May 30, 2011: some background on the Wilders trial and the developments here in the Netherlands

In this blog post I will try to summarize what happens here in the Netherlands with the criminal case against Geert Wilders. Some very good descriptions in English of the days in the trial can be found at the Klein Verzet Blog. And I contributed a number of reviews and observations myself (in Dutch here) on the more recent trial days.

Wilders in footsteps of Fortuijn: populist and anti-Islam
Starting with Wilders, as a successor to Fortuyn. Wilders is active in politics since the 1990s, then for the liberal party, VVD. He witnessed how Pim Fortuyn succeeded in rallying and mobilizing the disgruntled parts of our people that found that there was too much political attention and care for newcomers/immigrants and that the original Dutch people were being forgotten. As a result, Pim Fortuijn got a significant number of votes but he was not going to live his success as he was killed by a left wing activist. And truth be told, before that happened, some of our politicians were quite keen (and too quick on their feet) to compare Fortuijn and his movement to the developments in the depression times (1930s, running up to the war). This is when the word 'demonizing' came into existence and the impression occurred that the death of Fortuijn was due to the consequent demonizing of Fortuijn by left wing politicians.

Wilders observed Fortuijn and decided to step in his footsteps. And the Al-Qaida attacks since 2001 (as well as the killing of Theo van Gogh, a Dutch filmmaker by a radical Muslim) helped him to play a fear card about Muslims and the Islam. Wilders philosophy is that the Islam is an inherent violent and suppressive ideology and that not only the Muslims are bound to conform to the inhuman/uncivilized rules of the Islam, but all people. Thus, the Islam is the vehicle with which a political war is being fought and we should all recognize this invasion and stop it. He wants the end to the 'cuddling of minority groups' that in his view has gone over the top here in the Netherlands. He wishes that all incoming foreigners should adapt and integrate with the Netherlands and he wants the politics to return to the public again and thus plays the anti-elitist card.

Setting up his own party: he is his own king
Wilders soon found out that his own party, VVD, did not agree with his populist views, so he founded a Group Wilders, and went for political success alone. He founded a party, but chose to circumvent the official rules in a 'smart' way. He founded a party movement where he himself is the only member (chairman, treasurer, secretary, member) of the PVV-association as our election law prescribes that all participating parties in elections should be an association. Thus, Wilders avoided all kinds of trouble with members of his party association wishing to steer his politics. He is himself the king and the party at the same time. And he uses a foundation to gather funds for his political movement. And indeed, this has all the looks of a narcissist

One of the key trademarks of Wilders is that he never wishes to engage in a real discussion. He is very verbal, very able to make cunning and smart remarks in parliament and thus win the hearts of people who think that politics is about saying openly how much you dislike others (other than trying to engage in constructive choices for the country). And he is keen to jump from the one environment (parliament, press, science, court of law) to the other while ignoring the implicit game rules of those environments. So he mistakes the court (where the question is not what is the truth, but does one abide by the rules) for science. He mistakes and uses science (where there is never certainty and always doubt) as the tool to declare that his Islam-vision is the one and only correct one. He uses the media to send out and reinforce his political messages to the public (and to throw in denigrating statements about the Islam and those who follow it). And in parliament he chooses at times to walk out (rather than try and debate about differences of opinion) so that his followers will applaud him, while MPs are annoyed.

Wilders is very verbal and very able to maneuver about. Dutch politicians find it very hard to position themselves against him. So where his idea is that Muslim people should leave the Netherlands, he chose to use the word/abstraction: islamisation to discuss the desired emigration. All people in the Netherlands instinctively understand what he means, but he seldom says it straightforward. The consequence is that it is very hard to pin him down on where his statements are discriminating, racist or hate speech. While he does undoubtedly bring such a message across, as you can see by watching his film Fitna.

As far as his personal life and personality is concerned. Wilders lives under permanent security rules, given possible attacks by radical political adversaries. And we have seen an analysis in a Dutch opinion paper that his trauma is essentially of a postcolonial revanchist nature. Wilders is part of minority himself: the minority of Indonesian immigrants who came to the Netherlands after the second world war. And as this group was forced to assimilate (and assimilated itself due to their cultural background) it may have been the case that this has struck Wilders deeply in his youth. And witnessing that later immigrants were being cuddled more than he/his family was, it is argued that Wilders wishes to impose on them what was 'done to himself'. So the young man that used to be bullied now becomes the bully.

