14 February 2019

Financial Times: Dutch PM warns of ‘devastating’ impact of no-deal Brexit on UK

Mr Rutte expressed alarm that Britain appeared to be doing nothing to stop itself from crashing out of the EU on March 29, saying it could be “devastating.”

“At the moment the ball is rolling towards the Dover cliff and we are shouting ‘Stop the ball from rolling any further’ but nobody is doing anything at the moment, at least not on the UK side,” he said in an interview with the Financial Times and a group of other European newspapers.

He also said that the exit of Britain, once deemed The Netherlands’ closest ally, showed that the EU needed to be much more hard-nosed about using its market power to serve its own interests.

The Netherlands is likely to be one of the biggest EU losers from a hard Brexit given the close trading links between the two countries especially in fresh produce and the importance of Rotterdam, Europe’s busiest port, to British trade. But Mr Rutte said it was difficult to assess the impact because for the moment The Netherlands was only seeing benefits, as companies shifted offices and staff there from the UK. Another 250 were “close to taking a decision to move here”, he said. [...]

He said Britain was a “more diminished country compared to what it was two or three years ago”.

We have to realise we are not toothless, we have our means of power as the EU Mr Rutte, a Liberal who is regarded as a strong contender for one of the EU’s top jobs after May’s European Parliament elections, said Brexit underscored the necessity of standing together and protecting the multilateral rules-based order.

But it also showed the EU needed to be more “streetwise and “less naive” about using its power to serve its interests in global markets and international diplomacy. That meant the EU should “stop grumbling about Trump and start doing business with him”, using the US president’s criticism to press for reform of the World Trade Organization or to push back against Chinese state capitalism.

“We have to realise we are not toothless, we have our means of power as the EU,” Mr Rutte said. “Our market power, for example, is unrivalled and I believe we should not be afraid to use it to achieve our goals and protect our vital interests as the EU.”

As examples, Mr Rutte said the EU should use the 2016 deal with Turkey that he and German chancellor Angela Merkel spearheaded — when Ankara stopped migrant flows in return for a promise of visa liberalisation as well as billions of euros in aid — as a template for other countries, particularly in Africa.

He also proposed scrapping national vetoes on EU sanctions so the bloc could mete out stronger and swifter retaliation against countries such as Russia. And, to diversify its energy supplies and counter Russia’s “pipeline politics”, he said the EU should invest in liquefied natural gas storage facilities and sign long-term supply contracts with the US and others.

But while calling for the EU to be more robust against unfair Chinese competition, Mr Rutte said he was “not immediately enthusiastic” about a new Franco-German push for European industrial champions, saying there was a risk of creating corporate giants through protectionism rather than competitiveness.

As one of the EU’s longest-serving leaders after eight years atop gruelling coalition governments, Mr Rutte is seen in Brussels as a possible president of the European Council when Poland’s Donald Tusk ends his term later this year. Is he interested? The Dutchman batted aside the question with a stock answer: “I don’t have ambition for any of the top jobs. My ambition is to complete this government term in 2021.”

Mr Rutte is close to German chancellor Angela Merkel but has also sought to cultivate a relationship with France’s Emmanuel Macron, a fellow pro-European centrist, despite big differences over measures to strengthen the eurozone. He is the ringleader of the so-called Hanseatic League or fiscally hawkish governments opposed to any kind of fiscal transfers or French plans for a eurozone budget to underpin the single currency. Mr Rutte’s call for a more assertive EU — which he fleshed out in a lecture in Zurich on Wednesday held in honour of Winston Churchill’s famous speech appealing for European unity — is a nod towards Mr Macron’s vision of the bloc as an independent power.

The departure of Britain, which he described as “the biggest voice for free trade”, meant that it now fell to the Dutch “to step up our voice” in favour of open markets and vigorous competition. But Paris and Berlin are now reviving ambitions for an EU industrial policy that could neuter antitrust rules to allow the creation of European champions able to compete with US and Chinese giants. Mr Rutte said he wanted to strike a balance.

“In the end to build strong national or pan-EU economic giants, it has to do with competitiveness. It has to be competitive. In that sense I am a true market liberal. I do believe that protection in itself is not the best way to achieve that. But as we are dealing with others in other parts of the world where, for example, through state aid or state-owned enterprises where we have an imbalance in how we deal with each other then we have to take care of that.” [...]

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