisia deal on migration, where Rutte acted in tandem with the Italian Prime Minister Meloni, forming a symbolic alliance with a Southern European country that often takes opposing positions to the Netherlands. Although the speed and feasibility of certain policy matters may be less assured due to the fall of the cabinet, the Council still believes that, partly due to Rutte’s involvement, the completion of this dossier is still realistic before his departure.

Another recent example of the government attempting to leverage its influence is the role of the Netherlands in European budget policy, as laid out in the Stability and Growth Pact. Under the leadership of D66 (Liberal Democrats) Minister Kaag (Finance), the Dutch government had adopted a new role in ongoing negotiations on the Stability Pact, despite the traditionally fiscally conservative nature of the Dutch government. While the core interests of the Netherlands remain unchanged – such as sufficient debt reduction in countries with a debt exceeding 60 percent of GDP – this time, the Netherlands took a more proactive stance. Last year, The Hague even collaborated with Madrid to put forward joint reform proposals – again, with another Southern member state that, like Italy, often stands in opposition to the Netherlands and is also currently in an uncertain election period.

In Brussels, the combination of fiscal conservatism together with a constructive attitude as an advocate of cooperation was warmly received. However, after the resignation of Prime Minister Rutte, this position is now at stake. European Commission officials are concerned that the Dutch and Spanish elections could slow down the progress of the deal. The Council’s goal was to achieve a general approach on the reform of fiscal rules in December (when the Council establishes a position) and conclude the trilogue negotiations in the spring of 2024 (the phase where negotiations take place between the European Council, the Commission, and the European Parliament). This is now a greater challenge.

Complex position of caretaker ministers and departments

In the months ahead, caretaker ministers, state secretaries and the civil service will experience limitations in their ability to act decisively and maneuver in the Brussels arena.

This is partly because the caretaker cabinet will no longer be able to commit to a number of – controversially declared – policy objectives from the beginning of September and the increased influence of the House of Representatives on Dutch position-taking: the cabinet can no longer always count on coalition support and will have to gain support for each step. This can, for example, hamper the necessary negotiating room on issues on which the Netherlands is divided, as is the case with issues such as the Asylum and Migration Pact or agriculture and nature legislation.

Another important part of Dutch policy formulation and its engagement in Brussels are the so-called BNC fiches (‘Assessment of New Commission Proposals’) that ministries prepare when the European Commission publishes new proposals. Such a document outlines the Dutch position on the issue and also discusses, for example, the assessment of proportionality, feasibility, and subsidiarity of the proposal. However, despite the caretaker status of the cabinet, it is expected that this will not have a significant impact on ongoing matters and processes at the European level. Ministries can still prepare new fiches to inform the House of Representatives, which can then judge and guide the cabinet.

An example is the proposal for a Digital Euro, which the European Commission published on June 28. It is currently expected that the corresponding BNC fiche will be sent to the House of Representatives this summer. However, as the Commission’s mandate is about to expire, and European elections will also take place in 2024, fewer major and new legislative proposals are likely to be published in the autumn than usual. In terms of timing, this works out well for the Netherlands.

Process during and after the departure of ‘Teflon Mark’

In the coming months, several significant European legislative processes need to be resolved before the European Parliamentary elections in June 2024. Some of these processes involve the Netherlands aspiring to take a leading role and are therefore interesting to follow in the coming months. These include the above-mentioned new European asylum policy, the revision of budgetary rules, the introduction of European legislation on International Corporate Social Responsibility (CSDDD), the reform of the European fiscal system, the reduction of pharmaceutical prices in the Pharmacy Package, the expansion of the Schengen area with possible access to Bulgaria and Romania, which is likely to be postponed to the frustration of these countries, and the promotion of the Green Deal, among other priorities of the Spanish Council Presidency.

Concerning one of the most significant and far-reaching dossiers, the Green Deal, the Netherlands played a prominent role with Frans Timmermans (PvdA – Labour Party), the European Commissioner for Climate and Executive Vice-President of the European Commission. Timmermans has also announced his departure, which means the Netherlands will lose another heavyweight in Brussels. Timmermans intends to return to Dutch politics as the lead candidate of a joint PvdA / GroenLinks (Labour Party / Green Party) list, and he will need to be replaced by a new Dutch Commissioner. Who that will be and which portfolio they will get will be a significant puzzle and remains to be seen. Not only does President of the European Commission Ursula von der Leyen have a crucial say in this, but the cabinet also plays a key role in nominating a new Dutch Commissioner. Given the caretaker status of the cabinet, it may be necessary to consult with part of the opposition regarding this appointment. Moreover, it is conceivable that the Netherlands may have to settle for a less significant portfolio.

EU diplomats are keeping a close eye on The Hague because the Netherlands is not known for forming governments quickly. With elections in November, a new cabinet is likely to be formed at the earliest in the spring of 2024, with consequences for both European policy-making and the impact the Netherlands can make. However, there are ample opportunities for the Netherlands to develop a renewed vision and strategy, set priorities, and form new alliances under a new cabinet after both the Dutch and European elections. At this moment, it is all the more important for businesses, organizations, and governments to communicate their priorities in a timely manner in both The Hague and Brussels.

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