The criminal case against Wilders
Whereas Wilders is a hard act to catch, his public speech at times is discriminating and implying that Muslims are non-humans ('they reproduce like rabbits'). And he creates an atmosphere in which discrimination and rudeness (even in our parliament) becomes the norm rather than the exception. Quite a number of people in the public, as well as organizations that represent Muslims or other minorities have thus complained about some of his public remarks, stating that is was inciting to discrimination and hate speech.

Yet, the prosecutors here in the Netherlands at first did not want to take up these complaints. So the complainants appealed, which lead the legal court in Amsterdam to order the Public Prosecutor to start a criminal case against Wilders. Wilders at first wanted the best criminal lawyers, Anker&Anker. In response to Wilders request to make a public carnival out of the trial, they informed Wilders that hiring them would mean: 'no publicity during the trial', Wilders left them and chose to hire Mosckowicz, a lawyer that is often in the media (perhaps even more than in court). This is of course in line with his strategy to always play his political game simultaneously in public, parliament, media and court.

The trial started last year, with Wilders often remarking that it was a political trial. Exploiting the publicity. And there were some legal and procedural mishaps, with made it possible for his lawyer to send the first Judges back home (it turned out that one judge of the Amsterdam court had been present and possibly influenced a witness of the Wilders-trial during a dinner, a couple of days before the trial-date). So all the proceedings had to wait and a new court with new judges was assembled and assigned. But at that point, we already witnessed something very particular. The Prosecutor effectively did not want to prosecute and demanded acquittal on all counts of the criminal case. In doing so, the Prosecutor messes up the due process that we need in the court.

An interesting thing that also occurred during the trial is that civilians and complainants may join in the criminal proceedings so that they can be granted a compensation for damage. And most of them ask a sum of 1 euro. But the group of complainants is quite diverse. There are some solid legal arguments put forward by some lawyers, while the rest of the complainants acts in a personal manner. Which may feel good for them, but is not legally relevant. Yet, this varied bunch does create an image in which the trial doesn't seem to be important/true/real. So it helps Wilders to frame the trial as a 'fake trial' in which judges protect each other.

What I find interesting during all the proceedings is that Wilders is using very much the freedom of speech argument to be able to say what he wants. And he says that 'the lights will go out in Europe' if he is convicted. Thus stating that freedom of speech is more important than any other human right. The argument is used in an opportunistic way however, because since then, we have witnessed Wilders and his party limiting the freedom of speech of all those that were against them. So the image of Wilders as the proclaimer of freedom of speech has bleached considerably.

What is remarkable as well, is that the trial is essentially a clash of the two fundamental human rights that nation states should seek to protect/enact. One is the freedom of speech but the other is a prohibition of discrimination/hate speech. Both of course have an effect on the quality of democracy. And the essence of the trial is that these two human rights need to be protected/enacted in a balanced way. And the trial demonstrates, in my view, that Wilders is only executing his fundamental rights and does not wish to abide with the obligation (not to discriminate). And with the people in the Netherlands in flux about the statements of Wilders, I think the court of Amsterdam has chosen wisely to order the Prosecution of Wilders. Only such a prosecution and court case will make it clear if Wilders has crossed a line, or not. And the facts and material at hand, is sufficiently substantial to do so. Again I would encourage the readers to have a look at the film Fitna.

Current state of things in the trial (May 30, 2011): rushing it too much
As promised, the lawyer of Wilders has made it a carnival. Rebutting/challenging also the second set of judges. Declaring that the case should not start ('niet-ontvankelijk) and so on. But all that was brushed aside and the court was considered independent to continue. Also, the court listened to some extra witnesses to discover that whatever happened at the dinner (before the first trial) was not legally relevant to the case (although the court considered it very unwise of the judge to be present at the dinner). So last week, we finally started.

