Albertine Bloemendal

A week after the Obama administration released its Strategic Defense Review and in anticipation of the upcoming NATO summit in Chicago in May, Dutch Defence Secretary Hans Hillen was in the United States to discuss budget cuts in defence spending as well as the development of the F35/Joint Strike Fighter.

After meeting with his American counterpart Leon Panetta, Secretary Hillen spoke at the Atlantic Council in Washington DC on “how the Atlantic alliance can keep its triple A status in an age of austerity.” Hillen’s answer was threefold: 1) NATO needs to adapt to new strategic realities, 2) it needs to substantially deepen its defence cooperation and 3) it has to secure public support for the alliance through political will and leadership. The main focus was on the importance of defence cooperation, especially in Europe.

Hillen promised the Netherlands would take a leading role in intensifying defence cooperation in Europe, something he has been pushing for a while now. Last November, Hillen initiated a debate on this topic in the Dutch parliament in which he pleaded for a fresh and pragmatic approach to the idea of sovereignty, which was not well received by Geert Wilders’ PVV. The Dutch Defence Secretary called for a ‘relaxed’ discussion and promised the Netherlands would lead by example, hoping to inspire other European countries to deepen defence cooperation from the bottum up. Joint investment and procurement should be the starting point.

Approached from this angle, Hillen was actually able to present recent trouble with the development of the JSF/F35 [see HB post JSF - Hanging In There] as one of the most promising opportunities for closer defence cooperation in a time of austerity: the ‘price problem’ has created a platform for cooperation between the Netherlands and countries like Denmark and Norway to think about collaboration in the fields of acquisition, maintenance “and perhaps even in the field of operations”. He identified the ‘formality’ of NATO as the biggest obstacle to success. (“If you’ve ever been to a NATO meeting, it is so formal, so dreadful…”). “Relaxation” was to be the key word, Hillen declared (about seven times), without it nothing would be possible.

With regards to his last point – the importance of public support for NATO – it seems that Hillen may have some reason to be relaxed: the Dutch Atlantic Association (Atlantische Commissie) just released the outcome of an opinion poll by TNS/NIPO concerning Dutch opinions about NATO and Dutch security which shows that 79% of the Dutch think NATO membership is important to their security and 73%  believes that NATO offers a positive contribution to the Dutch-American relationship. Furthermore, only 15% of the responders were in favor of more budget cuts in the defence realm.

While many Europeans have expressed concern about the American defence strategy’s change of focus from Europe and NATO to Asia and the Pacific, Hillen declared he was optimistic, saying he regards the American document as “a commonsensical response to a rapidly changing world.” According to him, America’s growing strategic attention towards Asia is a very logical development. It does mean, however, that Europe, for its part, will need to pick up more of the burden when security problems arise on its own periphery.

“It is obvious that the European and American continents are drifting apart,” Hillen said at the end of his speech. “This has been going on for some time, it is impossible to stop and will result in closer proximity of the US to the Far East than to Europe. The good news is that this is only a geological fact and that our tectonic plates only drift apart with a speed of two centimeters per year.”

Max Smeets

In the previous post on Dutch cyber policy the ‘collaborative nature’ of the Dutch approach was briefly discussed. Another interesting aspect worth briefly considering is the digital defense budget.

Already before the summer, in April, the government projected a gloomy prognosis for the Dutch defense sector. It was announced that the Netherlands would cut around 17% of all defense jobs, and scrap a considerable chunk of military equipment (including some F-16’s, tank battalions, and minesweepers).

Against this backdrop, it sounds more positive that the government doesn’t cut on cyber security measures, as written in the budget statement of the Ministry of Defense for the year 2012 released two months ago. To be more specific, the armed forces budget for cyber operations for the coming year is estimated to be around 2 million Euros and about 50 million Euros for the entire 2012-2015 period.  Good news?

In all seriousness, who truly believes that the cyber domain will be safer in 2012 with investing a mere 2 million? Although one can buy a nice villa for this money, what kind of extensive measures can be taken with this kind of money to enhance cyber security?  (For a nice benchmark to compare this number with, please take a look at the post ‘JSF: Hanging In There’ below) The Dutch government wants much cyber security but offers almost no money to cover it.

