The Economist: Misreading the public mood can be costly when the government owns your bank, as the directors of ABN AMRO found out last week. The bank has been in the hands of the Dutch state since it was bailed out in 2009 as part of the global financial crisis that also dumped Royal Bank of Scotland in the laps of British taxpayers. The Dutch government had hoped to begin privatising ABN AMRO this autumn—until the news broke that the bank’s directors had awarded themselves a salary bump of €100,000 ($107,000) a year. An outcry in parliament led the directors to forgo their raises and Jeroen Dijsselbloem, the Netherlands’ finance minister, to postpone indefinitely the bank’s return to the markets.
The directors’ error of judgment is perhaps understandable. As in Britain, public sentiment in the wake of the collapse was furious with fat-cat bankers. But the Dutch board had been correspondingly cautious. The directors receive no bonuses, and their raise had been approved by parliament in 2011 but renounced each year until now.
Why, despite the good economic news, is the Dutch public mood still sour? Partly because of a problem that many European governments face: they have not delivered the policies their constituents were promised. The Dutch government, like the German one, is a centrist, two-party grand coalition. In the 2012 election, leftists voted for the largest centre-left party, Labour (PvdA), in opposition to austerity and the dismantling of the welfare state. Conservatives voted for the largest centre-right party, the Liberals (VVD), in opposition to redistribution, Europe and immigration. What they got instead was a Liberal prime minister, Mark Rutte, at the head of a hybrid government whose horse-trading led to an unsatisfying mix of policies.
That Dutch government has carried out a series of far-reaching reforms which have left nobody entirely happy.
Confusingly, voters have scattered in all directions.
It all chimes oddly with a brightening economy. The government’s reforms, disruptive at first, have started working, says Dimitry Fleming, an economist at ING Bank. “People feel we have seen the major necessary reforms, so policy uncertainty is diminishing.” House prices and residential investment are rising. Exports are up. The tulips are sprouting. Maybe public enthusiasm will too.