On Monday, the court summarized the case, presented the facts, and also outlined some international relevant law, including  considerations on the European legal framework. At last, we were now dealing with the facts.  And to me it became clear that the choice to prosecute is very fundamental and important. This is an important court case that will determine the extent to which freedom of speech can be exercised, until it turns into discrimination or inciting hate.

On Wednesday we could witness the Prosecutor, not prosecuting but effectively defending Wilders. The Prosecutor used an intermediary test to determine if what Wilders said or published wash criminal or not. The test was whether the statement was intrinsically divisive and conflictual in nature. Yet, all statements and context discussed lead the Prosecutor to conclude that acquittal was the only conclusion. In doing so, the Prosecutor rebelled against the court that had ordered the law suit. And they now made it more difficult for the court itself as well as for the civilians that wish to file compensation claims in this criminal case. Any soccer game requires two teams. And by siding with Wilders, the flow of justice (and exchange of arguments and counter arguments) is not guaranteed.

On Friday the civilians that complained could substantiate their compensation claims. But, they weren't allowed to comment on the case itself. This led to a strange situation where one lawyer, Prakken, outlined that the basis for the claim constituted a different reasoning than that of the Prosecutor. The judges were, after being incited by Mosckowicz, keen to alert her to stay within bounds, but she held her ground properly. And stated that the prohibition against incitement does not build on discrimination but is a separate human value that deserves protection by and through its essential nature. In my view a very convincing argument, and better at times than the flawed vision of the Prosecutor.

The overall impression that I was left with, on Friday, was one of a rush. Having watched the proceedings via Internet, it became clear to me that the judges want the case to be done with. And that is a bit unsatisfactory, as it is an essential case and theme. And with a prosecutor that does not prosecute, the court judges are burdened with the obligation to determine themselves if or not they agree with the prosecution arguments.

And today we're back on Monday (30th of May). Wilders lawyer, Moszkowicz, of course compliments the Prosecutor for a solid piece of work. Thus creating a setting in which Prosecutor and defendant agree, and making it hard for the Court to disagree and condemn Wilders. The first bits of the argument by Moszkowicz were a recollection of the strange proceedings until so far. And as we speak, he is still throwing all kinds of arguments. And what struck me in his arguments, is that he is effectively responding to all kinds of arguments, but never developing his own line of thought. And least of all is his recognition of the fact that two fundamental democratic values are at stake here. Which is perhaps what one can expect from a defending lawyer, but it still creates an uncanny setting.

Last words by Wilders
As is the custom, Wilders has had the last word in his first instance of the trial. He immediately used it to make political statements. And in doing so, he provided evidence to the court that he will use any instance to voice his vision (which is exactly one of the elements of hate speech: the repetitive and consequent manner in which a suspect incites to hatred and unjustified discrimination). And I am confident that we will see some of this in a few moments, when again he will be offered the opportunity to make a statement.

Whereto from here?
In my view, the prosecutor has not done sufficient effort to make the criminal case against Wilders. There is a lot of material in which there are clear signs of Wilders' hate speech and demonizing of the Islam (and implicitly all followers/believers). Yet we haven't come round to properly discussing it in this case. And in this very important case for our democracy we are now faced with a court that wishes to speed things up. I am not confident that this is the best way forward.

If I look at the replies/reactions on Twitter during the case, I can see a lot of harsh and rude comments, some of those outright violent. While it would not be fair to argue that Wilders is the cause of all these arguments, he has indeed been creating (and thus legitimizing) a climate for such comments and visions. Also he is providing a bad example by continuing his denigrating talk with respect to Muslim people (calling them 'cattle that votes' in Parliament). And while it is up to the MP's to correct him in Parliament, it is also up to the Dutch courts to determine if he's gone too far in inciting hate.

So, it is only too bad that we may be rushing this trial forward where it might be better - both for us and for our democracy here - to take our time to properly consider pros and cons.

[Update... June 2, 2011: I returned home yesterday to discover that Geert Wilders mentioned Johan de Witt in court on June 1, during his trial. He mentioned de Witt in his plea for freedom and tried to model himself after my example. That inspired me to write him a letter in which I lecture him on fundamental rights, democracy and so on. That letter is too Dutch to translate, but my response essentially was that Wilders poses as a member of parliament but he does not act responsibly like one. Leading to the conclusion that: an ape 's an ape, a varlet 's a varlet, tho' they be clad in silk or scarlet.]