Unfortunately, nothing is stated about this in the budget statement of the Ministry of Defense. In point of fact, up to now, to my knowledge, no government publication exists that provides information on where the money is exactly invested. Perhaps they can employ a handful of people for the money, and rent a room for them?

To sum it up, perhaps one could capture the worrying security situation in the cyber domain by drawing two graphs on a whiteboard.  The first line, the slowly implemented measures on the Dutch government, can be drawn as a linear line with a positive but small slope (with ‘time’ on the horizontal axis). At the same time, however, the function behind the likelihood of a cyber attack is an increasing exponential one – as the offensive capabilities of cyber criminals or other state actors increase rapidly. Hence, the Dutch government should start to realise that slow, step-by-step improvements in the cyber domain simply result in a widening of ‘the cyber prevention gap’.  With a mere 2 million investment in 2012, I sadly enough take for granted that the cyber security analysis Netherlands (CSBN) presented next year will again indicate that the number of cyber attacks has increased.

[Thanks to AirPowerAustralia]

At the end of November a devastating report entitled the “F-35 Joint Strike Fighter Concurrency Quick Look Review” was issued by the Pentagon. An up-t0-date assessment of the JSF’s current status, it identified 13 issues that required serious attention. The Penatagon being the Pentagon, these were split into three intricate groups:

1) Five involved this: ”major consequence issues have been identified, but root cause, corrective action or fix effectivity are still in development” (i.e. we don’t know what the problem really is);

2) Three involved this: “potentially major consequence discovery is likely pending outcomes of further discovery” (i.e. these small problems could turn out to be big problems);

3) Five involved this: “consequence or cost is moderate, but the number of moderate issues poses a cumulative concurrency risk” (i.e. see 2 above).

The report’s main conclusion was that the practice of ‘concurrency’ – procuring a weapons system before it has actually been developed and tested – has reached excessive proportions. While many Pentagon projects involve this business method, the sheer scale of the JSF – around $385bn for development and production alone, followed by a further $1tr to keep the thing in the air for a decade or two – has required an unusual amount of up-front government investment before the project is even proven to be fly-able. And the longer this goes on, the more the costs rise and the more costly it becomes to cut your losses and run. 

The extent of the Dutch commitment was once again exposed in the aftermath of the report going public, with Ben Knapen stating in parliament on 6 December that the purchase of two test aircraft will still go ahead in 2012-2013 as planned. He nonchalantly added: “It is logical, understandable, and advisable to follow the developments in the US closely, but there is nothing in particular to report.” Knapen defended the fact that the concurrency approach was known from the beginning and was necessary to allow all partners to contribute to the aircraft’s development. The final decision on yes or no for the JSF has, in classic Dutch style, been postponed for the next cabinet to decide. Meanwhile around 1.5bn Euro has already been pumped into the project despite no definitive decision. In January 2011 Hans Hillen announced that the price of each aircraft would be 59.7m Euro, instead of the 47.4m Euro that was pitched only in 2009 – and this is the basic price, with the necessary extras bringing it up to about 100m a piece. 

Naturally, the opposition is steadfastly opposed to this new version of transatlantic ‘burden-sharing’, with Groenlinks leading the leftist pack of PvdA, SP, and D66 in calling for the whole thing to be dropped. The PVV remains, inevitably, the wildcard, having abandoned the oppositional pack just over a year ago. The party went into the June 2010 elections rejecting any JSF test aircraft but abandoned that stance as part of the support agreement for the minority VVD-CDA cabinet. Whether the PVV will stick to this agreement is another matter. For the moment, with no electoral consequences attached to it, they do.

Meanwhile, positive news for the JSF’ers came in from a relatively unexpected quarter – Japan, which announced a week ago that it will probably join this elite club as part of its own defence upgrade. In May the message coming out of Japan was that the Lockheed Martin JSF could be dropped in favour of either the Eurofighter or Boeing’s F/A-18 Super Hornet.  The decision, committing between $6 to $8bn for around 40 aircraft to be delivered by 2016, is clearly a response to stay ahead of China’s ballooning defence budget and the introduction of its own stealth fighter, the Chengdu J-20. Even so, considering the recent misery from the Pentagon about project delays, the decision was something of a surprise.

