Minister Kaag is a bad, selfish negotiator

Finance Minister Kaag (D66) skipped class during question time in the House of Representatives, preferring to give a speech in Maastricht at that time and repeat one firm promise: ‘We want to be number 1 in Europe. We go further than the plans of the European Commission and aim for 60 percent less CO2 by 2030’.

Kaag did this in order to put a stop to the coming discussions in the cabinet – this harsh statement stands out as the only concrete figure among her meaningless (but beautifully proclaimed in English) platitudes about Europe.

The minister wanted to make the activists of D66 happy a week before an election, but is apparently indifferent that such a claim is completely wrong for a finance minister. In my own three months in the Trêveszaal twenty years ago, I saw Finance Minister Hans Hoogervorst at work.

Hoogervorst listened to the various claims for more money from colleagues, measured how much support they received from the ministers of other parties and then promised that he would ‘look closely at it’, or (more strongly) ‘do something about it’, or (even stronger) ‘would take’. That was competent and collegial.

Kaag’s hard claim

Kaag does it the other way around. While all colleagues are still cautious this week with promises about petrol, energy bills, the loss of purchasing power, and even about the size of the defense budget, knowing that four coalition parties still have to make their decisions, the finance minister is the only one to come up with a tough claim for her D66 hobbyhorse.

If other ministers explain their wishes, and Kaag then claims that there is no money for it, it may be because she has selfishly nailed the D66 desire to be number one in Europe with CO2 at the conference table. This is not how you build cohesion in the cabinet.

Kaag’s claim to nevertheless maintain record expenditures against CO2 despite the war, inflation and the energy crisis is poisonous for the relations in The Hague and also completely wrong and ill-considered for business and the economy.

Eight years of uncertainty

Nobody has any idea how much costs, new rules and prohibitions Kaag’s promise will entail for Schiphol and KLM, for the greenhouses in the Westland and for all companies that then have to move abroad because the Netherlands becomes too expensive for them.

Somewhere in Western Europe we will want to make aluminum; with such an extreme target for less CO2, the minister creates eight years of uncertainty whether this is still economically feasible in Delfzijl or not. (See also the fundamental criticism of Maarten van Andel here in Wynia’s Week).

Minister or party leader?

If Minister Kaag could think less about her position in D66 and more about the business community and ‘ordinary’ people, she would see that CO2 policy with the Netherlands as a frontrunner – already controversial – should at least try to minimize create uncertainty for the economy.

For example, a timeline for CO2 pricing up to 2030 is something that companies can count on and which does not cause unnecessary damage when paralleled with neighboring countries. With a promise about total emissions, where no one can know what that means in terms of concrete measures, especially when 2030 approaches, the uncertainty and therefore the damage to business is much greater.

Same petrol price as in neighboring countries

A good starting point for energy policy is to announce serious measures, but to formulate them in such a way that the damage to business and the economy is kept to a minimum. For example, Kaag can consider calibrating the petrol and diesel here in the Netherlands on an average of our two neighboring countries Belgium and Germany. That would now mean a reduction of about 0.15 euros per litre. A price in line with neighboring countries reduces the risk of smuggling, refueling across the border, and business decisions to give up in the Netherlands.

Harmonization with neighboring countries costs money, because our petrol price is still the highest, and the minister cannot know in advance how much money. But she can easily deal with that uncertainty because the petrol tax is only three percent of the total revenue of the government. We can maintain such a simple rule – petrol no more expensive than in Belgium and Germany – until 2030. A price ceiling or a price guarantee will always be temporary and may collapse if the price of energy rises further.

Customization is not possible here

Suggestions to let the municipalities assess who is eligible for a temporary subsidy for energy costs are also wrong from the perspective that the government should create as little extra uncertainty as possible. Do the municipalities have enough civil servants? Should the tax authorities help?

Does the support go from 200 euros to 0 if someone starts to earn a little more? Do people have to pay back the aid if they have a financial windfall? Much too risky after the scandals with the Tax and Customs Administration to order the civil servants individually tailored solutions.

Rather a simple measure that has no implementation costs. The cabinet could order all energy companies to reduce their monthly advances in exchange for a contribution from the government. A uniform agreement with 38 energy companies seems easier than agreements at the town hall for two million Dutch people with a low income but high expenditure on energy.

War in Ukraine. Children who can’t read well after two years of poor education because of covid. A petrol price to Euro 2.50 per litre. Energy that will cost 200 (soon 400?) euros more per month. Long waiting lists in healthcare due to insufficient staff.

And then elephant Kaag in the china shop at the Hofvijver. Have them ask Hans Hoogervorst to explain to her how you should treat your colleagues as Minister of Finance.

A new, sharp column appears every week Eduard Bomhoff at Wynia’s Week. Do you also support much-needed, independent coverage of Wynia’s Week? Please! You can donate HERE† Thank you!

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