How Wopke Hoekstra became Europe’s bond villain
Dutch finance minister has emerged as lead skeptic of European solidarity.
Meet Europe’s Mr. No.
Depending on whom you ask, Wopke Hoekstra is either the blunt embodiment of Northern fiscal prudence or the callous face of European shortsightedness with its foot on the South’s neck.
Either way, as pressure mounts for greater solidarity among European Union countries, the Dutch finance minister has emerged as the man with his finger in the dike, holding back the tide.
Countries like Italy, Spain, Portugal, France and Ireland have called on EU countries to share the fiscal burden from the coronavirus crisis by issuing shared debt in the form of so-called corona bonds or other instruments that would in effect put the Netherlands on the hook for the debts of other countries.
Hoekstra’s strident opposition, first voiced at a meeting of eurozone finance ministers on March 20, has left senior EU figures questioning the future of the European project.
“I admire him for his courage, for his outspokenness” — Johan Van Overtveldt, chair of the European Parliament’s budgetary committee
Iratxe García, a Spanish MEP and leader of the S&D group in the European Parliament, accused Hoekstra of “offensive, ignorant and arrogant” behavior and said he was putting the future of the EU “at risk.”
Italian Prime Minister Giuseppe Conte has cautioned that the risk of the EU’s collapse “is real,” a warning echoed this week by French President Emmanuel Macron, who told the Financial Times that “if we can’t do this today, I tell you the populists will win — today, tomorrow, the day after, in Italy, in Spain, perhaps in France and elsewhere.”
“Either the EU does what needs to be done or it will end,” Portuguese Prime Minister António Costa has said.
For those on the other side of the debate, Hoekstra isn’t a danger to the EU, he’s somebody sticking his neck out to tell a difficult, but necessary message. In addition to the Netherlands, corona bonds — as well as a similar proposal known as eurobonds — are opposed by Germany, Austria and Finland.
“I admire him for his courage, for his outspokenness,” said Johan Van Overtveldt, chair of the European Parliament’s budgetary committee and a former Belgian finance minister.
Corona bonds would be “putting the cart before the horse,” he added, arguing that other elements of the eurozone aren’t yet developed enough to cope with the issuance of common debt.
For much of the past month, Hoekstra has been scrambling to calm the diplomatic waters roiled by his opposition to corona bonds, while doing his best to maintain his hardline position.
It was reports that he had called on Brussels to investigate why some countries were better prepared to weather the coronavirus’s economic storm that elicited anger from much of Southern Europe. Hoekstra says he never referred to a specific country, and later acknowledged he could have communicated better and more empathetically.
And yet, the furor hasn’t stopped Hoekstra from speaking his mind. He was among those opposing debt mutualization during a meeting of the Eurogroup on April 10, which resulted in a fudged deal that unlocked a €540 billion package of financial aid.
“Is the package picture-perfect? Well clearly it isn’t,” Hoekstra told POLITICO in an interview last week. “It is not exactly what we would have made if we had been the only ones. Clearly that is true also for each of the others. But that is the nature of a compromise.”
After the Eurogroup meeting, he came out swinging once again against common debt. “Eurobonds is a thing I wasn’t OK with, I am not OK with and I will never be OK with,” he said.
Tarred and feathered
Hoekstra’s starring role as the antihero of the corona bonds clash comes as little surprise to those who’ve worked with him.
“He is intelligent, analytical, has a lot of foreign experience and carries himself with an air of natural authority,” said Elco Brinkman, the former head of the Christian Democratic Appeal (CDA) party in the Dutch Senate and Hoekstra’s political mentor during his time as senator.
Hoekstra studied at the prestigious business school INSEAD in Fontainebleau and Singapore, worked for Shell in Berlin and became a partner at the consultancy firm McKinsey when he was 36, during which time he also served as a senator before being selected as finance minister in 2017.
He keeps sane between crisis meetings by exercising. The 44-year-old has run marathons, likes to swim and ice skate, and can be found in the gym two or three times a week, according to Elsevier magazine.
“A bit of the irony, if you will, is that he has been very positive always about Europe. He’s always seen the necessity of Europe,” a senior official in Brussels said.
At the same time, Hoekstra is seen by colleagues as being headstrong: As a senator between 2011 and 2017, Hoekstra was the only member of his group to cast a dissenting vote several times, a rarity in the upper house.
“I had to remind him when he started that being right doesn’t mean you always need to be proven right,” Brinkman said, noting Hoekstra “was a quick learner” on that front.
“Politeness to the Dutch is a form of hypocrisy, tinged with cowardice or condescension” — Joris Luyendijk, Dutch author
Because of his habit of refusing to meet ministers when they come to ask for increased spending, top officials in Rutte’s liberal VVD party reportedly refer to Hoekstra as the blokeerfries.