But the Japanese decision also puts the Dutch position in stark contrast. Japan wants 40 aircraft in a region of the world facing a serious high-tech arms race escalation. The Dutch Ministry of Defence says it wants 85 for……..well, that is the question.

[Thanks to vRRitti.com]

Ok, its perhaps long overdue, but its time for some kind of an assessment of the whole Netherlands-Wikileaks circus. Both NOS and the NRC-RTL team have been churning out documents and analysis for more than two weeks now, so there’s space for a little perspective.

1) Wikileaks means status – who has the documents, has the juice. On Friday 14 January the NRC presented the parade of Wikileaks documents as “a rare peak behind the scenes of political and diplomatic The Hague in a time of crisis.” Gold dust (and a journalist’s wet dream) in times of declining newspaper sales. Why else would newspaper De Pers pull such a ridiculous stunt to actually fake a US Embassy cable from 11 January 2011? Competition is fierce. The NOS went much further than the NRC, giving us two weblog accounts of how the tv news outfit got their hands on the documents. The competition was not spared either – The Volkskrant clearly didn’t try hard enough, the Algemeen Dagblad lacked credibility, and the NRC played dirty to convince the Wikileaks crowd that their offer was the best (“tv station RTL…has a broad public and is very reliable since its not state-funded as NOS”) before cheating by obtaining the cables from Aftenpost instead (and then running their first headline on an alleged four-word comment by Beatrix on Afghanistan - cheap? Noooooo!) But the NOS saw it to the end and received the USB after dealing with none other than svengali Assange himself. Editor Hans Laroes can’t resist giving away that he feels one of the Media Elite: The Guardian, the New York Times, and NOS: “Not bad, NOS….We are quite proud.” Little Netherlands joins the Big-Time Club. Check out how it was announced on the news: ‘This is the USB we received personally from Julian Assange!’

 2) Proud of what? Proud of getting the inside story on how the Americans see the little old Netherlands. But also proud of possessing the proof that this small part of North-Western Europe does still count for Washington DC, contained in 3021 cables sent between 2000-2010. Would the same excitement be there with German cables, or Chinese, or Russian? I doubt it – the cables are predominantly a reassurance that the US, the major ally, still apparently cares what plays out in The Hague.

3) This is confirmed by the main subject-matter of the cables: The Joint Strike Fighter and Afghanistan. In both cases the Dutch are seen as key players within an amalgamation of other partners. If the Dutch say yes, others will follow. So its been since the beginning of NATO – Dutch loyalty and credibility as a partner of the US does really count. But aside from that confirmation, there is precious little in the JSF / Afghanistan cables that was not already known. Sure, the US determination to get the Dutch to sign up and keep signing up for the JSF gives quite an insight into how important this particular arms trade deal has been in bilateral relations. Sure, the pressures within the PvdA in 2009-2010 on Uruzgan are now fully exposed. Wouter Bos, the main obstacle to a renewal of the Uruzgan mission, was the US Embassy’s target man, and together with top Dutch civil servants they sought out every possible channel to lean on him. Bos actually comes out of the story well, prepared to compromise despite being in a very tight spot with his party.

But we knew all of this before, thanks to intrepid investigative journalism by Joost Oranje, Argos, Vrij Nederland, and other sources. The top levels of the Dutch foreign affairs bureaucracy have quite a tradition of choosing the consistency of a close alliance with the US over any domestic political obstacles. Wikileaks has just added some nice new quotes to the story. And while other reports cover the ever-increasing activities of the Drug Enforcement Agency in the Netherlands since 2005 – with or perhaps without the full knowledge of the state prosecutor – details of this have also come out before, particularly in Vrij Nederland. But it does make good tv.

4) So where is the new stuff? Two areas stand out.

