Global Politics

Some Dutch clamoring for leaving the euro, or introducing the neuro

Euro_banknotes200_776869039.jpeg

Euro banknotes (Illustration by Andrew Netzler.)

It’s a cold, wet day at the Albert Cuyp Street market in Amsterdam, one of the best places in town to grab anything from waffles to sexy underwear to an antique armoire.

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Ask a vendor who sells gloves, scarves and hats how his business is going, he says it’s as gloomy as the weather.

“People spend a lot less,” said the vendor who didn’t want to give his name. “But food is more expensive, everything is more expensive.”

He said people don’t have money left to buy anything. European leaders are meeting this week to save the euro, but here in the Netherlands, some say enough is enough.

It’s time, they say, to ditch the euro and go back to the guilder.

To add to the misery, the vendor said, the Dutch are now being asked to bail out the Greeks, the Portuguese and the Irish.

Like many here, the vendor blames the euro. He said the Dutch guilder was one of Europe’s strongest currencies when the switch was made in the late 1990s.

“We sold our Guilder too cheap,” the man said. “That’s what I think, and a lot of people think that. Give me back my guilder.”

Mathijs Bouman, an economist and author, said that looking back, the year before the euro was introduced, “Seventy to eighty percent of the Dutch people were in favor of the euro introduction.”

He said the Dutch loved the Guilder, but let it go in the name of being good European partners.

Bouman said he understands why, in this time of crisis, some are nostalgic for the old currency. But there’s no turning back.

“Abandoning the euro would destroy our economy,” Bouman said. “Especially in the Netherlands, if you look at multinational firms for instance, our banks — they’re really embedded in the euro system. All their debts and assets are in euros, and we don’t know what will happen if we break it up. How does the old saying go? You can’t unscramble a scrambled egg.”

But that isn’t stopping some from proposing ways to do just that.

One idea floated by Dutch politicians is for a “northern euro,” or “neuro.” It would only include northern European countries on sound economic footing. The Dutch would get in because, in the words of one politician, “We Dutch are able to control ourselves.”

But this week, the rating agency Standard and Poor’s put the Netherlands and other members of the eurozone on alert, by warning of a possible downgrade of their credit ratings. Even for the strongest economies, in northern Europe.

“It was a very clear sign telling us — you, northern part of Europe — don’t overestimate yourself,” said economist Jaap Koelewijn. “Your budgets are also going out of control, if you don’t take care. Your banking system is at risk.”

Koelewijn said European leaders need to pony up more than $5 trillion for the European bailout fund in order to calm the markets and keep economic contagion in check.

But Dutch economist Arjo Klamer said that the price tag for keeping the euro together is too high. Klamer’s been against the euro from the beginning — without a true political and fiscal union, he argued at the time, there was no hope for a single currency.

Now, Klamer said, just throwing money at the problem doesn’t address the real underlying issues – namely, that the economies vary so widely.

“Economies are dynamic,” Klamer said. “Things change and you need to have an institutional framework in place that can account for those dynamics, and has the space and flexibility to adjust to what’s happening.”

Like everyone else in Europe, the Dutch will be paying close attention to meetings of European leaders scheduled for Thursday and Friday in Brussels.

One economist compared the meetings to the “chicken” scene in “Rebel Without a Cause,” the scene where James Dean’s counterpart gets his sleeve caught and can’t bail out in time. The euro is just like that, the economist said.

One small mistake and the car will go right over the cliff.

And the Dutch will be going with it.