The nickname, which means “blockade Frisian,” is a reference to a group of protesters from the Dutch region of Friesland who were convicted of blocking highways to stop people from protesting the tradition of dressing up in blackface during the Saint Nicholas holidays.
“I would rather do the right thing and leave tarred and feathered than spend my time quietly without getting anything done,” Hoekstra told civil servants when starting his term as minister, according to a profile in Vrij Nederland.
Ever since his first meeting in the Eurogroup in Brussels in the fall of 2017, Hoekstra has been a divisive figure on the European stage, where he’s preached strict budgetary rigor and pushed back against Southern — and more recently Irish, Belgian and Luxembourgish — calls for sharing financial risk.
“I believe that any state that does not make reforms, or uses European funding unwisely, or fails to respect the Stability and Growth Pact, should not be entitled to any more European funds,” Hoekstra said in a speech in Berlin last year, outlining his vision on Europe.
To some extent, his approach is typical of people from the Netherlands, where blunt talk is not necessarily seen as rudeness. “Politeness to the Dutch is a form of hypocrisy, tinged with cowardice or condescension,” said Joris Luyendijk, a Dutch author. “You imply the other cannot take the truth when every Calvinist knows that the truth will set us free.”
Another factor is Brexit. With the United Kingdom’s departure from the EU, Hoekstra has stepped up the Dutch bid to be the bloc’s lead fiscal conservative. Backed by Nordic countries and Ireland, he has resisted any hint of further economic integration.
He painted his position as ensuring that The Hague’s stance gets taken into account in any deal struck by EU countries. “Building compromises is something that’s almost in the genes of Dutch politicians by nature. Compromising is our daily bread and butter,” he said.
Threading the needle
Crafting an economic response to the coronavirus presents the EU with a major conundrum: how to strike a balance between antagonizing Northern taxpayers or leaving the South economically bereft and angry.
Debate about the pandemic response has already fueled Euroskepticism in Italy, where a new poll showed that 42 percent of people support the country leaving the EU — up from 26 percent in 2018. Meanwhile, in the Netherlands, a vast majority of the national parliament supports Hoekstra’s line on financial assistance.
“I think there is a fear that [the EU] might break down if we’re not able to find a solution” — Tara Varma, head of the Paris office of the European Council on Foreign Relations
So it’s no surprise that the deal the Eurogroup struck on economic aid — a €540 billion package of measures, but no common debt mutualization — was not to everyone’s liking.
In an analysis written after the Eurogroup deal, Lorenzo Codogno, former chief economist at the Italian treasury, warned that the initial political signal sent by the finance ministers was “weak.”
“The perception of insufficient solidarity could still fuel anti-European resentment and risk undermining the European project,” he wrote. “But now, it is up to national governments to sell this deal at home as an impressive solidarity move.”
In Rome, Conte has already come out hard against the deal as inadequate.
“We will fight to get the eurobonds,” he said in a televised speech after the Eurogroup meeting, pledging to take the matter up in a meeting of the European Council planned for April 23.
“I will not sign [a statement of EU leaders at the end of a meeting of] until I have a panoply of adequate instruments for the challenge that we are facing,” he added.
Conte has since struck a more measured tone.
The coronavirus isn’t the first time European officials have warned that the EU was staring into the abyss. Since the beginning of the century, the bloc has survived the eurozone crisis, the migration mess and Brexit — all serious blows to the European project.
The question is whether this time will be different.
The reemergence of competing visions between the Northwest and the South is worrying, said Tara Varma, head of the Paris office of the European Council on Foreign Relations.
“The problem of the eurozone is the euro itself” — Derk Jan Eppink, Dutch MEP
For France, the issue of corona bonds is about the survival of the European project. Paris, Varma said, is “pushing more for the Southern vision.”
“I think there is a fear that [the EU] might break down if we’re not able to find a solution,” Varma said.
A senior official in the Spanish government cautioned not to expect a resolution at the European Council on April 23: “It will require a longer negotiation, probably lasting weeks.”
“It seems to me that if we don’t reach an agreement, the reading in many places will be that the EU failed in addressing this problem. And thus this is a scenario we must avoid,” the Spanish official added.
Speaking to the FT, Macron made a similar point: “People will say ‘What is this great journey that you [the EU] are offering? These people won’t protect you in a crisis, nor in its aftermath, they have no solidarity with you.’”
For some on the other side of the argument, however, the debate about corona bonds and European solidarity points to an even more fundamental question: whether economies as different as Italy and the Netherlands can coexist in the same currency union.
“The problem of the eurozone is the euro itself,” said Derk Jan Eppink, a Dutch MEP in the Euroskeptic European Conservatives and Reformists group in the European Parliament and vice chair of the economic and monetary affairs committee.
“It creates more differences than it bridges,” he said. “And we have arrived now at a gap in the eurozone — North-South — that is not bridgeable anymore.”
Cristina Gallardo contributed reporting.