One concerns the in-depth interest the Embassy had in radicalisation within the Dutch muslim community. After the ‘Dutch 9/11′ of the murder of Theo van Gogh, 2005-2006 saw the creation of an Integration Issues Working Group and the mobilisation of contacts with muslim opinion leaders to improve the image of the US and facilitate the integration of muslim groups in Dutch society. The mix of direct US national security interests and the promotion of ‘mutual understanding’ is profound in this case.

The other concerns energy and trade – specifically, the role of Shell in Dutch foreign policy, and how business defines Dutch national interest. The US demands for sanctions against Iran met with Dutch agreement – but only if everyone  abides by them, otherwise economic interests prevail. Which meant in effect allowing Shell to stay in the picture for Yadaravan oilfield contracts and long-term Liquid Natural Gas deals, and not lose out to the Chinese. The Business is Business approach in energy is confirmed in developing relations between the Netherlands and Russia. Describing the chummy contact between Balkenende, Medvedev, and Gazprom boss Victor Zubkov in June 2009, the Embassy had this to say:

“The two countries committed to increasing Russian companies’ investment in the Port of Rotterdam, and Russia’s Lukoil acquired a 45 percent stake in a Total refinery in south Holland. However, the Dutch are defensive about the clubby atmosphere of these twice-yearly high-level visits. GONL energy officials have told us bluntly in the past, Don’t lecture us about Russia. They are especially sensitive to criticism about Nord Stream; MEA [Ministry of Economic Affairs] took offense at the September 2008 editorial written by the then U.S. Ambassador to Sweden raising objections to the pipeline.”

While the Nord Stream deal caused tensions within the Balkenende cabinet at the time – as the Embassy reported on PvdA State Secretary Frans Timmermans’ concerns - all this confirms that the Russia card is a vital component in the future of Dutch energy policy. Timmermans has taken some flak for these comments, seeing as he is the one complaining the hardest about the Wikileaks revelations on the behind-the-scenes pressure put on Bos in 2009-2010. But that is a political side-show. Having benefitted from a huge domestic supply of natural gas since the 1960s, the fat years are now receding, and the Netherlands is now aiming to transform its role in Europe from energy source to energy transit hub. It looks like this takes precedence over concerns about human rights – and over US concerns.

With the VVD-CDA cabinet preparing to put a new mission in Afghanistan to the vote in parliament, Wikileaks released several more cables from the US Embassy in The Hague on Wednesday. One from February this year describes the collapse of the Balkenende cabinet over Afghanistan, stating the intention that “Post will work to build support with the Dutch government on future deployment options that will meet Verhagen’s stated goal of a significant Dutch contribution to the NATO mission.” One from September 2009 concerns the problems with the JSF. The cancellation by Congress of funding for the JSF F-136 engine project had rattled support in the Netherlands: ”The MOD has struggled to retain the necessary support for the JSF program in what has become a politically charged battle.” Not only that, but it also raised “doubts about American defense partnerships as we ask the Dutch to stay the course with us in Afghanistan”, an interesting case of linkage. 

But the third is the most interesting – a review of the place of the Netherlands in international affairs by Ambassador Clifford Sobel at the time of his departure from The Hague in August 2005. It was Sobel who brokered the original JSF deal with the Dutch, and generally he took a hard line on issues that disrupted smooth Dutch-American cooperation. The review’s claim about the Dutch ‘multiplier effect’ in international affairs is something this blog agrees with, although this is almost certainly declining in a more multipolar world of rising powers. The review covers the role of Dutch military forces and development aid, particularly in Africa, and how it is valued for its contribution. One wonders what the recent cuts in both areas will do to such an estimation. Then there is the international legal role, and the possibility that ”the Dutch combination of seeking pragmatic solutions while remaining true to their legal principles could make the Dutch an important asset in resolving our differences with the EU over the ICC and article 98 agreements under the right circumstances.”

