Hello all foreign readers,
It seems as if our supertiny country has attracted quite some attention these days as all eyes were focused towards the main question: will a wave of populism change Europe? And although on the surface the answer seems a clear NO, there is more to the results than meets the eye.
In my humble opinion, the current results of the Dutch exit-poll show how populism and clientelism have become more prominent here, as in all other countries around the world. So mind you: in the Netherlands we're still moving to less democracy and more populism.
This will be clear after the reading the insights below. But do note that these are based on the exit-polls and not the final vote.
Insight # 1: Dutch voters have learnt their lesson, punished government and no longer voted strategic
What we can see is that both VVD (-10) and PvdA (-20) have been punished for their role in the preceding government. During the last elections, many citizens voted strategically and shifted their votes from their original parties to either VVD (right) or PvdA (left) to avoid the other party to become the biggest.
Yet through a strange turn of events and due to the anxious hunger for power, VVD and PvdA decided to work together. They compromised on fundamental party principles in order to be in power. As such they both disappointed the strategic voters and their party fanatics who assumed that it was unlikely that these two would work together with the enemy, even without additional parties.
PvdA and VVD formed an alliance that was based on very limited support and did not have a majority in the Senate. When started it was clear that they would focus on one thing only: surviving as a government out of fear that in-between elections would lead to a massive victory for PVV.
The first lesson in todays outcome in the Netherlands is that strategic voters have learnt that strategic voting does not pay. In addition, die hard party fans of both PvdA and VVD did not accept the fact that their party was sleeping with the enemy. So first and foremost, both parties are punished for quickly seeking power with the dark side. And the strategic voters have decided not to do this again but vote for their principles.
Insight #2: Dutch are more populist than before, but they come in different clothing
Whereas it looks as if the regular party VVD (31 seats) is the biggest with runners up CDA (19), D66 (19) and PVV (19), we should note that the only non-populist party in this row is D66. Both VVD and CDA made a sharp right turn by taking PVV-like positions on immigration and such.
With this in mind, I think it would be fair to say that effectively we had at least three rightish populist parties on the scene, who together assembled 69 out of 150 seats. This used to be 56 seats (for VVD and PVV) in the previous elections.
On top of that we can see that, even though parties all declared that right-wing PVV would not be invited for government roles (given their unreliable stance some years ago), the parties has won some 4 seats.
Right now, this election evening, most people and foreign media are misstaking the wood for the trees by concluding that the low amount of seats for PVV is a signal that the battle agains populism has been won in the Netherlands. It is with much regret that I need to conclude otherwise: the existing parties have adopted the populism and it is more widespread than before.
Insight #3: Fact free politics are also on the rise in the Netherlands
All over the world we are witnessing new 'leaders' or political activists who don't care about truth but focus on convincing the public by playing on their emotion. They don't provide solutions to real life problems, but are able to amass considerable support, either from within existing parties or as a new political party.
It's the same here. We have narcistic old and new players with a lot of noise, but no true consistent content coming into play from different angles. Among these are the party for elderly, forum for democracy, THINK and PVV. From a number of 15 seats in 2012, these are now expected to gain 28 seats.
Insight #4: Turkish incident helped both VVD and DENK with some extra seats
This weekend, just before the elections, the Dutch and Turkish government ended up in a diplomatic row over unwanted visitors to the Netherlands. This allowed prime minister Rutte (VVD) to pose as a leader, thus winning some seats, while DENK (representing Turkish interests in the Netherlands) avoided to enter the debate. Their existence did allow the irritated Turkish/Dutch citizens to voice their anger on the discrimination that they experience in the Netherlands.
One could compare this to the situation with Eurosongfestivals, where the immigrant population in the Netherlands and Germany have a big vote/say in influencing the Dutch end result.
Insight #5: Better economy allows for a more positive stance
With the economy starting to gear up slowly, there is more room for a positive outlook and progressive choices. Both GL (Greenleft) and D66 (liberals) spreaded a positive message and succeeded in regaining their strategic voters from the PvdA while adding some new ones. Therefore their results improved from 4 to 16 (GreenLeft) and from 12 to 19 (D66).
So did we stop populism and clientelism here in the Netherlands?
While many here in the Netherlands are strongly hoping that our election message to Europe and the world is that populism has been put on hold here, I am afraid that conclusion is not justified. Some of the mainstream parties have adopted the populist positions of PVV, including some measures that are in conflict with treaties and basic human rights. Meanwhile the PVV has still grown and some smaller parties popped up that are more in the personal interest of the party leaders themselves than for the public.
My conclusion is therefore that populism and clientelism is still with us, even stronger than before. Due to its absorption in main stream politics and the specific Dutch electoral landscape outsiders, may be less able to identify this. But I would not be surprised if in other jurisdictions, with other electoral constellations, the trend of populisms and clientelism (Fillon) remains the main trend, just as it is here.
So, the Netherlands may have appeared to have stopped populism, but mind you, we didn't!
Showing posts with label Remarkable. Show all posts
Showing posts with label Remarkable. Show all posts
23/01/2017
Dutch insight for the US: how to understand Trump best
Hi there all you US Citizens,
It's been a remarkable couple of months, hasn't it?
Your democracy, known for its delicate set of checks and balances, has unbalanced itself into a situation where a Presidential candidate that wins the popular vote by 3 million is not becoming President. Instead an extreme narcissist has now entered the White House and everybody is wondering how to read and understand his 'politics'.
Let me try and help you, the US public, in understanding how to deal with this new President. Because over here in the Netherlands we already have (had) some similar politicans running around and that has provided us with sufficient learning material.
It's always and exclusively about inflated self-esteem
The major rule for understanding narcissist is not to listen to their talk. It's never about the things they say. Narcissist have an intrinsic lack of self-esteem which they want to compensate by getting attention and compliments. As deep as their lack of self-esteem, as high is their need for compliments and admiration.
Narcissist lie by definition. They adapt their stance to make sure one thing is constant: their own image in the mirror of a reputable, God-like human being who can and will get all they want. And in order to preserve this image, they will manipulate their environment with a psychopathic lack of conscience.
When caught in the act (of lying), narcissist will deny and manipulate for so long that in the end people stop calling them out. We've heard footage of denigrating talk about the treatment of women and even that has not stopped a large chunk of US citizens from denying this erratic person entry into their most important public office.
How to understand their inside thinking: reverse their statements and accusations
The best way to understand what's going on in the mind of narcissist is to fully reverse all statements that they make. So when a narcissist says his opponent is rigging the elections, this explains exactly what he is doing at that moment. Or when he says that the press is lying about the turnout for inaguration day, you can bet that he is lying himself about it.
The one thing not to do is to expect continuity in thinking. A narcissist will never be caught in being consistent. They refrase, ly and don't care about being inconsistent. Trying to construct this consistence from the outside is of no use: there is none. The only consistent thing happening is that the narcissist is playing the power stadium just as long as he gets what he wants: attention and compliments.
For the current US president it is quite obvious that he has had a youth with a cold, ambitious father who never really cared about his own kids. The closest thing to true fathers that Trump ever came in contact with are the generals and corporals in the army. This explains his high ratio of former military among his staff. He tries to assemble support from fatherly figures.
The eternal tragedy of all this is that as hard as one can try, you can never end up with the so much desired self-esteem this way. Self-esteem is something gained from within and no manipulation or even US Presidency will help you get it.
How to end this: neglect the attention seeker or overcompliment into oblivion
The essential way out of an unhealthy narcist relation is to not share anything personal and try and cut all ties. In doing so one either fully neglects the narcissists or overcompliments them into oblivion. Alas to say that both strategies may be hard to execute when the person in question holds such an important office.
Yet, it could well be the case that the other players in the world game of power recognize Trump for what he is and seek more stable alliances with each other rather than deal with the erratic treats of Trump. Which gets you exactly where you don't want to be.
How this will end for the US?
I am sorry to say, but the end of a narccisist is always somewhat destructive. If we summarize Trump his whole business consists of lying, constructing an image, selling the image and moving forward to a next adventure before anyone discovers that his previous adventure was a full fail and financial disaster. The tiny info that was provided on his tax deductions already shows this.
Given that he is now playing his game on a national level, you may expect the US to spend more than it can, to alienate all international stakeholders until some geopolitical or health incident happens. When all the dust settles, the US will discover that Trump has only worked towards a greater image of himself and funds for his children. But the country itself will be worse off, unless perhaps for some costly highways, built by former business friends of the president.