Appointing the new President and two directors of our central bank: butterfingered fiddling with an aftertaste of sprouts...

Well, the dust has now settled in the Netherlands on the announcements with respect to the new President and directors of our central bank: De Nederlandsche Bank (DNB). It is clear that our Minister of Finance, de Jager, has appointed one of his own top-managers, Klaas Knot, as the next President of DNB, to succeed Nout Wellink. And Jan Sijbrand (former NIBC and ABN AMRO), is to become the Executive Director in charge of Supervision. And as a result of the clumsy process, one of the internal DNB-candidates, Lex Hoogduin, who was proposed/favoured by the Supervisory Board, drew his conclusions and decided to leave. So what we can also read in the press release of DNB is that a third new appointment is announced: that of Frank Eldersohn, who will be Executive Director in charge of the 'internal operations'; the day to day functioning in organisational/HR terms.

Let's review this appointment process from a distance, drawing on the numerous reports and bits of work that are available with respect to the functioning of DNB, AFM and financial supervision.

First some colours in the background
Traditionally, both DNB and the Authority Financial Markets (AFM) were given quite some leeway in how they organised their business and executed their constitutional supervisory roles. The consequence was that the AFM developed a policeman-style under Chairman Arthur Dokters van Leeuwen. His successor, Hans Hoogervorst, combined this approach with a political savyness and unnecessary PR-agressiveness. Hoogervorst used publicity incidents to hurt banks in their image and bashed the banks into his prescription: an academic frame-of-mind in which consumers are rational, yet deserve paternalistic protection from overcrediting and in which any form of kick-back is to be eliminated in the marketplace. I am afraid that the AFM is going to need quite some years to discover that they were wrong in assuming the consumer rationality and that they will in the end discover that the elimination of kick-backs means that financial advice for consumers has become far too expensive (and thus: out of reach) for the consumers. So through enforcement of their academic yoke, they will eventually make financial advice more costly, cumbersome and less available to the public at large. Similarly, we will find out in about 5 years -when the market has come to a complete standstill- that they have been beating to loud on the mortgages drum.

Now for DNB. While the AFM is noisily supervising the banks, DNB kept up their appearences in their old-fashioned supervisory stile in which banks are invited over for a cup of tea to discuss business. Whereas AFM was showing too much teeth, DNB showed too little. And that had an effect on the cooperation between the policing AFM and the ever-so-polite DNB. And then DNB got traumatized in 2006, by the failure of Bank van der Hoop. From that moment on, all things in DNB-life became legal. External advisors advised on each step of supervision, thus paralyzing DNB. DNB became afraid to move at all and also got stuck under the spell of Wellink. Wellink was in the Board since 1983 and had arrived at his second 7-year term. Which is impractical, as it is impossible to organise the required internal criticism and openness for such a long period. It just doesn't work as we can see from the examples of Kohl, Thatcher and Lubbers. As a consequence, the oil-tanker DNB was not able to respond promptly and properly in discussions on the ABN AMRO take-over, the failing of Icesave and the demise of DSB. Our readers should note however that it is not so helpful for the central bank to be surrounded by inconsistent and populist claptrap on complex banking issues. But that's all part of the game, so as a President you have to be able to handle that as well.

Our Ministry of Finance meanwhile lacked all vision on how to organise financial supervision. And I know this sounds harsh and crude, but it is a simple fact. Our independent Court of Auditors reported their amazement about the fact and the response of our Ministry was: our supervisory policy is embedded in the Law on Financial Supervision (WFT in Dutch). Well, the connoisseurs of that law will shrug their shoulders, smiling politely. Because the WFT is a beautiful, idealistic legal project that had the potentially to become a great legal structure for the financial sector, also through the nuanced use of open standards. In practice, however, every chapter of the WFT-law was introduced in a hurry so at present there is literally no understanding it any more. If we would consider the WFT to be a computer-application, it would be immediately classified as a spaghetti-bomb and a threat to business-continuity, requiring a comprehensive revamp and structural re-engineering.

