Dutch Prime Minister Dick Schoof has been rebuked by his parliament. EPA-EFE/REMKO DE WAAL

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Dutch reject EC’s debt-driven €800bn rearmament plan

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Dutch MPs have voted against the new European Union defence plan, ReArm Europe, because it was based on shared debt among EU countries, raising Dutch concerns about sovereignty and fiscal responsibility.

A slim majority of 73 against 71, including three of the four Dutch coalition parties, opposed European Commission President Ursula von der Leyen’s proposed €800 billion plan, just a week after the Dutch Government endorsed it in Brussels, despite being aware of internal discontent.

Introduced by the Dutch right-wing JA21 party, the motion against the defence plan received support from the Party for Freedom (PVV), the Farmer-Citizen Movement (BBB) and the New Social Contract (NSC) party.

Centrist NSC party President Pieter Omtzigt explained his vote by saying he “fundamentally opposed the idea of Eurobonds”.

“A new debt crisis would be a disaster,” he told parliament.

Omtzigt stressed that he and his party supported Ukraine in its war efforts and a stronger European defence but that this needed to be done on solid fiscal footing, not on new debts, an approach shared by most other parties.

Eurobonds are proposed debt instruments issued jointly by eurozone countries, denominated in euros, to pool borrowing and share financial liability across the region, typically to fund collective projects.

Critics argued that pooling debt risked weaker economies “free-riding” on stronger ones, forcing prudent nations including the Netherlands to subsidise potentially reckless spending.

It was seen as undermining national accountability, potentially encouraging fiscal irresponsibility and clashing with the principle of limited government intervention in markets. It also raised concerns that it could accelerate EU centralisation, reducing individual countries’ control over their budgets.

Von der Leyen proposed the lifting of the debt brake for defence spending for up to €650 billion, using the escape clause of the Stability and Growth Pact which, in normal circumstances, should keep deficits under 3 per cent and the size of government debt less than 60 per cent.

Another €150 billion would be made available in loans by the EC to the capital market and then loaned to member states for joint defence projects.

“We are once again navigating into the trap of collective debt,” Joost Eerdmans of JA21 said about the scheme.

“When it comes to the €650 billion, a blind eye is turned to the 3 per cent deficit norm. The reins are being let loose there. Poor countries are allowed to build up debt again. We have a problem with that because it will lead to inflation and a weak euro.”

About the €150 billion, he noted it would be a general debt for all of Europe, co-guaranteed by the Netherlands.

Eerdmans referred to what had happened with the Covid recovery fund. “We put in €20 billion and lost €16 billion on it. There’s simply a great danger that the rich countries will have to pay for the southern countries.”

On the NSC website, it was noted that a country such as France, with a deficit of 5.5 per cent of GDP and a national debt of 110 per cent of GDP, was now far from the European requirements the Netherlands adhered to.

“The debt of over €3,200 billion could become a millstone. Further loosening the reins could lead to major and acute problems, especially if a recession hits, for example, due to a trade war,” it said.

Eric van der Burg, of the majority Liberal VVD party, said the vote was “irresponsible” because it made the country renege on an earlier agreement.

Frans Timmermans, leader of the GreenLeft–Labour alliance, said three of the four coalition parties threw Prime Minister Dick Schoof under the bus, calling the cabinet “rudderless”.

Laurens Dassen, of the Dutch chapter of the Volt political movement that operates on a European level, said that in opposing the Rearm Europe plans, the Netherlands now put themselves in line with Hungary.

Left-Liberal D66 party leader Rob Jetten said Schoof would be “left in his underwear” after he had already pledged Dutch support, despite objections within his coalition.

The motion was supposed to be addressed in the Second Chamber la few days ago but this was postponed because JA21 leader Joost Eerdmans was stuck in traffic and could not be present for the vote.

PVV leader Geert Wilders stated earlier that if the parliament approved Eerdmans’ motion, Schoof would have to return to Brussels and officially state that the Dutch opposed ReArm Europe.

“That’s how it should be in a democracy,” he said, suggesting that Schoof should have sought parliamentary approval beforehand.

How the Dutch Government would act in Brussels was set to be discussed by the Council of Ministers on March 14.

Elsewhere, France is organising a European summit in the week starting March 17 to discuss further defence co-operation.

Most European countries have supported the EC’s plan, with Germany in particular shifting from its previous stance and now being much more open to debt.