The so called angry Americans that have voted for him, will then discover that he was indeed a con artist that robbed them not only of their vote, but also of their self-esteem as well as their health care. All that the US will have left is nice pictures, selfies of Trump golfing at Balmoral castle, a golden plated and redecorated White House and - god forbid - most likely an extra Trump face carved out in Mount Rushmore.
This beautiful country of yours will thus experience the reversed American Dream. Trumps reign will send you from a millionaires position into an isolated newspaper delivery boy (with a big mouth).
Hope?
I just hope for your sake that there won't be time enough during this 45th President's reign to ruin all the good things of the US. And I very much hope you will be able to see and live the next years as an intermediary phase, needed to learn a costly lesson about democracy.
It's been a remarkable couple of months, hasn't it?
Your democracy, known for its delicate set of checks and balances, has unbalanced itself into a situation where a Presidential candidate that wins the popular vote by 3 million is not becoming President. Instead an extreme narcissist has now entered the White House and everybody is wondering how to read and understand his 'politics'.
Let me try and help you, the US public, in understanding how to deal with this new President. Because over here in the Netherlands we already have (had) some similar politicans running around and that has provided us with sufficient learning material.
It's always and exclusively about inflated self-esteem
The major rule for understanding narcissist is not to listen to their talk. It's never about the things they say. Narcissist have an intrinsic lack of self-esteem which they want to compensate by getting attention and compliments. As deep as their lack of self-esteem, as high is their need for compliments and admiration.
Narcissist lie by definition. They adapt their stance to make sure one thing is constant: their own image in the mirror of a reputable, God-like human being who can and will get all they want. And in order to preserve this image, they will manipulate their environment with a psychopathic lack of conscience.
When caught in the act (of lying), narcissist will deny and manipulate for so long that in the end people stop calling them out. We've heard footage of denigrating talk about the treatment of women and even that has not stopped a large chunk of US citizens from denying this erratic person entry into their most important public office.
How to understand their inside thinking: reverse their statements and accusations
The best way to understand what's going on in the mind of narcissist is to fully reverse all statements that they make. So when a narcissist says his opponent is rigging the elections, this explains exactly what he is doing at that moment. Or when he says that the press is lying about the turnout for inaguration day, you can bet that he is lying himself about it.
The one thing not to do is to expect continuity in thinking. A narcissist will never be caught in being consistent. They refrase, ly and don't care about being inconsistent. Trying to construct this consistence from the outside is of no use: there is none. The only consistent thing happening is that the narcissist is playing the power stadium just as long as he gets what he wants: attention and compliments.
For the current US president it is quite obvious that he has had a youth with a cold, ambitious father who never really cared about his own kids. The closest thing to true fathers that Trump ever came in contact with are the generals and corporals in the army. This explains his high ratio of former military among his staff. He tries to assemble support from fatherly figures.
The eternal tragedy of all this is that as hard as one can try, you can never end up with the so much desired self-esteem this way. Self-esteem is something gained from within and no manipulation or even US Presidency will help you get it.
How to end this: neglect the attention seeker or overcompliment into oblivion
The essential way out of an unhealthy narcist relation is to not share anything personal and try and cut all ties. In doing so one either fully neglects the narcissists or overcompliments them into oblivion. Alas to say that both strategies may be hard to execute when the person in question holds such an important office.
Yet, it could well be the case that the other players in the world game of power recognize Trump for what he is and seek more stable alliances with each other rather than deal with the erratic treats of Trump. Which gets you exactly where you don't want to be.
How this will end for the US?
I am sorry to say, but the end of a narccisist is always somewhat destructive. If we summarize Trump his whole business consists of lying, constructing an image, selling the image and moving forward to a next adventure before anyone discovers that his previous adventure was a full fail and financial disaster. The tiny info that was provided on his tax deductions already shows this.
Given that he is now playing his game on a national level, you may expect the US to spend more than it can, to alienate all international stakeholders until some geopolitical or health incident happens. When all the dust settles, the US will discover that Trump has only worked towards a greater image of himself and funds for his children. But the country itself will be worse off, unless perhaps for some costly highways, built by former business friends of the president.
The so called angry Americans that have voted for him, will then discover that he was indeed a con artist that robbed them not only of their vote, but also of their self-esteem as well as their health care. All that the US will have left is nice pictures, selfies of Trump golfing at Balmoral castle, a golden plated and redecorated White House and - god forbid - most likely an extra Trump face carved out in Mount Rushmore.
This beautiful country of yours will thus experience the reversed American Dream. Trumps reign will send you from a millionaires position into an isolated newspaper delivery boy (with a big mouth).
Hope?
I just hope for your sake that there won't be time enough during this 45th President's reign to ruin all the good things of the US. And I very much hope you will be able to see and live the next years as an intermediary phase, needed to learn a costly lesson about democracy.
03/02/2012
Bernankes blunder or Bernankes brilliance ?
About one year ago, the FED-President Bernanke started giving press conferences to explain the policy decisions of the Federal Open Markets Committee. I was pleasantly surprised then, but I was also a bit wary of the continued low interest rates. With the risk of being hilariously wrong I think his recent choice to state that the FED will keep the interest rate low for a number of years, is a horrible mistake that will cost us significantly.
One thing to remember of course, is that monetary policy at low interest rates is really Bernanke's cup of tea and expertise. In this research paper of 2003, he essentially describes all the possible policy measures of the FED:
- committing to low interest rates for a longer time frame (thus shaping expectations),
- changing the composition of the balance sheet (for example buying treasuries or swapping maturities),
- changing the size of the FED-balance sheet.
And in hindsight we can see that this is precisely the road map that the FED has been following the last years.
So why do I think this long period of low interest rates is wrong?
My main argument is quite simple. For markets to function properly, there must be uncertainty with respect to the real economy but also with respect to the behaviour of monetary authorities. This uncertainty by definition leads to a distribution of market expectations with some being more bearish and others more bullish. Thus, uncertainty is helpful as it creates the maximum liquidity in a market and maintains an overall balance with respect to divergence of expectations of the future.
Following this line of thought, the announcement of future low interest rate (for a long period) by the FED is the equivalent of giving a serious prolongued committment. And while this is done on purpose, with the aim to help out financial markets, I think it reduces uncertainty too much. Market participants will expect the FED to behave this way and the market will be robbed of an important uncertain factor. Thus, the market will become flawed and market expectations will not be balanced or evenly distributed any more. As a consequene the FED only stands to lose now, if for some sudden reason the market circumstances require a reversion of the outspoken low interest course.
I think that right now we are already seeing the effect of the FED behaviour. The effect of the low interest rate now leads some players in the US to desire negative interest rates on bonds. And in my view this is only the beginning. And therefore I am now officially going on record stating that Bernanke - brilliant as he may be - has blundered into a serious misstake here.
One thing to remember of course, is that monetary policy at low interest rates is really Bernanke's cup of tea and expertise. In this research paper of 2003, he essentially describes all the possible policy measures of the FED:
- committing to low interest rates for a longer time frame (thus shaping expectations),
- changing the composition of the balance sheet (for example buying treasuries or swapping maturities),
- changing the size of the FED-balance sheet.
And in hindsight we can see that this is precisely the road map that the FED has been following the last years.
So why do I think this long period of low interest rates is wrong?
My main argument is quite simple. For markets to function properly, there must be uncertainty with respect to the real economy but also with respect to the behaviour of monetary authorities. This uncertainty by definition leads to a distribution of market expectations with some being more bearish and others more bullish. Thus, uncertainty is helpful as it creates the maximum liquidity in a market and maintains an overall balance with respect to divergence of expectations of the future.
Following this line of thought, the announcement of future low interest rate (for a long period) by the FED is the equivalent of giving a serious prolongued committment. And while this is done on purpose, with the aim to help out financial markets, I think it reduces uncertainty too much. Market participants will expect the FED to behave this way and the market will be robbed of an important uncertain factor. Thus, the market will become flawed and market expectations will not be balanced or evenly distributed any more. As a consequene the FED only stands to lose now, if for some sudden reason the market circumstances require a reversion of the outspoken low interest course.
I think that right now we are already seeing the effect of the FED behaviour. The effect of the low interest rate now leads some players in the US to desire negative interest rates on bonds. And in my view this is only the beginning. And therefore I am now officially going on record stating that Bernanke - brilliant as he may be - has blundered into a serious misstake here.