Equally important is the fact that in the late nineties the internal organization of Finance was overturned. While the former Ministry would have a department dealing with the financial sector as such, the new departments were split up on the basis of regulatory aspects such as: stability, market conduct, generally and so on. This led to less visibility and understanding of the impact of legislative changes for the sector as such. Thus, the sector was facing a Ministry that looked like a conveyor belt pushing out partial amendments.

Change, but how?
It is clear that the above institutional and supervisory framework is not sufficiently apt to deal with large market shocks and changes. And it is not surprising that the various players in the field reflected on the best way forward. So there were reports of what had happened on DNB's supervision (report Scheltema). Politicians came up with an examination (de Wit), largely a rehashing of international reports. The banks founded a Maas Committee that emphasized in the final report the importance of good governance, stronger risk management and a more integrated assessment of societal interests. And the Ministry of Finance started thinking about a supervisory policy version 0.1 or 1.0.

What surprised me was how the discussion on the desired culture-change at DNB took place. This followed from the report Scheltema, but everyone could know that for such a change to have effect, it is necessary to embed it in a good institutional structure and to be supported and spearheaded by a good leader: the President himself. I looked with increasing astonishment at the senseless rush that was displayed by all actors in the play. Within one month an implementation plan for cultural change should be made. And while DNB met this request of parliament without complaint, it goes without saying that this will have absolutely no effect whatsoever. Because the President, spearheading the change, was going to be replaced in a years time.

While in the Netherlands we were discussing and pondering the above, our Government fell apart in February 2010, which meant that no ravishing or fundamental changes could be expected. Still, it appeared that our Ministry of Finance had decided that their links to supervisors AFM and DNB should be strengthened. So they colluded with Members of Parliament to obtain the discretion to guide and demand action from supervisors (without the realization that the WFT does not really allow them such an action). Furthermore, the Minister of Finance quickly said he was changing the appointment rules for Presidents to a maximum of one re-election. In doing so he inelegantly and unnecessarily bruised Wellink. And our Minister became more responsible for the succession planning at DNB, which requires a forward-looking approach.

The appointment process of the President and directors of the Dutch central bank (DNB)
What I noticed last year is that the tone of voice and the noise-level of publicity by the AFM appeared to decrease, already while Hoogervorst was still running the AFM. The penalties for banks were lower and the public reactions of banks with respect to the behavior of the AFM were milder. Hoogervorst was sent on (or perhaps: off) to his beloved international work. And at the same time the Ministry of Finance appointed his Treasurer, Ronald Gerritsen as the new Chairman at the AFM. Which brings the Ministry of Finance closer to the fire. 

As for DNB, there is of course the weekly lunch-meeting de Jager and Wellink. I imagine that early-on they discussed how to organise the succession. And it must have been obvious that Hoogduin was the intended successor, as such a preference (of the Supervisory Board) doesn’t suddenly fall from a blue sky down. Yet, both Wellink and De Jager will have noted that Hoogduin had little track record in Bank Supervision. And my idea is that the Ministry of Finance proposed a division of responsibilities between supervisory and monetary policy, so that Hoogduin could be appointed as new president of DNB. And that part of the succession planning proceeded nicely: Parliament agreed with the idea and we moved on.

But then, in May things suddenly went wrong. The discussion on succession hit the streets, the public and parliament. This surprised me, but also allowed me a moment to share my views on my preference. But the Members of Parliament did not want Hoogduin to be the next DNB-President as he was no outsider and could thus not be the one to spearhead the culture change at DNB. And then, one of the three candidates, Kremers, also stepped out of the race. To him, the Supervisory Board of DNB was unable to outline clearly what his position would be (no doubt this was a discussion on the relationship between the President and the almost independent director of Bank Supervision at the DNB).

What struck me was that we were very much running out of time. It was May, while we needed a President as of July. And you don’t want to be choosing your next central bank President in such a time-squeeze (it seems that shows such as Idols and X-factor even use more time to pick their winner). Anyway, we went through somewhat indistinct and misty weeks, to find out that one of the other top officials of Finance, Knot (who has a DNB-ring to him as he worked their for many years) will become our next President at DNB. With former Crown-prince Hoogduin choosing to leave, because he undoubtedly envisaged his future to be different than it now had become.