And it includes some nuggets such as this:

“Venezuela: The Dutch have strategic interests in the Caribbean (i.e., the Netherlands Antilles and Aruba) and are deeply concerned about Chavez’ meddling in the region. As a Caribbean power, the Dutch have good reasons to lead an effort to balance traditional Spanish dominance on Latin American issues in the EU, but the U.S. and others will need to push them to take this role. The Dutch are active partners in regional drug enforcement efforts, and recently demonstrated their ability to deploy military forces (F-16s) on short notice. Persuading the Dutch to counter Chavez’s destabilization efforts more actively would give us a reliable European partner in the region.”

The final paragraph is worth quoting in full:

“The Dutch are actively and favorably involved in Afghanistan, Africa, Iraq, the Middle East, the Balkans, the Caribbean, Indonesia, and elsewhere. They are our best partner in developing pilot projects in the counterterrorism area, and are world leaders in development, free trade, international law and human rights. In pursuit of U.S. interests in all these areas of interest and leadership, we should build upon our successes to date to take the Dutch to the ‘next level’. SOBEL

Five years on, where is the next level now, one wonders? Is it still attainable?

This is the summary below. The full text is here.

Monday, 22 August 2005, 17:01

S E C R E T SECTION 01 OF 07 THE HAGUE 002309

SIPDIS

EO 12958 DECL: 08/18/2025

TAGS PREL, PGOV, PTER, ECON, EAID, NL, EUN, USUN

SUBJECT: AMBASSADOR’S PARTING THOUGHTS ON TAKING THE DUTCH

TO THE NEXT LEVEL

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4 (B) AND (D).

Â1. (S) SUMMARY: With the EU divided and its direction uncertain, the Dutch serve as a vital transatlantic anchor in Europe. As one of the original six EU members, the Dutch ally with the British to counter Franco-German efforts to steer Europe off a transatlantic course. The Netherlands solid European and international credentials create a powerful ‘multiplier’ effect. In Iraq, Dutch forces provided the physical and political cover for Japan to deploy and the Dutch are using their NATO Training Mission commitment to push others to do more. In Afghanistan, the Dutch drove much of the Phase III planning for ISAF and deployed Dutch troops in combat operations for the first time in more than 30 years. The Dutch have led Europe in launching pilot projects to strengthen international counterterrorism cooperation, and initiated the U.S.-EU dialogue on terrorist financing which laid the groundwork for a proposed major international Terrorism Financing Conference in 2006.

Â2. (S) (SUMMARY CONTINUED) The Dutch are expanding their leadership beyond Europe. Dutch strategic interests in the Caribbean make them logical partners to counter Venezuelan meddling in the region. They are expanding their military involvement in Africa, in part to provide a secure environment for their robust development assistance program, and in part to add ‘eyes and ears’ on the ground. In the Middle East, the Dutch enjoy good relations with Israel and the Palestinians and would welcome a more active role; they quickly promised funds for an expanded Multinational Observer Force (MFO) and might, under the right circumstances, commit troops. Even in areas where we disagree, such as drugs and trafficking in persons, Dutch views may be shifting. As the headquarters for major international legal institutions, the Netherlands offers a unique opportunity for advancing foreign policy goals far beyond Dutch borders.

Â3. (S) (SUMMARY CONTINUED) The coalition government, headed by PM Balkenende, is naturally inclined to work closely with the U.S. The balance could shift toward Brussels, however, if a center-left government comes to power in 2007 (or earlier), as predicted by most polls. The nearly one million Muslim immigrants are largely non-integrated, which is forcing the Dutch to question long-standing assumptions about Dutch ‘tolerance’ and ‘identity’. The murder of Theo van Gogh focused attention on Islamic extremism, and the Dutch feel they are ahead of much of Europe in addressing this growing problem. Strengthening U.S.-Dutch ties across the political spectrum is necessary to ensure that the Dutch continue to enlist others to pursue interests in line with the U.S., especially in the political-military sphere. Early and active consultations are the key to harnessing Dutch energies in enhanced pursuit of U.S. interests. END SUMMARY.

[18 April 1951: Treaty of Paris establishes the European Coal and Steel Community. Dutch Foreign Minister Dirk Stikker second from right]

Foreign affairs is never much of a vote-winner, and often a vote-loser due to vague benefits, difficult to realise plans or, in the worst case scenario, body-bags. Considering the last Dutch cabinet fell in February over disagreements on the military mission in Afghanistan, one might expect some recognition of this in the party programmes for the 9 June elections. Not so, writes Mark Kranenburg in the NRC. “Foreign affairs? Public spending cuts.”