01/11/2011
Eurocrisis: the frog may have been long boilt but we fail to notice...
Looking at todays market developments I am very much reminded by the complex discussions of 2007 and 2008. I think also these days, here in Europe we are failing to recognize that the political and decision process has gotten out of control. The bailout-frog is long boilt and dead, but we keep pretending it is alive and will be able to move. And heaven only knows wen reality will sink in.
Mind you, my personal opinion is that the Wednesday-package was not about bailing out Greece but about bailing out Europe. Given that clearly the EU governments don't have the support/cash to fund a bailout fund themselves, they had to provide the EFSF with sufficient flexibility to go shopping for funds in the market. Three cheers to Angela Merkel for finally understanding that...
And the European leaders of course also placed an emergency solution via the IMF in the background. In doing so the (emergency) plumbing is laid for a bailout of Europe. As a result, the financial markets could no longer determine whether the bazooka was sufficiently big. It's size is unknown, now that there is the possibility of some Chinese or Saudi Arabi or the IMF to step in. So, lot's of work to do, but the main problem was solved.
Thus, the essence of the EU-package was that it ensured that the EU itself would qualify for emergency packages, should push come to shove. And this appeared to work for a day or so. And while Draghi outlined to continue to take extra-ordinary measures, Italy got burnt in the market. So that did not bode too well.
And here we are now. Tuesday evening, first of november 2011. Berlusconi is meeting with his Cabinet to discuss measures. As is the Greek Prime Minister who presumably felt that the First November of 2011 was a good day to announce a referendum (1-11-11, it must mean something in Greek mythology). And of course, the Dutch Members of Parliament will also convene this evening. So there will be more discussions. And letters to parliament. And then our Prime Minister will say stuff. And then there will be the G20. And so on, and so on.
I understand that for those working in civil service, there is no giving up on Europe and procedure. They must continue to go the way that has been prescribed and try to make something out of this very desperate situation. But it is all quite similar to the myth/story of the boilt frog. If you put a frog in a glass of water it will jump out if it is heated quickly, but will not when the water is heated slowly. So in a situation of slow changes, the frog will boil to death.*
The whole EU-situation now reminds me very much of the complex discussions we had here in the Netherlands with the takeover of ABN AMRO by Barclays, followed by the bid of RBS/Fortis/Santander. This whole deal messed up incredibly and had all kinds of side effects (no attention paid to smaller banks with two of them failing subsequently: DSB Icesave). And the one major lesson that we could learn in the Netherlands was that it is essential to identify the moment in which a process has become too complex to handle.
And what I'm saying here: we may have passed that moment quite some months ago already. We are already witnessing the Lehman 2 moment in the markets, but European politicians are too busy to notice (as they are holding summits and meeting to prevent Lehman 2 from happening).
By the way: later scientists proved that the story was untrue and an urban myth. Maybe someday people will say the same of the Euro...
Mind you, my personal opinion is that the Wednesday-package was not about bailing out Greece but about bailing out Europe. Given that clearly the EU governments don't have the support/cash to fund a bailout fund themselves, they had to provide the EFSF with sufficient flexibility to go shopping for funds in the market. Three cheers to Angela Merkel for finally understanding that...
And the European leaders of course also placed an emergency solution via the IMF in the background. In doing so the (emergency) plumbing is laid for a bailout of Europe. As a result, the financial markets could no longer determine whether the bazooka was sufficiently big. It's size is unknown, now that there is the possibility of some Chinese or Saudi Arabi or the IMF to step in. So, lot's of work to do, but the main problem was solved.
Thus, the essence of the EU-package was that it ensured that the EU itself would qualify for emergency packages, should push come to shove. And this appeared to work for a day or so. And while Draghi outlined to continue to take extra-ordinary measures, Italy got burnt in the market. So that did not bode too well.
And here we are now. Tuesday evening, first of november 2011. Berlusconi is meeting with his Cabinet to discuss measures. As is the Greek Prime Minister who presumably felt that the First November of 2011 was a good day to announce a referendum (1-11-11, it must mean something in Greek mythology). And of course, the Dutch Members of Parliament will also convene this evening. So there will be more discussions. And letters to parliament. And then our Prime Minister will say stuff. And then there will be the G20. And so on, and so on.
I understand that for those working in civil service, there is no giving up on Europe and procedure. They must continue to go the way that has been prescribed and try to make something out of this very desperate situation. But it is all quite similar to the myth/story of the boilt frog. If you put a frog in a glass of water it will jump out if it is heated quickly, but will not when the water is heated slowly. So in a situation of slow changes, the frog will boil to death.*
The whole EU-situation now reminds me very much of the complex discussions we had here in the Netherlands with the takeover of ABN AMRO by Barclays, followed by the bid of RBS/Fortis/Santander. This whole deal messed up incredibly and had all kinds of side effects (no attention paid to smaller banks with two of them failing subsequently: DSB Icesave). And the one major lesson that we could learn in the Netherlands was that it is essential to identify the moment in which a process has become too complex to handle.
And what I'm saying here: we may have passed that moment quite some months ago already. We are already witnessing the Lehman 2 moment in the markets, but European politicians are too busy to notice (as they are holding summits and meeting to prevent Lehman 2 from happening).
By the way: later scientists proved that the story was untrue and an urban myth. Maybe someday people will say the same of the Euro...
09/10/2011
Exceptional, depressing and amazing interview by Peter van Ingen on Buitenhof (Dutch tv) this morning
This morning. Both the terms Peter van Ingen and Buitenhof became trending on Twitter Netherlands. And the reason is that we could all be amazed at the style of interview by Mr. van Ingen. I dedicated a Dutch blog on the implications of such an interview style, but the foreign readers may want a bit of background information.
So what happened here in the Netherlands in the media?
Our labour party, PvdA is strongly in decline. While they reached 30 seats in parliament during elections, they have considerable less seats in polls now (see here) which creates an uncomfortable position. The Socialist Party eats up a lot of votes and there is a lot of discussion in public on the style of Job Cohen, the chair of the 30 members of Parliament. He remains the gentlemen rather than choosing for the quote-style of politics that we can see a lot these days. In doing so he is the exception.
This week, the chair of the Labour Party, Ploumen, left the party. But she also gave an exit-interview in the Volkskrant (a bit left-oriented newspaper in the Netherlands). And as a result, the pressure on Job Cohen mounts. See also this article. Cohen has outlined that he will take the criticism to heart and therefore all eyes in the Netherlands were turning to Buitenhof, this Sunday morning. Buitenhof is the main political debate program, which often serves as a platform for political discussion.
The interview in Buitenhof
This mornings edition of Buitenhof had a particularly agressive interviewer, Peter van Ingen, who fist wanted to discuss in detail what exactly had happened this week, with the exit interview of Ploumen. Then Cohen explained this but also stated: I prefer not to further engage on this issue in public, but within the party. Van Ingen kept pushing, but Cohen outlined his stance.
In a lof of the rest of the interview van Ingen effectively sort of played the devils advocate and repeated some of the criticism of Ploumen on Cohen. Which was all about style and conduct. Cohen made it clear that he was choosing his own style, his own tone of voice and that insulting nicknames said more about the insultor than himself. Yet van Ingen pushed on, not willing to listen to the content of Cohen's message.
Essentially, the interviewer kept on moaning and complaining about how Cohen conducted himself in the political arena while Cohen tried to outline his partys vision for the future. And although the tv-interview was advertised on the web as: 'Cohen's reply', (suggesting that Cohen would get the floor for his vision on developments) the interviewer didn't allow for much space and often interrupted. So we ended up with very little content in the discussion and an awful lot of tit-for-tat talk on process.
The most striking element was that the last question was: 'Did you arrange already for your succession?'. Many comments on twitter described this as impertinent, given also the previous line of questioning by the interviewer. It's not nice to wrap up the interview and throw this prepared granate to the guest. But Cohen handled it competently. And this ended the interview.
Annoyed
The style of interview -and the last question as the cherry on the cake- got many people annoyed. This was more about the opinion of the interviewer than giving the floor to Cohen.It got me to immediately write an analysis and comment on my Dutch blog that:
1. the choice by a tv show to not focus on content but only short time actuality/gossip is in itself also a political choice; it's not a neutral choice but a choice that also shapes the political climate,
2. the choice by an interviewer to go for an offensive style can be made, but the talk should in the end be about the guest and the opinion of the guest, rather than the opinion of the interviewer. And this interview contained quite a lot of display of morality and opinion of the interviewer, blocking the message of the guest. And underneath, the interviewer did not appear to be interested at all in the opinion of the guest. Which showed.