The net effect of all this fiddling: there are suddenly two new directors and a new President at DNB as of July 1, 2011. And do note that Klaas Knot is not really an outsider. He originally worked for the Insurance Supervisor and had a quick career at DNB for some 10 years. He became the right-hand advisor of Wellink in his international meetings/work. And a number of years ago he was appointed as a top-civil servant at the Ministry of Finance, possibly as part of a master plan in which Wellink arranged his long-term succession (or simply just took good care of the career of his closest advisor). Now, with the butterfingered public discussion on the succession and role of Hoogduin underway, the choice for Klaas Knot was advanced in time (he might have been on the schedule to succeed Hoogduin). And my guess is that the lack of enthousiasm of Knot for internal and organisational matters may have led him to outline that he didn’t wish to take up the ‘internal affairs’ portfolio of Hoogduin as a part of his role of President.

What struck me is that perhaps Kees van Dijkhuizen and Nout Wellink may have still played important roles behind the curtains. The new director supervision of DNB is currently working for NIBC, (the same bank where van Dijkhuizen is CFO). So both Wellink and van Dijkhuizen, may have each supported their trusted candidates/protegees in view of their qualities. And those qualities certainly do not need to be questioned as the competences of both Knot and Sijbrand speak for themselves.

What I do have a concern about, is that the new management at DNB may get a structure that was focused on the old idea of Hoogduin as the new President. And there now is a separation of the domain of internal affairs and organisation (Eldersohn), Bank Supervision (Sijbrand) and general management and monetary affairs (the President). If the DNB-improvement for the future lies in a cultural change, it is clear that this requires leadership from the future President. But that President is not directly responsible; his two Directors are. And that is a rather unfortunate organizational setting. Furthermore, Knot may not be willing to tighten the knots for his old colleagues when doing the cultural/organisation change. Nevertheless, with sufficient quality, coordination and perhaps a good fresh breeze in the organisation as a result of the new Director Supervision, we should just hope for the best.

Incidentally, I should also mention that the Supervisory Board has not made any statement at all. It appears to me that the unhealthy intervention of the Ministry of Finance with respect to the succession of the President (not a minor job) does not bode well for the future. And this is the same Ministry that formally provides the Supervisory Board with very strong powers in the future. In my view, it is strange to have a Ministry doing your job as the Supervisory Board, so I am amazed that none of them respond or resign. It’s a stunning silence that we can witness, which seems to imply that the Supervisory Board Members rather stick to the status and prestige of being the DNB-Supervisory Board Member than to the content of their job: ensure proper governance at DNB.

Conclusion: butterfingered fiddling with an aftertaste of sprouts...
If we look at the importance of proper supervision and a good central bank in a country, we must realize that DNB is a central element of the most vital (financial) infrastructure in the Netherlands. And that means we must do our utmost best to maintain this infrastructure and to ensure that is and will be functioning properly. I am therefore quite surprised about:
- the lack of debate on financial supervision and resulting institutional structure (the right for a Minister to mandate specific action to the Supervisor is absolutely undesirable),
- the faulty structure imposed on DNB (the split of responsibilities between supervisory director and president, the unworkable role for the Supervisory Board)
- the stunning silence that from the Supervisory Board, now that their preferred candidate has not been chosen and decided to leave,
- the outright poor planning, timing and limited secrecy surrounding the reappointment process. The fact that the process became public domain didn’t do anyone good and was quite awkward to observe, leaving some of the people involved with a bit of a stain on their image.

We can conclude that we have now effectively already built in the core structural weaknesses that will give rise to future incidents with respect to DNB and Bank Supervision. It's all quite embarassing given that the essence of government is planning and designing ahead in order to prevent incidents and structural weaknesses, rather than to ensure them.