Kranenburg is right that there has been a tendency in the Netherlands to turn backs on the outside world. The biggest fall-out from this attitude has been the approach to the EU, with weak support for Brussels from the main parties matched by anti-European demands by Wilders’ PVV and the Socialists. Balkenende’s attempt to become the first EU president was hardly convincing following the Christian Democrats’ poor attempt to sell the original European constitution to the electorate (who promptly rejected it by referendum in 2005).

But Kranenburg’s further explanation – that “a small land like the Netherlands can only play a limited role in the world” – is a typical underestimation of Dutch influence that one hears often. For Kranenburg, the Netherlands only really appears beyond its borders as a member of either NATO or the EU. As a single nation, it doesn’t mean much. But this is a misinterpretation of Dutch influence. The Netherlands projects an important kind of ‘niche diplomacy’, similar to the Norwegians and the Canadians, based on conflict resolution and acting as go-between or mediator amongst larger powers. Think of the recent Dutch efforts to ensure a smooth ICC review conference in Kampala. It has always committed resources to ensuring an effective presence within international organisations. Think of the determination to make Dutch financial advice indispensable and so hold on to the invitation to the G20, or the aim to be part of the leading group within NATO to formulate the future of its nuclear posture in Europe. It has a leading role in key policy areas such as international law and international development, and its ‘knowledge economy’ in these areas, ranging from specialist universities (Institute of Social Studies in The Hague, agricultural technology at Wageningen university) to NGOs, is impressive. And while the population apparently turns away from interest in what goes on beyond the border, they still donate millions of Euros when an earthquake hits Haiti.  

A more complex picture than ‘we are small, therefore…..’. And this doesn’t even go into the importance of trade, when the nation as a whole earns 70% of its GNP abroad.

All in all, the Netherlands works very hard to be seen and heard on the global stage, even if it often unseen via international organisations, or deliberately media-staged as with the many efforts to choreograph the ‘special relationship’ with the US by Foreign Minister Verhagen. 

But cuts are on the way. Kranenburg reviews the manifestos – while the VVD (currently leading the polls) plan to invest 120 million Euro more in defence, the others see it as a money pot to be raided. Socialists: 2 billion cuts, Labour, GreenLeft: 1.5 billion cuts, PVV: 1 billion cuts, D 66: 800 million cuts, CDA (even CDA): 500 million cuts. This is all the more remarkable since, as Kranenburg reports, the general tone from CDA, Labour, even D 66 is that the netherlands should participate in future NATO missions, perhaps even in Afghanistan once more (if they can finally sort out amongst themselves what is a ‘military mission’ and what is a ‘civilian mission’). What all this points to – indeed, should point to – is ‘goodbye JSF’. But one wonders, even with a better concentration of investments in specific military capabilities, if the cuts are not going to undermine the constant Dutch wish to ‘do something’ for the greater good abroad.

Apart from the military, a sacred cow could be up for sacrifice – development assistance. The Netherlands has consistently maintained its 0.8% of GNP for development for decades, one of the few nations that is determined to deliver the UN norm, and it has become a kind of flagship to demonstrate the nation’s goodwill and positive intent in global affairs. But now its under fire from the VVD (halve it) and the PVV (completely cut it), and even the CDA are wobbly in their commitment. VVD, CDA, and GreenLeft even want to remove the ministerial position for development cooperation, downgrading the place of this policy area within the government. Considering these parties could well be part of a cabinet combination, the potential for upheaval in this sector is great.

In terms of the Dutch image around the world, this is no small matter. Meanwhile the Ministry of Foreign Affairs has been conducting a wide-ranging survey of and discussion with stakeholders to find a path forward for a successful development policy (See The Broker site and ‘How to Develop Development’, 23 January, below]. Lots of debate about whether GNP is the best measure of development, and whether its a question of more growth or better distribution. But all of this, of course, will be decided by Dutch GNP and distributing cuts across the Dutch policy agenda. And at present, the prospects look grim.