3. the last question about succession planning, was an impertinent one; comparable to kicking a man when he is own on the ground. And I noted that this tough-style interviewing is becoming more and more popular in the Netherlands. And thus, the Dutch media themselves play a role in creating a more rude and inpolite political climate: a serious trend that they might want to reflect on.
Action
To vent out my amazement I wrote this Dutch blog. And in it I placed two links so that readers who would agree, could easily send out e-mails to the journalist team at Buitenhof. So that the team may reflect on what happened today in the interview with Cohen.
I hope they will succeed in getting their interview standards to a higher level, because a good functioning political system also requires solid journalists keeping up their standards.
So what happened here in the Netherlands in the media?
Our labour party, PvdA is strongly in decline. While they reached 30 seats in parliament during elections, they have considerable less seats in polls now (see here) which creates an uncomfortable position. The Socialist Party eats up a lot of votes and there is a lot of discussion in public on the style of Job Cohen, the chair of the 30 members of Parliament. He remains the gentlemen rather than choosing for the quote-style of politics that we can see a lot these days. In doing so he is the exception.
This week, the chair of the Labour Party, Ploumen, left the party. But she also gave an exit-interview in the Volkskrant (a bit left-oriented newspaper in the Netherlands). And as a result, the pressure on Job Cohen mounts. See also this article. Cohen has outlined that he will take the criticism to heart and therefore all eyes in the Netherlands were turning to Buitenhof, this Sunday morning. Buitenhof is the main political debate program, which often serves as a platform for political discussion.
The interview in Buitenhof
This mornings edition of Buitenhof had a particularly agressive interviewer, Peter van Ingen, who fist wanted to discuss in detail what exactly had happened this week, with the exit interview of Ploumen. Then Cohen explained this but also stated: I prefer not to further engage on this issue in public, but within the party. Van Ingen kept pushing, but Cohen outlined his stance.
In a lof of the rest of the interview van Ingen effectively sort of played the devils advocate and repeated some of the criticism of Ploumen on Cohen. Which was all about style and conduct. Cohen made it clear that he was choosing his own style, his own tone of voice and that insulting nicknames said more about the insultor than himself. Yet van Ingen pushed on, not willing to listen to the content of Cohen's message.
Essentially, the interviewer kept on moaning and complaining about how Cohen conducted himself in the political arena while Cohen tried to outline his partys vision for the future. And although the tv-interview was advertised on the web as: 'Cohen's reply', (suggesting that Cohen would get the floor for his vision on developments) the interviewer didn't allow for much space and often interrupted. So we ended up with very little content in the discussion and an awful lot of tit-for-tat talk on process.
The most striking element was that the last question was: 'Did you arrange already for your succession?'. Many comments on twitter described this as impertinent, given also the previous line of questioning by the interviewer. It's not nice to wrap up the interview and throw this prepared granate to the guest. But Cohen handled it competently. And this ended the interview.
Annoyed
The style of interview -and the last question as the cherry on the cake- got many people annoyed. This was more about the opinion of the interviewer than giving the floor to Cohen.It got me to immediately write an analysis and comment on my Dutch blog that:
1. the choice by a tv show to not focus on content but only short time actuality/gossip is in itself also a political choice; it's not a neutral choice but a choice that also shapes the political climate,
2. the choice by an interviewer to go for an offensive style can be made, but the talk should in the end be about the guest and the opinion of the guest, rather than the opinion of the interviewer. And this interview contained quite a lot of display of morality and opinion of the interviewer, blocking the message of the guest. And underneath, the interviewer did not appear to be interested at all in the opinion of the guest. Which showed.
3. the last question about succession planning, was an impertinent one; comparable to kicking a man when he is own on the ground. And I noted that this tough-style interviewing is becoming more and more popular in the Netherlands. And thus, the Dutch media themselves play a role in creating a more rude and inpolite political climate: a serious trend that they might want to reflect on.
Action
To vent out my amazement I wrote this Dutch blog. And in it I placed two links so that readers who would agree, could easily send out e-mails to the journalist team at Buitenhof. So that the team may reflect on what happened today in the interview with Cohen.
I hope they will succeed in getting their interview standards to a higher level, because a good functioning political system also requires solid journalists keeping up their standards.
13/09/2011
Interesting development... default Greece confirmed/rumoured (sort of) by Dutch Ministry of Finance..
This morning, Bert Bruggink, CFO Rabobank, was quoted in Financieele Dagblad, saying that -looking at the markets- it was not the question if but when Greece would default. And RTL Nieuws informed the public that the Ministry of Finance was now preparing for all possible (and unthinkable) options in the crisis. Which lead to clippings in the press: 'Dutch Ministry of Finance thinks that default of Greece is imminent.'
Tomorrow, Dutch parliament will discuss the EFSF in parliament. But PvdA (Labour) does not wish to support the extension of the fund if Finland still has its demand for collateral on the table. The 'Green-Left'-party states that with the extension, the EU should also decide on the Euro-commissioner for budget (the MarkRutte proposal). And the Socialist Party doesn't want the EFSF to take over bond-buying from the ECB as, the ECB has 'unlimited funds'.
Meanwhile, national radio bulletins send out the message that sources near to the Ministry of Finance outline that it is preparing for default (19.57). While formally the Ministry may not be calling for orderly default and denies it (20.20). Which means that the 'open' and transparant communication of Minister de Jager, once again creates more confusion than necessary. It's a bit like BNP formally denying the informal rumour about its financial health.
So, looking at this confusion, it does indeed look as if the default of Greece is imminent...
Tomorrow, Dutch parliament will discuss the EFSF in parliament. But PvdA (Labour) does not wish to support the extension of the fund if Finland still has its demand for collateral on the table. The 'Green-Left'-party states that with the extension, the EU should also decide on the Euro-commissioner for budget (the MarkRutte proposal). And the Socialist Party doesn't want the EFSF to take over bond-buying from the ECB as, the ECB has 'unlimited funds'.
Meanwhile, national radio bulletins send out the message that sources near to the Ministry of Finance outline that it is preparing for default (19.57). While formally the Ministry may not be calling for orderly default and denies it (20.20). Which means that the 'open' and transparant communication of Minister de Jager, once again creates more confusion than necessary. It's a bit like BNP formally denying the informal rumour about its financial health.
So, looking at this confusion, it does indeed look as if the default of Greece is imminent...
24/05/2011
Appointing the new President and two directors of our central bank: butterfingered fiddling with an aftertaste of sprouts...
Well, the dust has now settled in the Netherlands on the announcements with respect to the new President and directors of our central bank: De Nederlandsche Bank (DNB). It is clear that our Minister of Finance, de Jager, has appointed one of his own top-managers, Klaas Knot, as the next President of DNB, to succeed Nout Wellink. And Jan Sijbrand (former NIBC and ABN AMRO), is to become the Executive Director in charge of Supervision. And as a result of the clumsy process, one of the internal DNB-candidates, Lex Hoogduin, who was proposed/favoured by the Supervisory Board, drew his conclusions and decided to leave. So what we can also read in the press release of DNB is that a third new appointment is announced: that of Frank Eldersohn, who will be Executive Director in charge of the 'internal operations'; the day to day functioning in organisational/HR terms.
Let's review this appointment process from a distance, drawing on the numerous reports and bits of work that are available with respect to the functioning of DNB, AFM and financial supervision.
First some colours in the background
Traditionally, both DNB and the Authority Financial Markets (AFM) were given quite some leeway in how they organised their business and executed their constitutional supervisory roles. The consequence was that the AFM developed a policeman-style under Chairman Arthur Dokters van Leeuwen. His successor, Hans Hoogervorst, combined this approach with a political savyness and unnecessary PR-agressiveness. Hoogervorst used publicity incidents to hurt banks in their image and bashed the banks into his prescription: an academic frame-of-mind in which consumers are rational, yet deserve paternalistic protection from overcrediting and in which any form of kick-back is to be eliminated in the marketplace. I am afraid that the AFM is going to need quite some years to discover that they were wrong in assuming the consumer rationality and that they will in the end discover that the elimination of kick-backs means that financial advice for consumers has become far too expensive (and thus: out of reach) for the consumers. So through enforcement of their academic yoke, they will eventually make financial advice more costly, cumbersome and less available to the public at large. Similarly, we will find out in about 5 years -when the market has come to a complete standstill- that they have been beating to loud on the mortgages drum.
