Dutch MPs support EU emergency fund

24th March 2011, Comments 0 comments

A wide majority in parliament supports the government’s plan to contribute billions of euros to a permanent European emergency fund at an EU summit in Brussels on Friday, and act as guarantor for many billions more. Only the Freedom Party and the Socialist Party are opposed.

The permanent emergency fund is to become operational in 2013 and contain 750 billion euros, 500 billion of which are to be contributed by the Euro zone countries. The Netherlands will make a contribution of 4.5 billion euros and act as guarantor for an additional 35 billion.

The current temporary fund, which was used to bail out Ireland, will remain operational until 2013. The Netherlands currently acts as guarantor to the temporary fund for an amount of 26 billion euros. Prime Minister Mark Rutte called the permanent emergency fund a “sign to the financial markets” that the 17 euro zone countries would stand united in times of financial crisis.

Parliament also agreed with plans to tighten the Stability and Growth Pact SGP, which stipulates that euro zone countries must keep their national debt below 60 percent of their GDP and their budget deficit below three percent. A failure to do so would automatically result in substantial fines. The SGP also includes arrangements intended to make Europe economically more competitive.

Mr Rutte persuaded waverers to vote in favour by arguing that Europe can force member states to put their budgets in order, but could never dictate the exact nature of concrete measures. The Freedom Party called for a referendum on the amendment to the EU treaty necessary to facilitate the creation of a permanent emergency fund. Prime Minister Rutte rejected holding a referendum, for ‘principal as well as pragmatic’ reasons. He argued it was no more than a technical change involving no more than one sentence in the current Treaty of Lisbon.



© Radio Netherlands Worldwide

0 Comments To This Article