Staying ahead of the pack is a costly business, especially if it refers to military hardware.

High technology doesn’t come cheap, but if it ensures advantages over all other adversaries then it can be worth it. The F-35 Joint Strike Fighter is meant to be such an item, placing its owners beyond the capabilities of more conventional flying weapons platforms. But its not an easy business to get it from concept to customer. Last week the Dutch parliament passed a motion that placed the further involvement of the Netherlands in some doubt.

In 2002 the Dutch government under Wim Kok decided to participate in the project, investing 858 million Euro in the JSF’s development phase. The mainline strike aircraft, the F-16, was still way ahead of the competition, but always staying ahead requires planning, and the JSF would fit the bill in the early 21st century. It was a neat exercise in transatlantic ‘burden-sharing’. Future national customers would invest in developing the aircraft, while at the same time specific sections would be tendered out to businesses as a form of repayment. If it worked, everyone would come out with a machine that was adapted to their needs and contributed to by their industry. In theory, anyway. 

In 2006 – just before the national elections – the Balkenende government signed a Memorandum of Understanding more or less committing the Netherlands to contribute to the production phase. At the time this was seen by some as a way of ‘locking in’ Dutch involvement regardless of what a future government might do. But the production phase has still not begun. We are still in the Initial Operational Test and Evaluation phase, during which the prototype can be checked out and adapted according to specific needs. The Dutch Air Force has expressed a strong desire to take part in this phase as a way of having some influence on the final product. Estimated costs to take part in this - 274 million Euro.  So far only the UK is joining the US in doing so. Potential JSF partners such as Turkey, Canada, Italy, and Australia have all given it a miss.

The Netherlands wanted to be part of the leading team. In 2008 the parliament voted to join the Test phase in principle, but then the problems started. A condition was that two test aircraft had to be purchased, at 20 million Euro each. The Labour party in parliament opposed this, leading to a compromise of a single plane. Now, with delays seemingly eternal and cost over-runs seemingly endless, in the final session before recess for the elections the parliament has voted in a Labour motion to step out of the Test phase.  Other motions were also passed to ensure that no definite decision to replace the F-16 with the JSF would be taken.

Of course, the question is who will be in the cabinet after the June 9 elections and whether they will stick by these parliamentary decisions. The motions were supported by an interesting cross-section of Labour, GreenLeft, the Socialists, D 66, and Wilders’ PVV. The tipping point has been the continuing delays and unexpected higher costs since agreeing to buy a test aircraft last year. On 19 May the Armed Services Committee of the US House of Representatives expressed deep concerns over the JSF project, to the point of requesting that more F-18 Hornets be purchased to cover a shortfall in strike aircraft due to the four year (and growing) delay in getting the F-35 operational. The following day the Dutch parliament took action.

So where will this go? Business reacted with dismay, seeing the possibility of lucrative defense contracts disappearing. The NIFARP – Netherlands Industrial Fighter Aircraft Replacement Platform – is the interest/lobby group that represents this community, and they swiftly sent out a press release lamenting the negative shift of Labour and the consequences for jobs in the future. Relations between the JSF’s Lockheed Martin and the Dutch aerospace industry are close. But Labour has just come out with its manifesto for the elections, including its intentions to cut public spending, and a move against the JSF was inevitable as a way to include the Ministry of Defence in this scenario.

As for the Ministry itself, they put out an estimate for what it will cost if the Netherlands has to organise its own test phase separate from the Pentagon’s programme – 200 million Euro. The message – if we quit now to save money, we pay a higher bill later. But as Mark Kranenburg of the NRC remarked, this figure seems ever so slightly on the high side. Which indicates that Defence really wants its high-tech JSF to keep the Dutch military part of the Anglo-American cutting edge. Meanwhile, the F-16 continues to be one of the best things around. And there are other options available, such as the fully functioning, already operational Eurofighter. Anyone who would like some interesting insights into what Dutch Atlanticism is all about should take a long look at the JSF saga.