Now for DNB. While the AFM is noisily supervising the banks, DNB kept up their appearences in their old-fashioned supervisory stile in which banks are invited over for a cup of tea to discuss business. Whereas AFM was showing too much teeth, DNB showed too little. And that had an effect on the cooperation between the policing AFM and the ever-so-polite DNB. And then DNB got traumatized in 2006, by the failure of Bank van der Hoop. From that moment on, all things in DNB-life became legal. External advisors advised on each step of supervision, thus paralyzing DNB. DNB became afraid to move at all and also got stuck under the spell of Wellink. Wellink was in the Board since 1983 and had arrived at his second 7-year term. Which is impractical, as it is impossible to organise the required internal criticism and openness for such a long period. It just doesn't work as we can see from the examples of Kohl, Thatcher and Lubbers. As a consequence, the oil-tanker DNB was not able to respond promptly and properly in discussions on the ABN AMRO take-over, the failing of Icesave and the demise of DSB. Our readers should note however that it is not so helpful for the central bank to be surrounded by inconsistent and populist claptrap on complex banking issues. But that's all part of the game, so as a President you have to be able to handle that as well.
Our Ministry of Finance meanwhile lacked all vision on how to organise financial supervision. And I know this sounds harsh and crude, but it is a simple fact. Our independent Court of Auditors reported their amazement about the fact and the response of our Ministry was: our supervisory policy is embedded in the Law on Financial Supervision (WFT in Dutch). Well, the connoisseurs of that law will shrug their shoulders, smiling politely. Because the WFT is a beautiful, idealistic legal project that had the potentially to become a great legal structure for the financial sector, also through the nuanced use of open standards. In practice, however, every chapter of the WFT-law was introduced in a hurry so at present there is literally no understanding it any more. If we would consider the WFT to be a computer-application, it would be immediately classified as a spaghetti-bomb and a threat to business-continuity, requiring a comprehensive revamp and structural re-engineering.
Equally important is the fact that in the late nineties the internal organization of Finance was overturned. While the former Ministry would have a department dealing with the financial sector as such, the new departments were split up on the basis of regulatory aspects such as: stability, market conduct, generally and so on. This led to less visibility and understanding of the impact of legislative changes for the sector as such. Thus, the sector was facing a Ministry that looked like a conveyor belt pushing out partial amendments.
Change, but how?
It is clear that the above institutional and supervisory framework is not sufficiently apt to deal with large market shocks and changes. And it is not surprising that the various players in the field reflected on the best way forward. So there were reports of what had happened on DNB's supervision (report Scheltema). Politicians came up with an examination (de Wit), largely a rehashing of international reports. The banks founded a Maas Committee that emphasized in the final report the importance of good governance, stronger risk management and a more integrated assessment of societal interests. And the Ministry of Finance started thinking about a supervisory policy version 0.1 or 1.0.
What surprised me was how the discussion on the desired culture-change at DNB took place. This followed from the report Scheltema, but everyone could know that for such a change to have effect, it is necessary to embed it in a good institutional structure and to be supported and spearheaded by a good leader: the President himself. I looked with increasing astonishment at the senseless rush that was displayed by all actors in the play. Within one month an implementation plan for cultural change should be made. And while DNB met this request of parliament without complaint, it goes without saying that this will have absolutely no effect whatsoever. Because the President, spearheading the change, was going to be replaced in a years time.
While in the Netherlands we were discussing and pondering the above, our Government fell apart in February 2010, which meant that no ravishing or fundamental changes could be expected. Still, it appeared that our Ministry of Finance had decided that their links to supervisors AFM and DNB should be strengthened. So they colluded with Members of Parliament to obtain the discretion to guide and demand action from supervisors (without the realization that the WFT does not really allow them such an action). Furthermore, the Minister of Finance quickly said he was changing the appointment rules for Presidents to a maximum of one re-election. In doing so he inelegantly and unnecessarily bruised Wellink. And our Minister became more responsible for the succession planning at DNB, which requires a forward-looking approach.
The appointment process of the President and directors of the Dutch central bank (DNB)
What I noticed last year is that the tone of voice and the noise-level of publicity by the AFM appeared to decrease, already while Hoogervorst was still running the AFM. The penalties for banks were lower and the public reactions of banks with respect to the behavior of the AFM were milder. Hoogervorst was sent on (or perhaps: off) to his beloved international work. And at the same time the Ministry of Finance appointed his Treasurer, Ronald Gerritsen as the new Chairman at the AFM. Which brings the Ministry of Finance closer to the fire.
As for DNB, there is of course the weekly lunch-meeting de Jager and Wellink. I imagine that early-on they discussed how to organise the succession. And it must have been obvious that Hoogduin was the intended successor, as such a preference (of the Supervisory Board) doesn’t suddenly fall from a blue sky down. Yet, both Wellink and De Jager will have noted that Hoogduin had little track record in Bank Supervision. And my idea is that the Ministry of Finance proposed a division of responsibilities between supervisory and monetary policy, so that Hoogduin could be appointed as new president of DNB. And that part of the succession planning proceeded nicely: Parliament agreed with the idea and we moved on.
But then, in May things suddenly went wrong. The discussion on succession hit the streets, the public and parliament. This surprised me, but also allowed me a moment to share my views on my preference. But the Members of Parliament did not want Hoogduin to be the next DNB-President as he was no outsider and could thus not be the one to spearhead the culture change at DNB. And then, one of the three candidates, Kremers, also stepped out of the race. To him, the Supervisory Board of DNB was unable to outline clearly what his position would be (no doubt this was a discussion on the relationship between the President and the almost independent director of Bank Supervision at the DNB).
What struck me was that we were very much running out of time. It was May, while we needed a President as of July. And you don’t want to be choosing your next central bank President in such a time-squeeze (it seems that shows such as Idols and X-factor even use more time to pick their winner). Anyway, we went through somewhat indistinct and misty weeks, to find out that one of the other top officials of Finance, Knot (who has a DNB-ring to him as he worked their for many years) will become our next President at DNB. With former Crown-prince Hoogduin choosing to leave, because he undoubtedly envisaged his future to be different than it now had become.
The net effect of all this fiddling: there are suddenly two new directors and a new President at DNB as of July 1, 2011. And do note that Klaas Knot is not really an outsider. He originally worked for the Insurance Supervisor and had a quick career at DNB for some 10 years. He became the right-hand advisor of Wellink in his international meetings/work. And a number of years ago he was appointed as a top-civil servant at the Ministry of Finance, possibly as part of a master plan in which Wellink arranged his long-term succession (or simply just took good care of the career of his closest advisor). Now, with the butterfingered public discussion on the succession and role of Hoogduin underway, the choice for Klaas Knot was advanced in time (he might have been on the schedule to succeed Hoogduin). And my guess is that the lack of enthousiasm of Knot for internal and organisational matters may have led him to outline that he didn’t wish to take up the ‘internal affairs’ portfolio of Hoogduin as a part of his role of President.
What struck me is that perhaps Kees van Dijkhuizen and Nout Wellink may have still played important roles behind the curtains. The new director supervision of DNB is currently working for NIBC, (the same bank where van Dijkhuizen is CFO). So both Wellink and van Dijkhuizen, may have each supported their trusted candidates/protegees in view of their qualities. And those qualities certainly do not need to be questioned as the competences of both Knot and Sijbrand speak for themselves.
What I do have a concern about, is that the new management at DNB may get a structure that was focused on the old idea of Hoogduin as the new President. And there now is a separation of the domain of internal affairs and organisation (Eldersohn), Bank Supervision (Sijbrand) and general management and monetary affairs (the President). If the DNB-improvement for the future lies in a cultural change, it is clear that this requires leadership from the future President. But that President is not directly responsible; his two Directors are. And that is a rather unfortunate organizational setting. Furthermore, Knot may not be willing to tighten the knots for his old colleagues when doing the cultural/organisation change. Nevertheless, with sufficient quality, coordination and perhaps a good fresh breeze in the organisation as a result of the new Director Supervision, we should just hope for the best.
