Dutch Finance Minister Gerrit Zalm is in the news again. Last time I read about him it was because he had started a weblog. This time the issue is different: he describes himself as being “totally fed up” with the fact the Dutch public thinks that it was effectively robbed by the way the euro was introduced.
Behind this ‘frustration’ lies a startk reality: the controversy over the valuation of the the guilder at the time of monetary union is one of the key factors fuelling the ‘no’camp in the forthcoming referendum.
The current row over the euro erupted on 30 April, when the director of the Dutch National Bank revealed to the Amsterdam newspaper Het Parool that at the time of the introduction of the euro, the Dutch Guilder had been undervalued by 5 to 10 percent. The undervaluation of the Guilder is now being linked to high inflation following the euro?s launch in 2001 – an inflation round which made the currency unpopular among many Dutch citizens.
If it was undervalued, then of course the impact would be mildly inflationary – since you would get less euros than your guilder were really worth- but given that the inflation impact of the introduction of the euro was pretty generalised, it is hard to establish any special Dutch problem.
Whatever the impact of the euro-row, the ‘yes’ campaign seems to be having a hard time of it. In part – as the EU Observer notes – because the country?s prime minister, Jan Peter Balkenende, seems to be pretty unpopular, and in part because the issue of national identity ? which formed the political core of the political programme of the assasinated politician Pym Fortuyn – appears to now be again playing a role in the EU referendum.