The long-awaited reports, all twenty of them, from the committees set up to explore all possibilities for cutting back on the ballooning Dutch budget deficit and the national debt finally hit the press last Thursday, nicely just before Easter to give everyone a grim feeling over the long weekend.

Established around 6 months ago, the committees were deliberately set up to allow them to look at every and any possibility. No political taboes in the way. No sections of the government escaping. Everywhere a 20% cut. The figures are disputed, but that the axe is going to fall is not doubted, its a question of when not if. The Central Plan Bureau has estimated an annual deficit of 29 billion per year on current trends. A civil servant financial study group came up with advise that the next cabinet must improve the fiscal position by 15 to 18 billion a year.

And thats the first issue about these reports. There is no fully functioning government right now, only a ‘demissionair’ cabinet that keeps things ticking over until a new formation emerges out of the elections in June. So these reports have landed in the middle of an already tight electioneering battle. Nice timing. They don’t point the way for a ruling cabinet, but offer instead a backdrop for all the parties to profile themselves against. There are big differences of opinion. The Christian Democrats aim for 18 billion, the GreenLeft 12 billion, the Socialists 10, and so on, each party choosing its favourite target. We will all be paying more ‘own risk’ fees for health care. We may even lose our tax relief on mortgages (eventually). A whole section of local government – the provinces – could be swept away, bringing 1.8 billion savings. The Netherlands has made itself into a massive experiment.

Two things about this whole process don’t feel so good.

The first is the fact that much of the hole in the state finances came among other things from pouring billions into several banks over the past 18 months: Fortis, ABN, ING. Yes we need the banks, without banks an economy can’t move. But it feels pretty sad if the largest share of the costs accrued from this (ongoing) rescue operation are merrily passed on to the ordinary citizen. Ah, but unemployment, projected to hit 10% in the Netherlands, remains stubbornly between 5 and 6. So the Keynesian rule that you don’t cut back during a downturn can apparently be ignored. The state, having taken on the debt of the banks, passes it on to the people without being able to ensure that the banks won’t carry on pre-2008. Meanwhile the bonuses continue to flow. A golden opportunity for effective reforms was therefore missed.

 The second is that the relative position of the Netherlands internationally is not so bad at all. True, the national debt has risen from just above 50% of GDP in 2007 to around 75% now, and will continue to rise. But that still places it below Germany, the rule-maker when it comes to setting budget targets in Europe, never mind France, which is now around 100%, or Italy, around 130%. From the major economies in the EU only Spain comes out better. Recent figures also suggest that the Dutch industrial sector is starting to see an increase in orders. Its current account balance actually improved slightly from 2008 to 2009. Is this the right time to start undermining the chance of recovery for the sake of fiscal purity and abstract economic theory? No its not.

True, the reports are purely advisory, not policy. But they are proof of how nervous the Dutch state gets when figures start diving into the red. With this exercise the Netherlands is way ahead of everyone else in terms of seriously assessing what has to be cut to balance the books. Way ahead. No other nation has so far attempted to get a grip on everything like this. The UK has a far worse position but coming elections have exactly swept any serious discussion from the table (ironic really, when you think about it) as both Labour and Conservatives look to protect their interests. Obama has now also created a bipartisan to look at options, but in doing so he effectively removed the problem (temporarily) from his agenda. In big contrast, a strong hint of ‘best student in the class’ is once again emanating from the Hague.

Will cuts hit every corner of government? Yes they will. Even the intelligence and security service, the AIVD, since 9/11 a massively expanding operation, will take its share. Recent figures from the Ministry of Home Affairs indicate a budget of 176 million Euro for the AIVD this year, but this will decline to around 171 million by 2014. However, in 2000 its budget stood at around half that amount. So the cuts are likely to be minimal in comparison with other areas of government. The security of the nation must come above everything else, after all (I wonder for instance if this round of cuts will have any impact on major defence projects like the Joint Strike Fighter). And compared to the US, its cheap. Recent figures indicate a total budget for all 16 institutions in the US intelligence community of around $75 billion a year, and that is the public figure – there is plenty more invested via the ‘black budget’.