Incidentally, I should also mention that the Supervisory Board has not made any statement at all. It appears to me that the unhealthy intervention of the Ministry of Finance with respect to the succession of the President (not a minor job) does not bode well for the future. And this is the same Ministry that formally provides the Supervisory Board with very strong powers in the future. In my view, it is strange to have a Ministry doing your job as the Supervisory Board, so I am amazed that none of them respond or resign. It’s a stunning silence that we can witness, which seems to imply that the Supervisory Board Members rather stick to the status and prestige of being the DNB-Supervisory Board Member than to the content of their job: ensure proper governance at DNB.
Conclusion: butterfingered fiddling with an aftertaste of sprouts...
If we look at the importance of proper supervision and a good central bank in a country, we must realize that DNB is a central element of the most vital (financial) infrastructure in the Netherlands. And that means we must do our utmost best to maintain this infrastructure and to ensure that is and will be functioning properly. I am therefore quite surprised about:
- the lack of debate on financial supervision and resulting institutional structure (the right for a Minister to mandate specific action to the Supervisor is absolutely undesirable),
- the faulty structure imposed on DNB (the split of responsibilities between supervisory director and president, the unworkable role for the Supervisory Board)
- the stunning silence that from the Supervisory Board, now that their preferred candidate has not been chosen and decided to leave,
- the outright poor planning, timing and limited secrecy surrounding the reappointment process. The fact that the process became public domain didn’t do anyone good and was quite awkward to observe, leaving some of the people involved with a bit of a stain on their image.
We can conclude that we have now effectively already built in the core structural weaknesses that will give rise to future incidents with respect to DNB and Bank Supervision. It's all quite embarassing given that the essence of government is planning and designing ahead in order to prevent incidents and structural weaknesses, rather than to ensure them.
For now I am left with a sense of shame about how we have executed this succession planning process in the Netherlands. If my English vocabulary and Google Translate are correct I could qualify this as a major bit of butterfingered fiddling that leaves an aftertaste of our beloved Dutch sprouts. It makes me realize that the Netherlands is too small in size and population to be able to achieve the proper professional levels necessary that suit a mature democracy and financial market. That is a bit depressing, but that’s the way it is.
Of course the biggest role of the Netherlands in the financial world stems from the Golden Age. And since then we were in decline until former President Vissering lifted us up by his international stature and authority. Similarly, Duisenberg was special and President Wellink has done an incredible good job (although in the end hindered by a monoculture within his own organization). But alas, if we continue conducting ourselves the way we have been doing recently, we can be certain to slide away into a pragmatist way of doing that certainly does not justify a place at the international financial conference tables.
With only ourselves to blame for that.
Let's review this appointment process from a distance, drawing on the numerous reports and bits of work that are available with respect to the functioning of DNB, AFM and financial supervision.
First some colours in the background
Traditionally, both DNB and the Authority Financial Markets (AFM) were given quite some leeway in how they organised their business and executed their constitutional supervisory roles. The consequence was that the AFM developed a policeman-style under Chairman Arthur Dokters van Leeuwen. His successor, Hans Hoogervorst, combined this approach with a political savyness and unnecessary PR-agressiveness. Hoogervorst used publicity incidents to hurt banks in their image and bashed the banks into his prescription: an academic frame-of-mind in which consumers are rational, yet deserve paternalistic protection from overcrediting and in which any form of kick-back is to be eliminated in the marketplace. I am afraid that the AFM is going to need quite some years to discover that they were wrong in assuming the consumer rationality and that they will in the end discover that the elimination of kick-backs means that financial advice for consumers has become far too expensive (and thus: out of reach) for the consumers. So through enforcement of their academic yoke, they will eventually make financial advice more costly, cumbersome and less available to the public at large. Similarly, we will find out in about 5 years -when the market has come to a complete standstill- that they have been beating to loud on the mortgages drum.
Now for DNB. While the AFM is noisily supervising the banks, DNB kept up their appearences in their old-fashioned supervisory stile in which banks are invited over for a cup of tea to discuss business. Whereas AFM was showing too much teeth, DNB showed too little. And that had an effect on the cooperation between the policing AFM and the ever-so-polite DNB. And then DNB got traumatized in 2006, by the failure of Bank van der Hoop. From that moment on, all things in DNB-life became legal. External advisors advised on each step of supervision, thus paralyzing DNB. DNB became afraid to move at all and also got stuck under the spell of Wellink. Wellink was in the Board since 1983 and had arrived at his second 7-year term. Which is impractical, as it is impossible to organise the required internal criticism and openness for such a long period. It just doesn't work as we can see from the examples of Kohl, Thatcher and Lubbers. As a consequence, the oil-tanker DNB was not able to respond promptly and properly in discussions on the ABN AMRO take-over, the failing of Icesave and the demise of DSB. Our readers should note however that it is not so helpful for the central bank to be surrounded by inconsistent and populist claptrap on complex banking issues. But that's all part of the game, so as a President you have to be able to handle that as well.
Our Ministry of Finance meanwhile lacked all vision on how to organise financial supervision. And I know this sounds harsh and crude, but it is a simple fact. Our independent Court of Auditors reported their amazement about the fact and the response of our Ministry was: our supervisory policy is embedded in the Law on Financial Supervision (WFT in Dutch). Well, the connoisseurs of that law will shrug their shoulders, smiling politely. Because the WFT is a beautiful, idealistic legal project that had the potentially to become a great legal structure for the financial sector, also through the nuanced use of open standards. In practice, however, every chapter of the WFT-law was introduced in a hurry so at present there is literally no understanding it any more. If we would consider the WFT to be a computer-application, it would be immediately classified as a spaghetti-bomb and a threat to business-continuity, requiring a comprehensive revamp and structural re-engineering.
Equally important is the fact that in the late nineties the internal organization of Finance was overturned. While the former Ministry would have a department dealing with the financial sector as such, the new departments were split up on the basis of regulatory aspects such as: stability, market conduct, generally and so on. This led to less visibility and understanding of the impact of legislative changes for the sector as such. Thus, the sector was facing a Ministry that looked like a conveyor belt pushing out partial amendments.
Change, but how?
It is clear that the above institutional and supervisory framework is not sufficiently apt to deal with large market shocks and changes. And it is not surprising that the various players in the field reflected on the best way forward. So there were reports of what had happened on DNB's supervision (report Scheltema). Politicians came up with an examination (de Wit), largely a rehashing of international reports. The banks founded a Maas Committee that emphasized in the final report the importance of good governance, stronger risk management and a more integrated assessment of societal interests. And the Ministry of Finance started thinking about a supervisory policy version 0.1 or 1.0.
What surprised me was how the discussion on the desired culture-change at DNB took place. This followed from the report Scheltema, but everyone could know that for such a change to have effect, it is necessary to embed it in a good institutional structure and to be supported and spearheaded by a good leader: the President himself. I looked with increasing astonishment at the senseless rush that was displayed by all actors in the play. Within one month an implementation plan for cultural change should be made. And while DNB met this request of parliament without complaint, it goes without saying that this will have absolutely no effect whatsoever. Because the President, spearheading the change, was going to be replaced in a years time.
While in the Netherlands we were discussing and pondering the above, our Government fell apart in February 2010, which meant that no ravishing or fundamental changes could be expected. Still, it appeared that our Ministry of Finance had decided that their links to supervisors AFM and DNB should be strengthened. So they colluded with Members of Parliament to obtain the discretion to guide and demand action from supervisors (without the realization that the WFT does not really allow them such an action). Furthermore, the Minister of Finance quickly said he was changing the appointment rules for Presidents to a maximum of one re-election. In doing so he inelegantly and unnecessarily bruised Wellink. And our Minister became more responsible for the succession planning at DNB, which requires a forward-looking approach.
The appointment process of the President and directors of the Dutch central bank (DNB)
What I noticed last year is that the tone of voice and the noise-level of publicity by the AFM appeared to decrease, already while Hoogervorst was still running the AFM. The penalties for banks were lower and the public reactions of banks with respect to the behavior of the AFM were milder. Hoogervorst was sent on (or perhaps: off) to his beloved international work. And at the same time the Ministry of Finance appointed his Treasurer, Ronald Gerritsen as the new Chairman at the AFM. Which brings the Ministry of Finance closer to the fire.
