The Greatest of the Small? The Netherlands, the New Hanseatic League and the Frugal Four

Figures & data

Table 1. Hanseatic League views on EMU.

Six Shared views and values in the discussion on the architecture of the EMU	What it means in practical terms:
1. Inclusion of non-Euro Member States in EMU policy-making	After Brexit, all EU members except Denmark will have a legal obligation to join the common currency at some point; Sweden and Denmark are also indirectly concerned by the rules of the Banking Union; without the UK, they are also influential advocates of reduced public spending and individual responsibility that can support the cause of the Netherlands and Ireland. A Dutch advisory council report emphasises that the Danes and Swedes should start to signal a stronger interest in EMU for the Hanse group to have more authority on the issue.
2. Enforcement of Budget Rules by ensuring that national fiscal authorities comply with the earlier made common rules	Budget Rules are often portrayed as a straightforward set of numerical targets that every country can easily comply with and that make sense within each national context. In practice, there exist many different exceptions to the rules; the process of scrutinising them is long-winded and politicised because it combines different imperatives and some countries are complying more easily than others. Scrutiny occurs not only regarding competitiveness and fiscal debt sustainability, but also social priorities and energy policy; and the economic ideas that underpinned EMU are slowly losing support both inside the EU and in the international community.
3. Focus on European Initiatives that enjoy public support	A strong emphasis on the subsidiarity principle, with priority to areas with the greatest convergence of views between Member States. These include the completion of the Banking Union, and the transformation of the ESM into a European Monetary Fund; completing of the single market and pursuing an ambitious free trade agenda (that until recently had permissive consensus but became politicised in recent years. Another element is that considered here is to be cautious with greater risk-sharing and deepening of EMU if not supported by a wider public.
4. Completion of the Banking Union with a focus on risk reduction	Use the June 2016 Council Roadmap to Complete the Banking Union. Add more precision as regards to the specific steps that have to be taken: include adequate buffers for bail-in, flexibility to address macro prudential and systemic risks at the national level, sound provisioning policy for non-performing loans, regulatory treatment of sovereign exposures, ongoing work on improving the efficiency of national insolvency procedures, transparency to markets as well as minimising the use of state-aid. Also: a common backstop for the SRF and continue technical discussions on EDIS and the development of a Capital Markets Union. Another element is that by framing it this way a focus could be on reducing the risks of national banking systems rather than focusing on sharing the risks at the EU level.
5. Strengthen the ESM and have it possibly be developed into a European Monetary Fund (EMF).	An EMF should have greater responsibility for the development and monitoring of financial assistance programmes. Decision making should remain firmly in the hands of Member States. Another element is that creditor states would have more control over reform programmes and austerity measures in debtor states.
6. Use the EU budget to foster sustainable growth and be better aligned with the implementation of structural reforms.	Structural reforms are seen as key but the responsibility and ownership of Member States for such reforms is considered crucial. Another element is that possibly any further budget need would be integrated into the EU budget rather than a separate EMU budget.

Source: Adapted from Government of the Netherlands (2018a) and Government Offices of Sweden (2018a).

Government of the Netherlands (Rijksoverheid). 2018a. “Europa waarin zij gezamenlijk pleiten voor een sterker economisch Europa.” March 6. https://www.rijksoverheid.nl/actueel/nieuws/2018/03/06/minister-hoekstra-smeedt-alliantie-van-acht-eu-landen-voor-een-sterker-economisch-europa.

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Government Offices of Sweden. 2018a. “Finance ministers from Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden Underline Their Shared Views and Values in the Discussion on the Architecture of the EMU.” March 6. https://www.government.se/statements/2018/03/finance-ministers-from-denmark-estonia-finland-ireland-latvia-lithuania-the-netherlands-and-sweden.

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