For now I am left with a sense of shame about how we have executed this succession planning process in the Netherlands. If my English vocabulary and Google Translate are correct I could qualify this as a major bit of butterfingered fiddling that leaves an aftertaste of our beloved Dutch sprouts. It makes me realize that the Netherlands is too small in size and population to be able to achieve the proper professional levels necessary that suit a mature democracy and financial market. That is a bit depressing, but that’s the way it is.

Of course the biggest role of the Netherlands in the financial world stems from the Golden Age. And since then we were in decline until former President Vissering lifted us up by his international stature and authority. Similarly, Duisenberg was special and President Wellink has done an incredible good job (although in the end hindered by a monoculture within his own organization). But alas, if we continue conducting ourselves the way we have been doing recently, we can be certain to slide away into a pragmatist way of doing that certainly does not justify a place at the international financial conference tables.

With only ourselves to blame for that.


Dutch coalition has to lean on PVV and SGP for support of government...

Today was the day that the Dutch Members of the Provinces voted for the Members of the First (Upper) Chamber of Parliament. Traditionally this is called the 'reflection' Chamber, because it is not so much a political arena as the Second Chamber. It's role is, traditionally, to ensure quality of rules, rule-making and check the fundamentals of law. Only on occasion do the discussions in the First Chamber lead to parliamentary crises.

Well, as you can read here, it turned out that the current minority-coalition of VVD and CDA has failed to win an outright majority of seats in the upper house of parliament, or senate, according to the latest prognosis from Nos television. Even when combined with the PVV, the result is a mere 37 seats, which means that the coalition alliance (VVD, CDA and PVV) is still one seat short as the Chamber has 75-seat Members.The SGP has publicly stated however, that it will tend to support the coalition. And their support was of course much helped by the withdrawal of support (by VVD) for legislation which lifts the ban on blasphemy.

As a result, Prime Minister Mark Rutte is now facing the most serious balancing act since a long time. Rutte needs the support of PVV in the Second Chamber (Lower House) and needs the PVV for that.  Meaning he has to side with a party with strong anti-islam sentiments, that wishes Greece to step out of the euro and so on. And in the First Chamber (Upper House) he sides with the SGP, that has the political position that women should not be active in politics (and should focus on their maternal tasks primarily). And this is quite a combination... leading us in the Netherlands into ad-hocracy territory, due to the minority character of our governing coalition. And we haven't had situations before in which each government issue/thema had to be battled for independently in the Chambers. So we're up for some Realpolitik here in the Netherlands.

We should note however that this outcome is essentially doing proper justice to the outcome of the elections for the Upper and Lower House here. The Dutch were strongly divided, which resulted in a situation where it was no longer clear how to form a majority-coalition. So the voters have condemned the politicians to cooperation, despite their strong differences of opinion (and sometimes unagreeable manners or political views on other subjects). And it remains to be seen if this will be accompanied with proper conduct in the Houses of Parliament or whether we will see more name-calling and pub-talk. So the end result is that the voters have gotten what they represented: a divided caretaker government that will steer on a day-to-day basis, and will be unable to steer on long-term policy goals or to achieve fundamental changes.

I am curious to see if our Prime Minister, Mark Rutte, will succeed in his balancing act. Time will tell.


Will history repeat itself....?

One of these days I was wondering if we weren't heading towards a similar situation as in the run-up to the crisis. A prolongued period of low interest rates. Asset bubbles. Tech-stock and IPO's all over the place. And so on. And I recalled that one of the earlier FSF-reports had some good lines on that matter. The Report on Market and Institutional Resilience in April 2008 noted:

The turmoil in the most advanced financial markets that started in the summer of 2007 was the culmination of an exceptional boom in credit growth and leverage in the financial system. This boom was fed by a long period of benign economic and financial conditions, including historically low real interest rates and abundant liquidity, which increased the amount of risk and leverage that borrowers, investors and intermediaries were willing to take on, and by a wave of financial innovation, which expanded the system’s capacity to generate credit assets and leverage but outpaced its capacity to manage the associated risks.

What I found interesting in the aftermath of the report and its follow up, is that most attention focused on what banks, supervisors could do, but that central banks were kept out of the discussion and follow up. While the man in the street started taking up all the technical discussions in the report (on perverse renumeration inventives, capital buffers, securitisation that got out of hand, US housing market deficiencies), the role of central banks never made it to the spotlight of political discussion. Yet, it is clear that the central banks, providing easy money, played a very important part (as recognized by the words: including historically low interest rates).