As for DNB, there is of course the weekly lunch-meeting de Jager and Wellink. I imagine that early-on they discussed how to organise the succession. And it must have been obvious that Hoogduin was the intended successor, as such a preference (of the Supervisory Board) doesn’t suddenly fall from a blue sky down. Yet, both Wellink and De Jager will have noted that Hoogduin had little track record in Bank Supervision. And my idea is that the Ministry of Finance proposed a division of responsibilities between supervisory and monetary policy, so that Hoogduin could be appointed as new president of DNB. And that part of the succession planning proceeded nicely: Parliament agreed with the idea and we moved on.
But then, in May things suddenly went wrong. The discussion on succession hit the streets, the public and parliament. This surprised me, but also allowed me a moment to share my views on my preference. But the Members of Parliament did not want Hoogduin to be the next DNB-President as he was no outsider and could thus not be the one to spearhead the culture change at DNB. And then, one of the three candidates, Kremers, also stepped out of the race. To him, the Supervisory Board of DNB was unable to outline clearly what his position would be (no doubt this was a discussion on the relationship between the President and the almost independent director of Bank Supervision at the DNB).
What struck me was that we were very much running out of time. It was May, while we needed a President as of July. And you don’t want to be choosing your next central bank President in such a time-squeeze (it seems that shows such as Idols and X-factor even use more time to pick their winner). Anyway, we went through somewhat indistinct and misty weeks, to find out that one of the other top officials of Finance, Knot (who has a DNB-ring to him as he worked their for many years) will become our next President at DNB. With former Crown-prince Hoogduin choosing to leave, because he undoubtedly envisaged his future to be different than it now had become.
The net effect of all this fiddling: there are suddenly two new directors and a new President at DNB as of July 1, 2011. And do note that Klaas Knot is not really an outsider. He originally worked for the Insurance Supervisor and had a quick career at DNB for some 10 years. He became the right-hand advisor of Wellink in his international meetings/work. And a number of years ago he was appointed as a top-civil servant at the Ministry of Finance, possibly as part of a master plan in which Wellink arranged his long-term succession (or simply just took good care of the career of his closest advisor). Now, with the butterfingered public discussion on the succession and role of Hoogduin underway, the choice for Klaas Knot was advanced in time (he might have been on the schedule to succeed Hoogduin). And my guess is that the lack of enthousiasm of Knot for internal and organisational matters may have led him to outline that he didn’t wish to take up the ‘internal affairs’ portfolio of Hoogduin as a part of his role of President.
What struck me is that perhaps Kees van Dijkhuizen and Nout Wellink may have still played important roles behind the curtains. The new director supervision of DNB is currently working for NIBC, (the same bank where van Dijkhuizen is CFO). So both Wellink and van Dijkhuizen, may have each supported their trusted candidates/protegees in view of their qualities. And those qualities certainly do not need to be questioned as the competences of both Knot and Sijbrand speak for themselves.
What I do have a concern about, is that the new management at DNB may get a structure that was focused on the old idea of Hoogduin as the new President. And there now is a separation of the domain of internal affairs and organisation (Eldersohn), Bank Supervision (Sijbrand) and general management and monetary affairs (the President). If the DNB-improvement for the future lies in a cultural change, it is clear that this requires leadership from the future President. But that President is not directly responsible; his two Directors are. And that is a rather unfortunate organizational setting. Furthermore, Knot may not be willing to tighten the knots for his old colleagues when doing the cultural/organisation change. Nevertheless, with sufficient quality, coordination and perhaps a good fresh breeze in the organisation as a result of the new Director Supervision, we should just hope for the best.
Incidentally, I should also mention that the Supervisory Board has not made any statement at all. It appears to me that the unhealthy intervention of the Ministry of Finance with respect to the succession of the President (not a minor job) does not bode well for the future. And this is the same Ministry that formally provides the Supervisory Board with very strong powers in the future. In my view, it is strange to have a Ministry doing your job as the Supervisory Board, so I am amazed that none of them respond or resign. It’s a stunning silence that we can witness, which seems to imply that the Supervisory Board Members rather stick to the status and prestige of being the DNB-Supervisory Board Member than to the content of their job: ensure proper governance at DNB.
Conclusion: butterfingered fiddling with an aftertaste of sprouts...
If we look at the importance of proper supervision and a good central bank in a country, we must realize that DNB is a central element of the most vital (financial) infrastructure in the Netherlands. And that means we must do our utmost best to maintain this infrastructure and to ensure that is and will be functioning properly. I am therefore quite surprised about:
- the lack of debate on financial supervision and resulting institutional structure (the right for a Minister to mandate specific action to the Supervisor is absolutely undesirable),
- the faulty structure imposed on DNB (the split of responsibilities between supervisory director and president, the unworkable role for the Supervisory Board)
- the stunning silence that from the Supervisory Board, now that their preferred candidate has not been chosen and decided to leave,
- the outright poor planning, timing and limited secrecy surrounding the reappointment process. The fact that the process became public domain didn’t do anyone good and was quite awkward to observe, leaving some of the people involved with a bit of a stain on their image.
We can conclude that we have now effectively already built in the core structural weaknesses that will give rise to future incidents with respect to DNB and Bank Supervision. It's all quite embarassing given that the essence of government is planning and designing ahead in order to prevent incidents and structural weaknesses, rather than to ensure them.
For now I am left with a sense of shame about how we have executed this succession planning process in the Netherlands. If my English vocabulary and Google Translate are correct I could qualify this as a major bit of butterfingered fiddling that leaves an aftertaste of our beloved Dutch sprouts. It makes me realize that the Netherlands is too small in size and population to be able to achieve the proper professional levels necessary that suit a mature democracy and financial market. That is a bit depressing, but that’s the way it is.
Of course the biggest role of the Netherlands in the financial world stems from the Golden Age. And since then we were in decline until former President Vissering lifted us up by his international stature and authority. Similarly, Duisenberg was special and President Wellink has done an incredible good job (although in the end hindered by a monoculture within his own organization). But alas, if we continue conducting ourselves the way we have been doing recently, we can be certain to slide away into a pragmatist way of doing that certainly does not justify a place at the international financial conference tables.
With only ourselves to blame for that.
23/05/2011
Dutch coalition has to lean on PVV and SGP for support of government...
Today was the day that the Dutch Members of the Provinces voted for the Members of the First (Upper) Chamber of Parliament. Traditionally this is called the 'reflection' Chamber, because it is not so much a political arena as the Second Chamber. It's role is, traditionally, to ensure quality of rules, rule-making and check the fundamentals of law. Only on occasion do the discussions in the First Chamber lead to parliamentary crises.
Well, as you can read here, it turned out that the current minority-coalition of VVD and CDA has failed to win an outright majority of seats in the upper house of parliament, or senate, according to the latest prognosis from Nos television. Even when combined with the PVV, the result is a mere 37 seats, which means that the coalition alliance (VVD, CDA and PVV) is still one seat short as the Chamber has 75-seat Members.The SGP has publicly stated however, that it will tend to support the coalition. And their support was of course much helped by the withdrawal of support (by VVD) for legislation which lifts the ban on blasphemy.
As a result, Prime Minister Mark Rutte is now facing the most serious balancing act since a long time. Rutte needs the support of PVV in the Second Chamber (Lower House) and needs the PVV for that. Meaning he has to side with a party with strong anti-islam sentiments, that wishes Greece to step out of the euro and so on. And in the First Chamber (Upper House) he sides with the SGP, that has the political position that women should not be active in politics (and should focus on their maternal tasks primarily). And this is quite a combination... leading us in the Netherlands into ad-hocracy territory, due to the minority character of our governing coalition. And we haven't had situations before in which each government issue/thema had to be battled for independently in the Chambers. So we're up for some Realpolitik here in the Netherlands.
We should note however that this outcome is essentially doing proper justice to the outcome of the elections for the Upper and Lower House here. The Dutch were strongly divided, which resulted in a situation where it was no longer clear how to form a majority-coalition. So the voters have condemned the politicians to cooperation, despite their strong differences of opinion (and sometimes unagreeable manners or political views on other subjects). And it remains to be seen if this will be accompanied with proper conduct in the Houses of Parliament or whether we will see more name-calling and pub-talk. So the end result is that the voters have gotten what they represented: a divided caretaker government that will steer on a day-to-day basis, and will be unable to steer on long-term policy goals or to achieve fundamental changes.
I am curious to see if our Prime Minister, Mark Rutte, will succeed in his balancing act. Time will tell.
Well, as you can read here, it turned out that the current minority-coalition of VVD and CDA has failed to win an outright majority of seats in the upper house of parliament, or senate, according to the latest prognosis from Nos television. Even when combined with the PVV, the result is a mere 37 seats, which means that the coalition alliance (VVD, CDA and PVV) is still one seat short as the Chamber has 75-seat Members.The SGP has publicly stated however, that it will tend to support the coalition. And their support was of course much helped by the withdrawal of support (by VVD) for legislation which lifts the ban on blasphemy.
As a result, Prime Minister Mark Rutte is now facing the most serious balancing act since a long time. Rutte needs the support of PVV in the Second Chamber (Lower House) and needs the PVV for that. Meaning he has to side with a party with strong anti-islam sentiments, that wishes Greece to step out of the euro and so on. And in the First Chamber (Upper House) he sides with the SGP, that has the political position that women should not be active in politics (and should focus on their maternal tasks primarily). And this is quite a combination... leading us in the Netherlands into ad-hocracy territory, due to the minority character of our governing coalition. And we haven't had situations before in which each government issue/thema had to be battled for independently in the Chambers. So we're up for some Realpolitik here in the Netherlands.
We should note however that this outcome is essentially doing proper justice to the outcome of the elections for the Upper and Lower House here. The Dutch were strongly divided, which resulted in a situation where it was no longer clear how to form a majority-coalition. So the voters have condemned the politicians to cooperation, despite their strong differences of opinion (and sometimes unagreeable manners or political views on other subjects). And it remains to be seen if this will be accompanied with proper conduct in the Houses of Parliament or whether we will see more name-calling and pub-talk. So the end result is that the voters have gotten what they represented: a divided caretaker government that will steer on a day-to-day basis, and will be unable to steer on long-term policy goals or to achieve fundamental changes.
I am curious to see if our Prime Minister, Mark Rutte, will succeed in his balancing act. Time will tell.
11/05/2011
Saga continues: PVV-party hangs flag of NSB (old national socialist party) in Parliament rooms... then deny...
Last weeks, the Dutch remembered the 4th of May, the day of liberation from the German oppressor in 1945. With that, there were quite a number of analysis around outlining and comparing the current populist movement (and freedom party) of Wilders with movements in earlier time. This very much annoyed Wilders and his party-members who wanted all those comparisons banned from tv, paper, website and so on (thus outlining that their freedom of thought/speech is only meant for themselves).
Today, Spitsnieuws shows this foto, in which two Dutch flags (with orange banner instead of red) are seen hanging in the PVV-rooms in Dutch Parliament.
Our foreign readers should note that this flag has been forbidden in the 1930s somewhere, because the national socialist party NSB (Hitler-fans in the Netherlands) started using it as a party symbol as the flag essentially refers to a period in time when the Netherlands kicked the Spanish out (Historic News outlines that it also came in use in South Africa during the apartheids-regime). Questioned about this today over the radio, the PVV denies that this all happened.
At present the PVV is firmly denying that the flags even hung out there. While another inside source is ready to outline that the flags were hung out there, but it was never intended to refer to the NSB or second world war period. The idea was to refer with pride to the earlier days of the Netherlands, when we were a more important country then now. But, those who hung the flags might have been unaware of the more recent connotation and reference to the NSB.
Well, there you have it, this is Dutch politics and PVV in optima forma. Let's look at the two possible explanations here and let's note that the the group feeling in the group PVV-MP is tight (and may even come close to groupthink):
1- As Geert Wilders is currently very much annoyed and angry about the comparisons with the pre-worldwarII time, so will his followers. Confronted with the comparisons with Worldwar II, I imagine they feel wronged by the comparisons and out of anger felt: 'Well, if they compare us with the 1930s populist movements, we might as well behave as such'. In this possible explanation we need to appreciate that this behaviour equals that of a wronged school boy. And one could imagine a school boy who is punished for doing something wrong, receives punishment. Then, given that he has already got the blame and the punishment, the boy continues to milk out his punishment by continuing the obstinate behaviour that he was punished for.
2- The group PVV MP's feels misunderstood. They are battling for a clean, beautiful Netherlands, with freedom for all but all of Dutch press and society appear now to be against them and don't share their goals. But luckily some spirits within the PVV-fraction in Parliament still know what they are fighting for. They want the Netherlands to once again become the country that it was: a country that with pride and confidence stood up for itself against a foreign oppressor (in this case not Spain but Islam). So to improve the group morale in these harsh times (when the party's goal: freedom of speach is in fact counteracted by the PVV itself and gets a lot of criticism) some MPs chose a symbol that might unify them and remember them of their worthy goal: the old Dutch flag from the 16th century. In doing so, they lacked the historical awareness and education to remember the other connotation of the flag: the NSB.
By the way, the reasoning above may also hold true for the party emblem that the PVV uses (thanks to @Tibeart and historisch nieuwsblad). This is their stylized gull and the text: Party for Freedom:
Now, let's have a look at one from the NSB (with the text in white: Does thou desired Freedom or Servitude.. and in black: Freedom, only through the NSB):
So, whichever of the two explanations best fit the real situation of this moment, both are equally surprising and amazing.
PS (12.05). While Wilders himself now remains invisible with no comment, his 'thought leader' Hero (yes, that seriously is his first name) Brinkman twitters that he is glad that the flags are now gone (and were meant to refer to the Dutch golden age)... meaning that explanation 2 might have been most accurate.
Today, Spitsnieuws shows this foto, in which two Dutch flags (with orange banner instead of red) are seen hanging in the PVV-rooms in Dutch Parliament.
 |
| Orange-White-Blue flag seen hanging in PVV-room in Dutch parliament |
Our foreign readers should note that this flag has been forbidden in the 1930s somewhere, because the national socialist party NSB (Hitler-fans in the Netherlands) started using it as a party symbol as the flag essentially refers to a period in time when the Netherlands kicked the Spanish out (Historic News outlines that it also came in use in South Africa during the apartheids-regime). Questioned about this today over the radio, the PVV denies that this all happened.At present the PVV is firmly denying that the flags even hung out there. While another inside source is ready to outline that the flags were hung out there, but it was never intended to refer to the NSB or second world war period. The idea was to refer with pride to the earlier days of the Netherlands, when we were a more important country then now. But, those who hung the flags might have been unaware of the more recent connotation and reference to the NSB.
Well, there you have it, this is Dutch politics and PVV in optima forma. Let's look at the two possible explanations here and let's note that the the group feeling in the group PVV-MP is tight (and may even come close to groupthink):
1- As Geert Wilders is currently very much annoyed and angry about the comparisons with the pre-worldwarII time, so will his followers. Confronted with the comparisons with Worldwar II, I imagine they feel wronged by the comparisons and out of anger felt: 'Well, if they compare us with the 1930s populist movements, we might as well behave as such'. In this possible explanation we need to appreciate that this behaviour equals that of a wronged school boy. And one could imagine a school boy who is punished for doing something wrong, receives punishment. Then, given that he has already got the blame and the punishment, the boy continues to milk out his punishment by continuing the obstinate behaviour that he was punished for.
2- The group PVV MP's feels misunderstood. They are battling for a clean, beautiful Netherlands, with freedom for all but all of Dutch press and society appear now to be against them and don't share their goals. But luckily some spirits within the PVV-fraction in Parliament still know what they are fighting for. They want the Netherlands to once again become the country that it was: a country that with pride and confidence stood up for itself against a foreign oppressor (in this case not Spain but Islam). So to improve the group morale in these harsh times (when the party's goal: freedom of speach is in fact counteracted by the PVV itself and gets a lot of criticism) some MPs chose a symbol that might unify them and remember them of their worthy goal: the old Dutch flag from the 16th century. In doing so, they lacked the historical awareness and education to remember the other connotation of the flag: the NSB.
By the way, the reasoning above may also hold true for the party emblem that the PVV uses (thanks to @Tibeart and historisch nieuwsblad). This is their stylized gull and the text: Party for Freedom:
Now, let's have a look at one from the NSB (with the text in white: Does thou desired Freedom or Servitude.. and in black: Freedom, only through the NSB):
So, whichever of the two explanations best fit the real situation of this moment, both are equally surprising and amazing.
PS (12.05). While Wilders himself now remains invisible with no comment, his 'thought leader' Hero (yes, that seriously is his first name) Brinkman twitters that he is glad that the flags are now gone (and were meant to refer to the Dutch golden age)... meaning that explanation 2 might have been most accurate.
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