And now, three years down the line, we have all fastened seatbelts with all kinds of regulations for banks, against short selling, increased buffers for Basel, risk tax for systemic institutions, new liquidity frameworks, harsher credit rating agencies and so on. But central banks maintain low policy rates that got us here in the first place.... so that makes me wonder: will history repeat itself?

We will soon find out.


Saga continues: PVV-party hangs flag of NSB (old national socialist party) in Parliament rooms... then deny...

Last weeks, the Dutch remembered the 4th of May, the day of liberation from the German oppressor in 1945. With that, there were quite a number of analysis around outlining and comparing the current populist movement (and freedom party) of Wilders with movements in earlier time. This very much annoyed Wilders and his party-members who wanted all those comparisons banned from tv, paper, website and so on (thus outlining that their freedom of thought/speech is only meant for themselves).

Today, Spitsnieuws shows this foto, in which two Dutch flags (with orange banner instead of red) are seen hanging in the PVV-rooms in Dutch Parliament.

Orange-White-Blue flag seen hanging in PVV-room in Dutch parliament

Our foreign readers should note that this flag has been forbidden in the 1930s somewhere, because the national socialist party NSB (Hitler-fans in the Netherlands) started using it as a party symbol as the flag essentially refers to a period in time when the Netherlands kicked the Spanish out (Historic News outlines that it also came in use in South Africa during the apartheids-regime). Questioned about this today over the radio, the PVV denies that this all happened.

At present the PVV is firmly denying that the flags even hung out there. While another inside source is ready to outline that the flags were hung out there, but it was never intended to refer to the NSB or second world war period. The idea was to refer with pride to the earlier days of the Netherlands, when we were a more important country then now. But, those who hung the flags might have been unaware of the more recent connotation and reference to the NSB.

Well, there you have it, this is Dutch politics and PVV in optima forma. Let's look at the two possible explanations here and let's note that the the group feeling in the group PVV-MP is tight (and may even come close to groupthink):

1- As Geert Wilders is currently very much annoyed and angry about the comparisons with the pre-worldwarII time, so will his followers. Confronted with the comparisons with Worldwar II, I imagine they feel wronged by the comparisons and out of anger felt: 'Well, if they compare us with the 1930s populist movements, we might as well behave as such'. In this possible explanation we need to appreciate that this behaviour equals that of a wronged school boy. And one could imagine a school boy who is punished for doing something wrong, receives punishment. Then, given that he has already got the blame and the punishment, the boy continues to milk out his punishment by continuing the obstinate behaviour that he was punished for.

2- The group PVV MP's feels misunderstood. They are battling for a clean, beautiful Netherlands, with freedom for all but all of Dutch press and society appear now to be against them and don't share their goals. But luckily some spirits within the PVV-fraction in Parliament still know what they are fighting for. They want the Netherlands to once again become the country that it was: a country that with pride and confidence stood up for itself against a foreign oppressor (in this case not Spain but Islam). So to improve the group morale in these harsh times (when the party's goal: freedom of speach is in fact counteracted by the PVV itself and gets a lot of criticism) some MPs chose a symbol that might unify them and remember them of their worthy goal: the old Dutch flag from the 16th century. In doing so, they lacked the historical awareness and education to remember the other connotation of the flag: the NSB.

By the way, the reasoning above may also hold true for the party emblem that the PVV uses (thanks to @Tibeart and historisch nieuwsblad). This is their stylized gull and the text: Party for Freedom:

Now, let's have a look at one from the NSB (with the text in white: Does thou desired Freedom or Servitude.. and in black: Freedom, only through the NSB):

So, whichever of the two explanations best fit the real situation of this moment, both are equally surprising and amazing.

PS (12.05). While Wilders himself now remains invisible with no comment, his 'thought leader' Hero (yes, that seriously is his first name) Brinkman twitters that he is glad that the flags are now gone (and were meant to refer to the Dutch golden age)... meaning that explanation 2 might have been most accurate.